Excellencies, Lork Chumtiev, Members of the RGC
Excellencies, Lork Chum Tiev, Ladies and Gentlemen, National and International Guests!
Today, it is my great honor and pleasure to be with Excellencies, Lork Chum Tiev, Ladies and gentlemen, national and international guests, at this important Annual Review Meeting of the Public Financial Management Reform Program (PFMRP). Let me joint HE. Minister Aun Porn Moniroth to warmly welcome Excellencies, Lork Chum Tiev, Ladies and Gentlemen for participation in today meeting.
As expressed by HE. Aun Porn Moniroth, the achievements in the last ten years of PFMRP was encouraging, but in my view, it was really an achievements to be proud of. As I did admitted, being the Prime Minister, nothing has made me happier than not only has the ability to repay all arrears, completely transformed the severed chronic cash shortage to a timely payment of the budget execution, but also moving into a cash surplus situation. This has not only made our budget implementation becomes more credible and be able to increase spending on some priority sectors, namely education, health, and infrastructure, but also allows us to tackle problems continuously happened during 2009-2011 including external crisis and natural disaster and also gradually increase salary for civil and military servants to a reasonable and equitable manner. I highly value and thanks to HE Deputy Prime Minister Keat Chhon, Chairman of the Committee for Economic and Financial Policy, and HE Aun Porn Moniroth, Minister of Economy and Finance and Chairman of the PFM Steering Committee, as well as Excellencies and Lork Chum Tiev, head of ministries and institutions, who have been working together very hard and in a responsible and cooperative manner, so that we were able to achieve this remarkable/ proud results. I also like to give my highly evaluation and appreciation to our Development Partners, both bilateral and multilateral, for their contributions in terms of financing and technical assistance to all government reform programs, especially this PFMRP by using existing government system and mechanism to increase the effectiveness and efficiency of our cooperation and towards contributing to poverty reduction and the development of Cambodia.
Budget is a policy tool. Meaning that having good policy without budget to implement no result will be achieved, on the other hand if we do have budget but no good policy then the budget will be wastefully used. In this regard, I like to express that, although at the macro level, we do have good policy, strategy and activity plan which reflected in the Rectangular Strategy and National Strategic Development Plan (NSDP), we should admitted that at the sectoral and ministerial level, further improvement and strengthening of their policies, strategies and activity plans needed to be made to not only ensure consistency and supportive to the overall government policy, strategy and activity plan, but also to ensure appropriateness and be able to measure the results accurately. Therefore, improving the quality and effectiveness of implementing budget strategy plan in all ministries and institutions is important, essential and urgent in the process of moving towards the implementation of stage 3 of the PFMRP which is a gradual process to transform from input based and centralized to result/performance based and decentralized budget/public financial management system. To assure that national budget is truly become a policy tool, I hereby, wish to reiterate a strong commitment of the RGC to continue implementing PFMRP through platform approach to gradually transform our budget/public financial management system from input base and centralized to a result/performance based and decentralized which consistent with the international best practice and standard by 2025.
It is true that during the past 2 decades, we not only can maintain political and macro-economic stability, but also made remarkable progress in all sectors including political, economic and social sectors. From one terms to another, political situation in Cambodia became more and more mature and provided better environment for democracy, sustainable economic growth and has contributed to a reduction in half of poverty population, from more than 40% to less than 20%. This shown that in addition to rescue the country from the genocidal regime, Cambodia has also made a courageous and responsible effort, on the right track, through various rehabilitation and development activities. All these enormous achievement and success will not be possible without the improvement of the public financial management which plays a key role not only to mobilize, allocate and assure effective and efficient use of budget, but also as key tool for economic development and for national public policy in all sectors.
Though we were able to maintain macro-economic and financial stability, but that was only due to our appropriate policy and regular monitoring, and we have to admit that we still yet having an appropriate system to effectively and efficiently manage our public finance and our economy. Furthermore, our institutional structure and capacity, mechanism, and legal framework are still weak which make our ability to manage is somewhat difficult, fragile, not sustain and resilient, and low effectiveness and efficiency. Therefore, the government has set its ambitious goal to establish an effective and efficient management system at national and sub-national level through implementation of systemic reform in some key sectors including the three key systematic reforms such as Public Financial Management Reform, Sub-national Management Reform and Public Administration Reform and working toward establishing the best international practice and standard which is a result/performance based and decentralized management system.
While implementing these systematic reforms we, eventually, will face many difficulties, challenges and complexity which require our great sacrifices, but the outcome will be out weight our efforts. “No results will come without expenses, and no reform will be successful without sacrifice”. In other words, “We reform, we survive, if we don’t we die”. There is no doubt that rapid economic, social and technology evolution of today globalization and integration have not only been encouraging individuals, institutions both public and private sector, national, regional and international level to reform or perform better and improve regularly, but also to think, analyze and make decision in a more holistic way to ensure competitiveness and sustainable development.
In summary, international experiences and especially our own past Cambodian positive experiences shows that “effective and efficient public financial management is an essential element for the development of the country and poverty reduction” and the government for this 5th terms will continue to implement its Public Financial Management Reform” as its first rank in the reform list.
In this connection, and to successfully complete stage 2 and start stage 3 of this important reform, I wish to some guidance and recommendations as follows:
First, leading and supporting roles to line ministries and institutions still be an essential task and need to be continued. Therefore, I would request the Committee for Economic and Financial Policy, Steering Committee of the PFMRP and the Ministry of Economy and Finance should continue to play these roles effectively and efficiently.
Second, more involvement and successful factors have been gradually transferring from Ministry of Economy and Finance- the developer of the system, to line ministries and institutions-the users of the system. Therefore, all line ministries and institutions should participate in a more active and responsible way showing more ownership and accountability in preparing and implementing effective and efficient reform activity plan, and continue to implement this reform as their daily task in a sustainable way.
Third, ensure consistency and complementary among the three systemic reforms. Strengthen coherence between all relevant reforms, especially Public Financial Management Reform, Sub-national Management Reform, and Public Administration Reform, in order to assure the coherence and consistency.
Fourth, creating a sense of necessary and urgent of reform is a must for all leaders and officers at all level. Leaders and officers at all level in all line ministries and institutions need to create a sense of necessary and urgent of reform and to participate/contribute in a ownership and responsible manner.
Fifth, budget credibility has been started from the Ministry of Economy and Finance, but need to expand to all line ministries and institutions to ensure sustainability. All line ministries and institutions have to strengthen their budget management and implementation; especially their quarterly revenues and expenses plan to ensure effective and efficient cash flow management.
Sixth, financial accountability is improving in the Ministry of Economy and Finance and need to be strengthened and expanded in all Line Ministries and Institutions so that to establish a standard recording/reporting of accounting and financial system in a consistent, accurate, transparent and timely manner. All line ministries and institutions should develop a clear, accurate and timely recording/reporting of accounting and financial system consistent with government standard indentified by the Ministries of Economy and Finance.
Seventh, continue to improve and strengthen the development of ministry and sector policy to reflect the government’s policy, strategy and activity plan and to ensure a clear and measurable outcome and performance. All line ministries and institutions continue to strengthen and improve their budget strategy plan and national strategy development plan, especially the two policy objectives and five programs with the identification of clear, accurate and measurable indicators and targets.
Eighth, appropriate policy and institutional structure are the key factors to ensure effective and efficient operation of the ministry and institution and to identify the accountability and monitoring and result/performance measuring mechanism. All line ministries and institutions need to review the appropriateness of their policy and organizational structure to ensure effective and efficient implementation of activities and fulfill their policy goal.
Ninth, efficient, effective and productive human resources management and development become more important in this system changing stage. While implementing the Public Administration Reform Program for 2014-2018, all line ministries and institutions should focus on training and management of their own staff, not only for their routine works, but also for the reform activities, and especially for using new effective and sustainable systems.
Tenth, strengthening and increase the use of monitoring and evaluation system is an important factor for successful implementation of result/performance based and decentralized system which is being developed. All line ministries and institutions have to review, strengthen, increase and improve, where necessary, the appropriateness, adequateness, effectiveness, efficiency and productivity of their internal monitoring and evaluation system so that to comply with result/performance based and decentralized system.
Eleventh, “Concept on Budget System Reform in Cambodia 2013-2020” which have already been implementing since end of 4th terms and continue to implement for this 5th terms by the Government through “Rectangular Strategy Phase 3”is a core element of the Public Financial Management Reform Program. I have recently approved the publication of this Concept on Budget System Reform in Cambodia, 2013-2020, prepared by the Ministry of Economy and Finance for a wider dissemination. All Ministries and institutions need to prepare their budget management system reform action plan based on this concept and work toward a result/performance based and decentralized management system by 2020.
Twelfth, capacity to sustainably collect revenue is a key factor to ensure reliability of the budget, socio-economic development and social equity. In this connection, the RGC has recently developed and approved a “Medium term revenue mobilization Strategy 2014-2018” prepared and led by Ministry of Economy and Finance. Successfully implementation of this strategy, although led by Ministry of Economy and Finance, requires active participation from all concerned parties, especially all revenue collection institutions. Seeing the importance of this task, I wish to take this opportunity, while we are gathering in this precious event, to declare official implementation of the Medium Term Revenue Mobilization Strategy 2014-2018” from now on.
Our past activities and achievements show clearly that RGC has a strong commitment in implementing the reform and deep reform in all sectors. I wish also to emphasize again that these reforms emerged from our wisdom, not from any order. That means we set out and implement in a responsible and courageous manner, with our own current ability and capacity through steps and stages. Understood that “Reform is Life of Cambodia” we will continue to do it and will take it as our daily activities and continue to improve, strengthen, increase and expand our ability and capacity to best use of our potential and opportunity and as a result can catch up with new context of social, economic and political evolution in the country, region and in the world.
Before ending my speech, once again, on behalf of the RGC I wish to express my high evaluation and appreciation to leaders and officers of all ministries and institutions for their efforts in implementing this Public Financial Management Reform Program in a good-will and responsible manner which allow us to achieve this successful and proud results. Also my sincere thanks to all development partners for their value financial and technical contribution and good facilitation and coordination in the implementation of this public financial management reform program.
Finally, I wish all these good will, ownership, responsibility, efforts and involvement as well as good cooperation among relevant stakeholders become even stronger and stronger for successful implementation of the “stage 2 and commencement of phase 3 of this public financial management reform program” and other reforms as expected./.