Translating AFT Goals into Programme and Projects: The EIF experience

Sven Callebaut, AdviserMinistry of Commerce

sven.cdadviser@gmail.com

OBJECTIVE

By the end of the session, participants should be able to appreciate Cambodia’s participation in the Enhanced Integrated Framework (EIF)Programme Initiative how the EIF has helped Cambodia increase mainstreaming of trade and resource mobilization

PART II – CONTENTS

1. Aid-for-Trade Building Blocks in Cambodia2. EIF Programmes and projects

SESSION 1 – AID-FOR-TRADE BUILDING BLOCKS IN CAMBODIA

Promote of agriculture sector

Capacity building & HRD

Priv

ate

sect

or

deve

lopm

ent a

nd

empl

oym

ent

Deve

lopm

ent o

f Phy

sical

in

fras

truc

ture

Good Governance

1. Improved productivity, diversification & commercialization

2. Promote livestock farming & aqua-3. Land reform, mines clearance & UXO4. Sustainable management of national

resources.

1. Strengthening private sector & promoting investment & business

2. Development of industry & SMEs3. Development of labor market4. Development of banking & financial

sector

1. Development of transport & urban infrastructure

2. Water resource & irrigation system management

3. Electricity power development4. ICT development

1. Strengthening & enhancing education, science & technology, &Technical training

2. Promotion of health & nutrition3. Development of social protection system4. Enhancing implementation population

policy & gender equity

1

2

3

4

Second update of DTIS on 18 Feb 2014.

DTIS

/CTI

S U

pdat

es

RGC

‘s Tr

ade

Sect

or

Stra

tegy

Preparing for WTO Accession—Cambodia become the WTO’s 148th member on 13 October 2014 (almost 10 years after it had first applied).

National Socio-Economic Development and Poverty Reduction Strategy Trade Roadmap Strategy “Pro-Poor Trade Development Strategy”.

Presented to the international community at the Tokyo Round Table meetings in June 2001.

The 1st DTIS was prepared and validated in Nov 2001. Funding support from IF. Cambodia had been selected by the IF as one of three pilot countries, and launched by multilateral agencies (IMF,ITC,UNCTAD,UNDP,WB, and WTO).

The 2nd DTIS/CTIS 2007 was updated and launched by Cambodia’s Prime Minister in Dec 2007. Cambodia was the first country to update its initial DTIS under the EIF, the successor to the IF program. Funding support from the IF, UNDP, and technical contributions from the EU,GIZ,IFC, IMF, ITC, UNCTAD, and WB.

The 3rd DTIS/CTIS 2014-2018 was updated and launched by Cambodia’s Prime Minister in Feb 2014. Cambodia is the first EIF country to update its original DTIS for a second time. Funding support from the EIF, ADB, UNDP, WB, and technical support from Inter-Ministerial Committee.

The Trade SWAp is based onthe RGC-DPs commitments toincrease Aid for TradeEffectiveness:

1. Ownership2. Alignment3. Harmonization4. Managing for Results5. Mutual Accountability

OWNERSHIPThe Royal Government of Cambodia exercises full ownership and leadership over its trade policies, strategies and implementation measures

The Royal Government commits to:

• Prepare and update a Trade Integration Strategy, develop a monitoring framework and carry out an annual review of its implementation. Develop and update Trade SWAp Pillars road-maps in consultation with all stakeholders and align the national budget to support their implementation.

• Setting up the Department of International Cooperation in the Ministry of Commerce with the mandate to serve as the secretariat to the Steering Committee on Trade Development and Trade-Related Investment.

Development Partners commit to:

• Respect RGC ownership and leadership of its trade reform agenda, and to provide coordinated support to strengthen institutional and human capacity of ministries and agencies to achieve the targets of Trade SWAp Pillars.

ALIGNMENTDevelopment Partners will base their overall support on RGC's strategies, institutions and procedures

The Royal Government commits to:

• Put in place and maintain the Trade SWAp to increase transparency and accountability and to enhance aid effectiveness, by settingobjectives, strategic outputs, and monitoring indicators as well as identifying any relevant support required, including existing Government resources and AfT.

• Seek synergies between the Trade SWAp and the Public Financial Management Program and the Public Administration Reform and lead efforts to promote long-term capacity development by undertaking capacity assessments and developing comprehensive capacitydevelopment strategies and actions for the trade sector.

Development Partners commit to:

• Base their overall support on the priorities outlined in the Trade SWAp road-maps for each Pillar and provide coordinated support to strengthen Trade SWAp's institutions, systems, and procedures.

• Avoid the creation of new parallel structures (PIU/PMUs) and make increasing use of Trade SWAp’s institutions, systems and procedures.

HARMONIZATIONDevelopment Partner's AfT is more harmonized, transparent and collectively effective

The Royal Government commits to:

• Continue to work with the WTO General Council and Secretary General, in order to increase AfT flows to Cambodia and to improve harmonization and alignment, including within the Enhanced Integrated Framework.

Development Partners commit to:

• Within each Trade SWAp Pillar, develop and adopt to the maximum extent possible shared analyses and monitoring frameworks, common arrangements and simplified procedures for programs/projects management, including reporting and auditing.

• Increase the proportion of AfT channelled through the Trade SWAp and reduce the number of separate, duplicative missions and diagnostic reviews and studies.

MANAGING FOR RESULTSManaging resources and improving decision-making for results

The Royal Government commits to:

• Develop and Implement a framework to monitor the implementation of each Trade SWAp Pillar and prepare an annual progress review to be used to manage for results by reprioritizing and reallocating AfT, linking priorities to budget processes, to achieve targeted development results.

Development Partners commit to:

• Realigning to the maximum extent possible their programs and projects to the reprioritized activities in the Pillars’ road-maps based on annual implementation reviews.

MUTUAL ACCOUNTABILITYThe Royal Government and Development Partners are accountable for development results

The Royal Government commits to:

• Strengthening the role of all trade stakeholders in the planning and implementation of the Trade SWAp, making available information on the use of AfT to enhance transparency and accountability.

Development Partners commit to:

• Provide timely, transparent, and comprehensive information on AfT flows to improve transparency and accountability and to promote the alignment of AfT resources with the Trade SWAp.

SWAp represents a Programmatic Approach

A set of interventions aimed towards a

shared program goal

Program ApproachA set of

unrelated projects

Project Approach

SESSION 2 – EIF PROGRAMME IN CAMBODIA

EIF Donors

TFMESEIF Board

EIF Partner

Agencies

EIF Steering

Committee

EIF Countries

Global Level

NIUFocal Point

EIF National Steering

CommitteeEIF Country

Government

Donor Facilitator

Local donor

community

other trade government

entityPrivate sector &

civil societyLocal

development agenciesNational Level

Tier

1Ti

er 2

Brief description of economic and political situation and commitment to incorporating trade into national development strategy. Presented to Board for approval and participation in EIF.

Tier 2 projects

Technical Review

Pre-DTIS

DTIS/DTIS updates

Support to NIA’s projects

Aims at sensitizing national stakeholders (FP, potential NSC members), key government, private sector and civil society representative about the importance of mainstreaming trade, roles and functions within the EIF process, role of the DTIS and how to best ensure full country ownership and participation in the DTIS process. Funding up to $50,000.

DTIS is the cornerstone for integrating trade into development plans. It identifies the constraints blockages access to the multilateral trading system. Includes an action matrix. Aggregate funding up to $400,000 for DTIS and $400,000 for updates.

NIA project provides support to increasing the institutional capacity for trade mainstreaming, donor coordination and implementation of the matrix. They can be up to five years and $300,000 per year.

EIF Countries that have finalized the DTIS and Action Matrix can apply for Tier 2 funding. Tier 2 projects support the implementation of the Action Plan and small projects to overcome supply-side bottlenecks. Funding is between $1.5 to 3 million.

IF (1

998-

2007

)EI

F (2

008-

2015

)

1998

Tier 2 projects

Membership

Pilot Country

DTIS/DTIS updates

Support to NIA’s projects

2000 (together with Mauritania and Madagascar)

2001: First DTIS (WB-led)2007: First DTIS update (UNDP-led)2014: Second DTIS update (RGC-led)2015: Medium-Term Plan for AFT and Trade Markers

2009 - 2015: Tier 1 project (USD1.5M.)

2012-2015: CEDEP I2014-2017: CEDEP II2015-2018: CEDEP III ??

Projects contribution to Trade SWAp

Reform and Cross-Cutting Issues for trade Development.

Pillar Goal I:

Strengthening competitiveness in existing export industries and

promoting export diversification by improving

formulation and implementation of trade policies and regulations

Capacity Development.

Pillar Goal III:

Strengthening and Cambodian Trade Stakeholders to

implement, update and manage RGC’s trade

development agenda and to negotiate the country’s

interests in trade and trade-related investment forums.

Product and Service Sector Export Development.

Pillar Goal II:

Strengthen the supply capacity of the 19 product

and service sectors identified in the 2007

Cambodia Trade Integration Strategy (CTIS)

CEDEP ICEDEP II

CEDEP III ?TIER 1TDSP

Project Objective: The project aims at strengthening the in-country arrangements of the Enhanced Integrated Framework in order to increase Cambodia’s ownership of trade-related technical assistance (TRTA) and maximizing the benefits that the country, in particular the private sector, can derive from the Enhanced Integrated Framework.

1. Donors : EIF Multi Donor Trust Fund, managed by UNOPS

2. Implementing Entity : DICO/MOC (NIU)3. Board Approval : Date: September 29, 20094. Effective kick-off date : February 3, 20105. Duration : 5 years (until February 2, 2015)6. Original budget : US$1,293,9007. Additional budget (CTIS) : US$200,0008. Phase 1 no-cost extension : July 31, 2013 (6 months)9. Current end date : July 31, 201510.Last Supervision missions : July 2014 (UNOPS)

: February 2014 (EIF ES)

1. NIU Staffing and Training (includes CBP)2. Support to L/O and awareness in line ministries3. Support to NIA (meetings, training)4. Awareness raising on SWAp and EIF (in province,

with private sector)5. New project formulation (includes DTISU)6. Communication and Outreach7. Participation in trade-related events (for officials

and private sector reps)8. Evaluation and audits

Cambodia Export Diversification and Expansion Programme (CEDEP)

Background

Implementation by UN agencies

(difficult with TDSP)

CTIS 2014 identified10 Potential Export

Products

WTO Trade Policy Review (TPR) inNovember 2011 stressed need for

export diversification

Rectangular Strategy 2013-2018 focus on

economic diversification

18

EIF Tier 2: Cambodia Export Diversification and Expansion Programme (CEDEP)

CEDEP IExports of Milled Rice, High Value Silk, SWAp M&EApproved: August 6, 2012Funds available: USD2’407’714 (EIF), USD975’715 (others)Implemented by: IFC (rice), ITC (silk), MoC/DICO (M&E)End date: 2015-2016 (*)Core team: 10 membersMid-Term Evaluation: October 2014 (completed)

Exports of Cassava, Marine Fish products, ACAC, SWAp M&EApproved: January 13, 2014Funds available: USD3’283’589 (EIF), USD3’099’055 (**)Implemented by: UNDP (Cassava), UNIDO (Fish), Shift 360 (ACAC), MoC/DICO (M&E)End date: 2017(*)Core team: 15 membersMid-Term Evaluation: October 2015

(*): Depends on actual MoU signature date - (**) Subject to change

Project Objective: The main objective of the CEDEP I and II is to strengthen and diversify export supply capacity in five of the nine (out of 19) Pillar 2 sectors that have been identified by the Government as export sectors requiring immediate priority action. They include rice, silk, cassava, corn, fish, tourism, garment, processed food, and manufacturing assembly. CEDEP II

CEDEP Contribution to SWAp

• From Trade SWAp Pillar 2, CEDEP targets:

Milled Rice (CEDEP I) IFCHigh Value Silk (CEDEP I) ITC Cassava (CEDEP II) UNDPMarine Fisheries (CEDEP II) UNIDOTourism (CEDEP II) SHIFT 360 (NGO)CornGarmentProcessed Food (CEDEP III – PLANNED)Manufacturing Assembly Clusters (CEDEP III – PLANNED)

25th IC, 12/19/2012 20

Individual CEDEP Component Structure

Export readiness: increase standards, branding

Market intelligence: meet buyers, access information

Structure dialogue: create/strengthen association, support federation and PPD

• Milled Rice impacts: Rice being the largest employment sector of the Cambodian

economy, development of milled rice exports will have a positive impact on poverty reduction, especially through income growth in many regions of the country. The competitiveness of Cambodian rice exports is increased, resulting in better earnings of rice millers and farmers in the milled rice supply chain, led by its higher value fragrant rice segment.

• Milled Rice outcomes: Enabling Environment for the Cambodian Private Sector to meet the

Government’s targets for Milled Rice exports is enhanced Identifying new major import market opportunities for Rice Millers; Clinching and completing export contracts by meeting quantities,

prices, and quality requested by importers for Cambodia Rice Millers.

Milled Rice Impacts and Outcomes

25th IC, 12/19/2012 23

• High Value Silk impacts: Increased competitiveness of the silk export sectors will have a

positive impact on poverty reduction through employment creation and income growth, especially among women. The focus on high value silk exports will contribute to developing Cambodia’s image of an economy that can compete not only on price but also on quality.

• High Value Silk outcomes: Ensure that improved quality and product design of handmade

Cambodian silk products meet market demand requirements for targeted export markets and international visitors;

Increase export sales of handmade high value silk products and production networks to five selected importing markets and international visitors;

High Value Silk Impacts and Outcomes

25th IC, 12/19/2012 25

Impacts:Cassava is Cambodia’s second largest crop employing several hundred thousand farmers. The competitiveness of Cambodian cassava increases resulting in opening of new markets (geographical and products) and improved pricing of its exports

Outcomes:The needs of the cassava export sector are better understood and the sector is structured to better focus the policy dialogue with the Government and improve the enabling environmentA group of cassava processors has been identified and made export-ready and has succeeded in developing competitive exports to new markets

Cassava Impacts and Outcomes

25th IC, 12/19/2012 27

Impacts:Fisheries, including marine fisheries, are one of Cambodia Government’s priority sectors for export diversification. The sector employs thousands of people. The competitiveness of Cambodian marine fisheries exports increases resulting in opening of new markets (geographical and products) and improved pricing of its exports.

Outcomes:The needs of the marine fisheries product export sector are better understood, the sector is better structured, the policy dialogue with the Government is enhanced, and the enabling business environment is improved;A group of marine fisheries processors have become export-ready and are increasing their export business including to new markets

Marine Fisheries Exports Impacts and Outcomes

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Impacts:Tourism is Cambodia’s second largest export sector in income term and, most likely, the largest one in employment terms. The sector has an important role to play in contributing to employment and income growth in the economyWith increasing availability of skilled Cambodian personnel for the hospitality industry, Cambodia is able to meet its ambitious development targetOutcomes:Hotel and restaurant operators are able to improve the quantity and quality of their offering through improvements in the number and quality of trained Cambodian kitchen staff available in the labor market;A governance and financial model has been put in place to ensure long term sustainability of RACA independent of Development Partners financial support

RACA Impacts and Outcomes

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• Evaluation impact:

Enhancing the Government’s ability to lead and drive its Aid for Trade as a means to strengthen the effectiveness of the mainstreaming of Trade in its development policies and the development of its institutions. This is consistent with Cambodia’s Trade SWAp Goal #5.

• Evaluation outcomes:

Strengthening the NIU’s capacity to evaluate impacts, results, and progress of technical assistance under Trade SWAp;

Strengthening the NIU’s capacity to disseminate progress and results of technical assistance under Trade SWAp.

Evaluation Impact and Outcomes

Summary(your “take away”)

1. EIF a long-term partner in Cambodia2. Cambodia has been able to seize all opportunities

and stays at fore-front3. Robust yet evolving NIA4. Tier 1 in support of Pillar 3, Tier 2 of Pillar 25. Increased government ownership of projects6. Obvious synergies with other DPs7. Uncertainty on where the programme is going at

global level affects predictability of AFT

For more information on Aid-For-Trade:

OECD Website (AFT page):www.oecd.org/dac/aft

WTO website (AFT Page):www.wto.org/english/tratop_e/devel_e/a4t_e/

EIF Websitewww.enhancedif.org

MoC / Trade SWAp Websitewww.moc.gov.kh/tradeswap

MoC FACEBOOK PAGEwww.facebook.com/moc.gov.kh