Monday, March 9, 2009

Keynote Address at the Closing of the National Consultation Workshop on “Concepts of the Draft Law on Administration of Province, Municipality, Distri

Sihanoukville, 06th December 2007

Your Excellency Sar Kheng, Deputy Prime Minister, Minister of Interior and Chairman of National Committee on Decentralization and Deconcentration;

Your Excellencies, Ladies and Gentlemen, Members of the Royal Government!

Your Excellencies Ambassadors to the Kingdom of Cambodia, Representatives from Development Communities!

Your Excellencies Governors and Deputy Governors!

Dear Participants!

Today, it is my great pleasure and honor to join the closing of this historically important National Consultation Workshop on “Concepts of the Draft Law on Administration of Province, Municipality, District and Khan”

During these past three days, I have tried to manage my time to follow with attention on the outcomes of the discussion through communication with H.E. Sar Kheng to make additional base in sharing my view today with Your Excellencies, Ladies and Gentlemen all those concerned on the general vision of the democratic development at the sub-national level in the context of Cambodia real condition.

Indeed, this vision has been clearly identified within the framework of the Decentralization and Deconcentration Strategy adopted by the Council of Ministers in May 2005 and it is an important base for preparing and formulating draft organic law, which is tabled for discussion at this workshop.

Identifying the vision of Decentralization and Deconcentration Reform is to respond to society development consistent with the general global trend at the present and in the future decades that characterized by two important aspects, which are globalization and localization.

Globalization has been impacting us all as the nation, government, institution and people. At the same time, each country strives to enhance their localization in order to cope with the affects of the globalization and trying to adhere to the development strategy in order to pace themselves with the speed of globalization. Within this broad context, we consider the development management issue and complex society requirements as “governance”. Thus, in this sense governance is an important platform of communication between globalization and localization.

In particular in Cambodia, we can see that unrest and decades of civil conflicts have severely destroyed and demolished socio-economic infrastructure, including administrative system. We have made our efforts to rehabilitate social infrastructure since the 80’s until present time; our efforts have brought us peace, political stability, national unification and infrastructure development for rehabilitation and development of the nation in all sectors.

Thus, rehabilitation and development of our nation needs to be base on core value and principle to ensure political stability, national unification and political development. All those core value and principle are imbedded in our constitution, which are democracy and development or in other words “democratic development”. Democratic development is not only to be implemented at national, but also to be undertaken at sub-national levels. The process of democratic development requires clear and conscious investment in creating social and political capital. This is the ultimate objective that Cambodia needs to achieve in order to ensure favorable environment for political stability and socio-economic development which are the firm bridge to develop the future of our nation.

At the same time, the Royal Government considers the process of Decentralization and Deconcentration Reform as an effective mean in bringing public services closer to the people, leading to three following benefits:

Firstly, people have the opportunity to actively involve in decision making process at local level; this will strengthen and broaden public participation in national development.

Secondly, the requirements and priorities of people at the grass root level have been fully considered; this improves the decision making process, including effective use of various resources.

Thirdly, increasing the ability to mobilize local resources to provide services and push development, based on participatory will of the people and civil society, as well as to mobilize private resources together with local authorities’ resources to invest in local development and poverty reduction.

In this spirit, decentralization and deconcentration are the way to achieve development goals, especially at local level. Decentralization and deconcentration are involved with political decision to address challenges in governance and to provide the most efficient services.

Decentralization deals with transfer of money and responsibilities, which is linked to the transfer of necessary personnel, assets and financial resources to sub-national level administrations through appropriate measures. Decentralization and localization have a lot in common, but decentralization does not mean disconnecting local level governance from the central one. In the Cambodian context, decentralization should be structured to promote effective cooperation and interdependency between all levels of governance.

Deconcentration mainly deals with the delegation of duties and power as well as appropriate capacity resources to low level institutions such as local authorities and agencies of ministries to execute their duties and power under the responsibility of delegating ministries/institutions.

Hence, decentralization and deconcentration have inseparable connection that reflect effective cooperation and joint effort of national and sub-national levels in order to achieve democratic development.

Above-mentioned concept has not been taken into consideration just during this time. This consideration has been transformed into an important vision in the Triangle Strategy and political platform of the government since the Second Legislature of the National Assembly. At that time, under the reform program, commune election of the first mandate was held in all 1621 communes including recently-integrated communes. The election has produced first-ever locally democratic governance institution in Cambodia along with the implementation of decentralization and deconcentration reforms.

This concept has been extended and deepened through political programs and the Rectangular Strategy of the government of the Third Legislature of the National Assembly, which has a good governance as the core. Obviously, the Rectangular Strategy has promoted and encouraged the continuity of implementation of the decentralization and deconcentration reforms in all communes/ sangkats to produce more outcomes. The outcome of this reform has inspired the RGC to release decentralization and deconcentration strategic framework, ratified by the Council of Ministers in June 2005; it identifies long-term vision for democratic development at sub-national level. This strategic framework requires drafting of organic law for sub-national administrations to establish governance structure and system aiming at ensuring democratic development at all sub-national levels.

Experiences from those stages demonstrate that this draft law has gone through rigorous and careful examinations, with a lot time spent on it, in order to avoid the wrong start which might triggers any complexity to the accomplishment of long-term vision of democratic development at sub-national level in the future.

The concept of democratic development through decentralization and deconcentration, has been reflected in the Draft Law on Administration of Province, Municipality, District/Khan, prepared by the National Committee for Decentralization and Deconcentration reform of the Ministry of Interior, and put for discussion at this national workshop; this is to get all concerned stakeholders to comprehend in order to have a foundation to examine and provide recommendations.

Due to the requirement of this reform, for the present and the future, I have agreed on the requested amendment to the article 145 of the Constitution of Royal Government of Cambodia which also affects the article 146. This amendment is not intended to reallocate land all over, but rather to further clarify the allocation of land at the present in order to facilitate the design of governance structure and system at the sub-national level with effectiveness, responsiveness, accountability and flexibility in accordance with current and future development.

I notice that the Draft Law proposes new structure and system for province, municipality, district and khans, however this proposal is not an entirely new model. These new proposals are base on positive experiences from what the government has gained since the first commune election in 2002.

The arrangement of sub-national governance system and structure that is proposed in this draft is to ensure extensive and sustainable development. These proposals aim at strengthening local economic foundations, based on the assurance that all citizens have equal opportunity to prepare and implement local development plans, as well as to create effective atmosphere for natural resource management and provision of quality public services in response to people’s needs in poverty reduction while focusing on the poor, vulnerable, ethic and minority people, especially women and children.

To attain this vision, it requires us to establish council at all administrative levels to promote and support democratic development in respected regions. Each council must have structure, system, duties, resources and capacity to address directly any challenges of local development. The real condition of Cambodia calls for in setting up a council for provinces, municipality, districts/khans through non-general election. At the same time, it requires to establish governance committees, comprising of governors and deputy governors that are nominated by the government to carry out decision of the councils. Although this system maintains the nomination of governors and deputy governors, but it requires change in accountability and work relations between governors, deputy governors, councils and national level administration. The main change is that governors and deputy governors must have primary accountability to their own councils. Then, both councils and governors must be accountable to the government. This arrangement is to strengthen principle of separation of power between the Legislative, Executive and the Judicial bodies. Generally, the sub-national councils must be under the responsibility and control of national executive power, meaning under the responsibility of the government.

At the same time, these reforms also require the establishment of city councils in all provinces, specifically in provincial centers and urban areas, which have been growing for the last several years as a result of economic growth. This arrangement is to guarantee that those urban areas will prosper and serve as a focal point for the development of surrounding areas.

Indeed, district-level administrations are the most important and appropriate agencies for local development and poverty reduction. However, their role has been ignored in the implementation of the past reforms. Therefore, the draft law requires structural arrangements and governance system at the district level to enable district authorities to support and cooperate with the commune authorities to provide services, involve in development and effectively reduce poverty.

In rearranging this sub-national structure and system, the most complicated issue is the reexamination process to allocate duties and responsibilities, financial and human resources. These complications have prolonged the presentation of the draft law for nearly a decade. However, social development and daily needs of the people are constantly evolving, especially in a view of high economic growth. This situation requires urgent and effective responses to people’s diverse needs. Addressing this issue pushes me to speed up the drafting of the law on organizational arrangement, and put it on the agenda for discussion during the last three days in this workshop. It requires the government’s clear determination in the reexamining the duty and responsibility re-designation, and financial and human resource allocation. Each ministry and institution must accomplish this task and with high responsibility to the people receiving these services. The management of all ministries and institutions must remember that to develop and provide services to a prosperous society, we should not undertake all tasks in responding to the people’s needs in all areas. Clearly, needs are differ from areas to areas. Hence, addressing local needs require flexible solution in respected regions to encourage local contribution and ownership to ensure sustainable development. Due to this requirement, ministries and institutions must transfer duties and responsibilities of local service provision and development to grass root authorities. According to our experiences in the administration, local authorities who are close to the local population, they know better and can coordinate and respond better to local needs. At the same time, when the management of various tasks is close to those who needed or those who undertake the task, transparency and accountability will be enhanced.

Therefore, the progress of decentralization and deconcentration reforms mainly relies on the will of the management of each ministry and institution as almost all duties and responsibilities lie within their hands. Moreover, the transfer of duties and responsibilities must be conducted alongside with the transfer of resources, capacity building, and policy support to ensure that local authorities fulfill assigned tasks and respond to local needs effectively. Indeed, on this basis, each council requires to have adequate budget and inflow resource as well as assets that will be rearranged in the municipality, provinces and districts. Khans and Sangkats must also have their own budget within the framework of the municipal budget, and all provincial communes must also have their own budget within the framework of provincial budget. Regarding the transfer of resources, we have gained vast experiences through preparation of municipal/provincial and commune budgets within the public financial and national budget management framework.

The most significant point that should be note here is tat the decentralization and deconcentration reform which is under discussion is carried out at the time when the government is fruitfully implementing public finance management reform, aiming at ensuring a comprehensive, efficient, effective, complementary, and sovereign public finance management. This means that the national public finance management system must be the “single system” that is comprehensive, and free of political, legal and institutional interferences. This principle must be firmly respected to allow the government to possess financial instruments in its hands to implement its policies in all sectors with transparent, accountable, effective and efficient manner.

Presently, in order to implement the second-stage public finance management reform, the ministry of economy and finance is preparing its second large-scale amendment on the Law on Financial System, aiming at determining clear roles, responsibilities, and accountable mechanism of all ministries, institutions and organizations involving in budget control to match the policy priorities with the national budget in the third stage, and to ensure accountability of the implementation results in the fourth stage of the public finance management reform. Thus, this requires appropriate coordination between the Law on Financial System and other public finance-related laws, and a clear hierarchical division between this law and other related laws in order to ensure the sovereignty of the national public finance management system.

In this sense, due to the fact that this amendment on the Law on Financial System is a comprehensive and large-scale amendment and is carried out in parallel with the Law on Administration of Province, Municipality and District/Khan which is closely related to the sub-national financial management regime, I would like to request the Ministry of Economy and Finance to closely work with the National Committee to ensure that the principles of financial and state asset management regime in municipalities, provinces and districts/khans determined in the Law on Administration of Province, Municipality and District/Khan will be fully complementary within the framework of the public finance management system in accordance with all outlined principles that will be stated in the Amendment on the Law on Financial System.

Clearly, making the Law on Financial System into an organic law is appropriate as this law sets “the system or structure of public financial management for the entire nation” and it will affect and bind all other public finance-related legislations, including the annual Law on Financial Management and the Sub-National Financial Management Regime under a single framework which is comprehensive, transparent, accountable, complementary, and sovereign either in terms of political, legal and institutional aspects.

To ensure that the amendment on the Law on Financial System is fully complementary with the Law on Administration of Province, Municipality, District/Khan and becomes an important tool for decentralization and deconcentration reform, I have instructed the Ministry of Economy and Finance to speed up the draft Law on Financial System and make it as the “Organic Law” to get legislative bodies’ approval alongside the Draft Law on Administration of Province, Municipality, District/Khan before the end of the third legislature of the National Assembly. In this context, I would also like to request related ministries or institutions to examine any requirement to amend the Constitution to make the “Law on Financial System” into the “Organic Law”. If necessary, we can do this work in a package under the framework of Constitutional Amendment that I had just mentioned.

We recognize that deconcentration and decentralization reform has initiated a new concept on organizing structure, system, resources and staff. This will also affect responsibilities, roles, resources and staff at the central level. The new proposal is currently influencing knowledge and mind set of stakeholders. Thus, some stakeholders have concentrated too much on the current administrative arrangement rather than looking in the future perspective during the discussion in this workshop. By logic, reform is to bring positive progress and improvement in the future. In this sense, reform requires us to change attitude and mind set by rationally and positively looking to the future.

As I aforementioned, even though this is a new proposal, this has been and should be initiated in Cambodia’s context. In general, according to our experiences from the world, each country prepared its own strategy and programs for deploying deconcentration and decentralization structure of local administration system. Each country can learn from each other, but could not duplicate the model. For Cambodia, we cannot adopt entire approach from any country, because from the start to end, our nation is different from others. Moreover, at this point we have to be more careful than any other time to consider the uniqueness and distinguish characteristics of each country’s economic development.

As I aforesaid, we spent a decade to address challenges and obtain many positive achievements in deconcentration and decentralization reform. Through strategic framework on deconcentration and decentralization reform, the Royal Government has committed on the medium to long-term perspective to bring about democratic governance for strengthening the whole sub-national administration.

Next, according to this organic law, we will prepare strategic vision and national policy for democratic development in form of roadmap and annual program by focusing on the following activities:

1. Organizing a structure and unified administrative system for municipality, province, district and Khan as well as council election at those administrations in order to coordinate and promote democratic development.

2. Set clear roles and responsibilities of governance at all levels including the roles and functions of council and horizontal line ministries.

3. Set a clear link between responsibilities and resources by ensuring political stability, macroeconomic stability and integrity and consistency of public finance management in order to maintain a sustainable economic growth.

4. Improve coordination and partnership building among ministries/institutions and between the Royal Government and development partners, civil societies and private sectors.

5. Support financially and build capacity as well as learn from practical experiences, under the concept of doing along with learning, to ensure the reform will smoothly advance.

In fact, base on the above principal, this reform need time and political commitment and continues coordination. Certainly, this vision and reform program will maintain to be an important political agenda of the government in the fourth legislative of National Assembly.

Up to now, we have eight months remaining to the fourth election to enhance free democracy, political stability and promote socio-economic development. Even though, political deadlock after the national election in 2003 took about a year out of the term of the current National Assembly, we are prideful because the Royal Government has achieved almost all of promises in its political agenda such as strengthening political stability, social stability, and high and sustainable economic growth for the last several years. I hope that the outcomes of the three-day workshop will derive a consensus on the main principals for continuing the local administration reform in order to strengthen and expand democratic development. I consider this workshop as an another achievement complimenting to our promises as stated in political agenda and Rectangular Strategy of the Royal Government of the third legislative of National Assembly.

Taking this opportunity, I would like to compliment and highly appreciate the valuable contribution from your Excellencies, Ladies and Gentlemen in the government, development partners and civil societies that support the process of deconcentration and decentralization reform. I would like to deeply thank National Committee for Deconcentration and Decentralization Reform, led by H.E. Sar Kheng, Deputy Prime Minister, for drafting the organic law for consultation among the stakeholders and also thank for the supports of development partners.

After this workshop, I would like the National Committee for Deconcentration and Decentralization Reform to revise the draft organic law as soon as possible and sent to the Council of Ministers and National Assembly in early 2008.

Finally, on behalf of the Royal Government and myself, I would like to close the National Workshop and wish your Excellencies, Ladies and Gentlemen the five gems of Buddhist blessing.


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