CAMBODIA

and

AUSTRALIAN BUSINESS VOLUNTEERS

A COUNTRY STRATEGY

FOR THE PERIOD 2004-06

Country Strategy - Cambodia

Table of Contents

EXECUTIVE SUMMARY 4
1 BACKGROUND 7
Causes of poverty 10
Lessons relevant to Cambodia 11
Consultation with key stakeholders 11
Development strategies of the Royal Cambodian Government 11
Donors in country – other international agencies 12
2 AUSTRALIA’S NATIONAL INTEREST 13
AusAID program 13
3 AUSTRALIAN BUSINESS VOLUNTEERS 14
4 ABV’S PROPOSED STRATEGY FRAMEWORK (2004 – 2006) 15
ABV Strategy supports the development strategies of the RGC
and Australia 17
5 IMPLEMENTATION 18
In-country structure and geographic focus 18
Move to program delivery mode 18
Program flexibility 19
Responsiveness to clients’ requests 19
Integrating information and communication technologies 19
Need to demonstrate success and quick results 19
Gender and development 20
Environment 20
Identifying synergies and Partnerships 20
External bodies as partners 21
Other volunteer agencies 21
Key Government ministries 22
Risk Assessment 22

6 ASSESSMENT MONITORING AND EVALUATION 22

Annex 1 Objective Tree: ABV Cambodia Country strategy 2004 - 2006 23

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Acronyms

ABAC Australian Business Association of Cambodia

ADB Asian Development Bank
AIRC Australian Industrial Relations Commission
ABV Australian Business Volunteers
AVI Australian Volunteers International
AYAD Australian Youth Ambassadors for Development
CCC Cooperation Committee of Cambodia
CECI Canadian Centre for International Studies and Cooperation
CLEC Cambodian Legal Education Centre
GAD Gender and Development
GMAC Garment Manufactures Association of Cambodia
ICT Information Communication Technologies
IMF International Monetary Fund
MPDF Mekong Project Development Facility
NPRS National Poverty Reduction Strategy
RGC Royal Government of Cambodia
SME Small and Medium Enterprise
VSO Volunteer Service Overseas
WB World Bank
WTO World Trade Organisation

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EXECUTIVE SUMMARY

Cambodia has made impressive progress since the signing of the Paris Peace
Accords in 1991. Yet despite the great gains in terms of national
reconciliation, peace and economic growth the country remains one of the
poorest in the world with social indicators among the worst in the region.
The majority of the population live in poverty in rural areas, depending on
subsistence agriculture and are highly vulnerable to food insecurity,
especially resulting from natural disasters such as floods and drought.

In response to these needs Cambodia has received generous development

assistance from many multinational and bilateral donors over the past
decade. Cambodia is now at a crucial stage in terms of development
assistance as international donors are now faced with competing demands
for their assistance and are looking to the Royal Government of Cambodia
(RGC) to demonstrate its’ commitment to reform by improving governance,
revenue collection and the distribution of national resources to poverty
reduction efforts and to strengthening social sectors.

Australia has a humanitarian as well as practical interest in seeing Cambodia

grow as a stable and prosperous nation able to contribute to regional
economic growth and assist in combating the major concerns of
international crime, especially terrorism. The Australia-Cambodia
Development Cooperation Strategy aims to advance Australia’s national
interest though contributing to poverty reduction and sustainable
development. The three strategic objectives are:
• To increase the productivity and incomes of the rural poor;
• To reduce the vulnerability of the poor, and
• To strengthen the rule of law

The Australian Business Volunteers (ABV) Cambodia Country Strategy seeks

to contribute to poverty reduction and sustainable development in
Cambodia through the following three strategic objectives:

1. Strengthen the capacity of organisations that work directly in

administrative and financial reform and governance
2. Promote the growth and development of small and medium
enterprises
3. Support the growth of the tourism and hospitality industry

These three strategic objectives are interrelated and mutually supportive

and are aligned with the strategic objectives of the Australia-Cambodia
Development Cooperation Strategy and also the National Poverty Reduction
Strategy (NPRS) of the RGC. The ABV Cambodia Country Strategy has
identified key partnerships with other development agencies (especially
AusAID) and offers the opportunities for synergising with, and value adding
to, existing development programs.

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Good governance is a prerequisite for sustained economic growth and the

reduction of poverty. The Australian Government, along with other donors,
are addressing the important issues of improving administrative, legal and
financial reform and economic governance at the national level. ABV seeks
to assist in this effort by focussing on strengthening the capacity of
organisations that work directly in administrative and economic reform and
governance.

ABV recognises that to achieve improvements in Governance it is necessary

to work with civil society and the private sector as well as the government
sector. Thus, ABV will assist local NGOs to strengthen their overall and
financial management. ABV further recognises that education is a long term
driver for improving governance by contributing to an educated population
that will enable and demand change.

By strengthening the capacity of organisations that work in administrative

and financial reform and governance ABV will:

• Strengthen banking institutions resulting in improved customer

service and a broader range of financial services offered, especially
to the private sector
• Strengthen the institutional capacity and policies of bodies working in
accreditation enabling them to support the Cambodian people
• Assist Cambodian businesses with labour dispute resolution
• Strengthen the administrative and financial capacity of local NGOs so
that they can provide greater assistance to communities

The Royal Government of Cambodia and donors are looking to the private
sector in Cambodia to play a major role in poverty reduction and the
promotion of sustainable development. ABV has valuable expertise to offer
the private sector, especially in business development, financial
management, marketing, strategic planning and managerial, technical and
vocational skills development. ABV has volunteers with particular strengths
in many agribusinesses and could assist other partners and projects working
in the agriculture sector, which is a priority focus of current Australian
bilateral assistance.

By assisting the development of a vigorous private sector, especially small

and medium enterprises (SMEs) ABV will:

• Assist SMEs to develop their business activities

• Enhance the technical and vocational skills of SME workers
• Enhance the capacity of education and training institutions working in
rural areas to provide education and training
• Assist the expansion of the labour force of educated and skilled
workers

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• Assist in the implementation of strategies for improving opportunities

for SMEs
• Assist NGO business activities so that they operate successfully in the
market place
• Assist in the application of improved farming techniques by
subsistence and commercial farmers
• Improve post harvest processing for selected agricultural products
• Improve the understanding of the implications of World Trade
Organisation (WTO) ascension by local SMEs

Tourism and hospitality are Cambodia’s second major industry and offer
important opportunities for job growth. Cambodia is uniquely placed to
exploit opportunities afforded by its unique ancient cultural heritage and
world heritage listed sites such as the Angkor Wat complex in Siem Reap.
Yet Cambodia faces many constraints in developing its’ tourist sector such
as, insufficient skilled human resources, poor infrastructure, limited banking
and financial services and poorly developed business and marketing skills.

By providing assistance to the tourism and hospitality sector ABV will:

• Strengthen the hospitality and tourism sector in Siem Reap and

Phnom Penh.
• Enhance the skills and competencies of people employed in the
tourism sector.
• Assist the growth of tourism agencies
• Assist the growth of business of individual hotels

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1 BACKGROUND

Cambodia has made significant progress in stabilising the economy and

maintaining economic growth (averaging 5 per cent over the last decade)
since the signing of the Paris Peace Accords in 1991. Peace has been
restored; basic travel and transportation infrastructure improved, new
schools and hospitals constructed and new democratic systems of
governance have been introduced. The new constitution of the Royal
Government of Cambodia (RGC) specifically commits the government to the
creation of a market based open economy operated according to
internationally accepted rules and law.

Yet, Cambodia remains one of the world's least developed countries with an
estimated GDP of only US$300 per capita per year, barely one-tenth that of
Thailand. Moreover, the growth that has been achieved has not generally
translated into broad improvements in the well being of the majority of
Cambodian people, especially those in rural areas, where the majority of
Cambodians live in chronic poverty. The United Nations Development
Programs 2002 Human Development Index ranks Cambodia 130th among 162
countries in terms of quality of life. There has been little improvement in
social indicators over the last decade (see Box 1). Education and health
services have improved but are still of poor quality and will both need
sustained assistance for a considerable period. In the long term it is
universally accepted that the development of Cambodia’s human resources
through education and training are fundamental pillars for development.

In response to these needs Cambodia has received major development

assistance from a wide range of donors and multinational agencies since
1992. The Asian Development Bank (ADB), World Bank (WB) and
International Monetary Fund (IMF) have significant programs in Cambodia
and are taking on lead roles in important sectors, such as health, education
and infrastructure. NGOs, both international and local, also provide
important contributions in many sectors and geographic areas that the
government and major development projects are unable to assist.

While it is recognised that substantial international support is needed to re-

establish and build up the institutions, human capacity, and infrastructure
essential to the country's successful development, the international
community is looking to Cambodia to demonstrate its commitment to
improving the quality of its governance and to implementing the reforms
essential for sustained and equitable economic growth. There is discordance
between Government rhetoric and assurances of change and actions.
International donors continue to list demobilisation, forestry, law on
investment, the appointment of an Auditor General and having the National
Audit Authority functioning, administrative and fiscal reform as key
concerns.

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Box 1: Cambodia Data Profile

Political System: Constitutional Monarchy

Levels of Government: 21 provinces and 3 municipalities, divided into

districts and communities (rural)

1998 2001 2002

People
Population, total 11.5 million 12.3 million 12.5 million
Population growth (annual %) 2.3 2 1.8
Life expectancy (years) .. .. 54
Infant mortality rate (per .. .. 96
1,000 live births)
Under 5 mortality rate (per .. .. 138
1,000 children)
Child immunization, measles 52 59 52
(% of under 12 mos)
Literacy total (% of ages 15 66.5 68.7 69.4
and above)
Literacy female (% of ages 15 55.1 58.2 59.3
and above)

Economy
GDP (current US$) 3.1 billion 3.7 billion 4.0 billion
GDP per capita (US$) 270 301 320
GDP growth (annual %) 3.7 5.7 5.5
Value added in agriculture (% 47.1 37.6 35.6
of GDP)
Value added in industry (% of 17.9 25.6 28
GDP)
Value added in services (% of 35 36.8 36.4
GDP)
Exports of goods and services 32.1 54.4 59.2
(% of GDP)
Imports of goods and services 45.3 64.5 67.4
(% of GDP)
Foreign direct investment, 242.9 million 148.1 million 53.8 million
net inflows in reporting
country (current US$)
Present value of debt .. .. 2.5 billion
(current US$)
Aid per capita (current US$) 29.3 34.2 39

Source: World Bank Development Indicators database, April 2004

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Following the July 2003 elections conflict between Cambodia’s three main
political parties resulted in a delay of one year before the formation of a
government. This impacted on Cambodia’s relations with donors and the
international community. International Development agencies and all
donors (with one or two exceptions) waited for the formation of a
constitutionally mandated government before they could sign agreements
for new programs of assistance. In this context it is important to note that
China signed agreements worth $600 million USD in April 2004 with the non-
constitutionally mandated Government. This large amount, which far
exceeds the bilateral development aid of most other donors, underscores
the great importance of China to Cambodia in political and economic terms.
In this light it is important to recognise the ASEAN-China Early Harvest
Program which provides a huge opportunity to Cambodia to sell nearly 300
product categories to China tariff-free. This potentially, especially in
agribusinesses, far out ways opportunities to export garments to the US and
Europe and is therefore a major focus of the RGC.

Yet despite political tensions between the different political parties the
Government is outward looking and undertaking major efforts to connect
Cambodia with international bodies (especially ASEAN) and regional forums.
Cambodia has applied for ascension to the World Trade Organization. Due
to the current situation Cambodia has been granted a three month extension
(until September 04) to allow for the formation of a government and the
passage of required legislation.

Donors and the RGC recognise that the private sector is the engine of
growth and employment creation, and it is therefore one of the pillars of
the RGC’s National Poverty Reduction Strategy and the World Bank Country
Assistance Strategy1. The WB is seeking to work with both the Government
and private sector to help identify ways first, to contribute to growth;
second, to broaden the range of sectors and activities that are able to hire
and pay good wages; and third to enhance the private sector’s role in
delivering public services like infrastructure.

This initiative is critically important since economic growth has been rapid
in only two areas – garments and tourism. The garment sector has grown
from around $20 million USD to over $1.4 billion USD. There is a concern
that when Cambodia’s Most Favoured Nation Status with the United States
expires at the end of 2004 many garment factories will close and 30,000
young women will lose their jobs. Converting these market opportunities
into jobs will require that the private sector has the confidence to invest
and a business environment that fosters growth.

The private sector also offers important opportunities in the delivery of

health and education services. International donors in collaboration with
the RGC are using the social marketing of antimalarial drugs and condoms
(as part of anti HIV and AIDS efforts). Private educational institutions are

1
The World Bank Newsletter, Cambodia, March 2004, Volume 2, Number 3

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providing a vibrant and rapidly expanding range of opportunities for

Cambodia’s youth.

Yet the private sector isn’t contributing as much as it could to the

development of Cambodia. Key constraints that have been identified are
Cambodia’s low labour productivity and low value adding. Some of the
reasons for this low productivity are inadequate human resources,
corruption, and anti-competitive or informal practices by some companies
that may gain an unfair advantage by not paying taxes. There are too many
inspections, licensing requirements and steps required to trade products.
Another major constraint is lack of access to working capital. This has been
widely recognised by both the donor community and Government and is the
reason why banking reform has been strongly emphasised as a priority.
There is a need to improve the legal and regulatory environment for private
participation.

A strong private sector that creates jobs is essential since an estimated

200,000 young people will enter the workforce during each of the
forthcoming 10 years. Furthermore, a strengthened private sector in rural
Cambodia will provide employment outside the Phnom Penh region. Tjis
will prevent the inevitable poverty driven drift of the young and other job
seekers into the capital, something that will surely happen unless the
imbalance of economic resource distribution is not reversed or at least
reduced.

Causes of Poverty

The causes of poverty in Cambodia have been deeply analysed and include
many interrelated factors such as.

• The recent history of conflict and turmoil

• Massive loss of human resources
• Low education levels
• Poor health
• Poor education and health services
• Lack of Government capacity and resources
• Inadequate agricultural production and food insecurity
• High population growth
• Marginalisation of people especially the disadvantaged
• Problems in access to land, land tenure and landlessness
• Poor legal framework
• Poor accountability for management of public resources allowing
corruption and waste
• Poor infrastructure

Addressing the causes of poverty is a complex task which will require long
term interventions and commitments by the RGC in consultation with
numerous donors and development partners.

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Lessons relevant to Cambodia

Cambodia has been said to share some of the characteristics of countries

defined as “poor performers” and it has been suggested that the following
lessons from the literature in this field may be relevant2.

• There is a need to remain engaged as disengagement leads to further

deprivation of the poor and state failure
• Knowledge transfer may be more important that finance
• Importance of highly focussed reform agenda with realistic objectives
likely to produce large and quick pay-offs
• Service delivery should be prioritised
• Donors should broaden engagement to groups other than government,
such as NGOs and the private sector
• Importance of accountability and scrutiny of donor activities
• Donor coordination should be enhanced

Many of these lessons are highly relevant to ABV and its program in
Cambodia. ABV focuses on knowledge and skills transfer and the
development of human capital and explicitly targets organisations other
than Government such as the private sector and NGOs.

Consultation with key stakeholders

ABV has undertaken extensive in-country consultations with key

stakeholders including RGC personnel, AusAID, major donors and aid
agencies, non-government organisations, community-based organisations
and key representatives of the private sector. As a result of this process
several potential development partners were identified.

Development Strategies of the Royal Cambodian Government

In recent years the Government of Cambodia, in consultation with donors,

has developed several key strategy documents to guide development
activities. These documents are described below. While these development
plans and strategies establish a sound framework for promoting growth and
reducing poverty, there has been an inadequate setting of priorities and
scheduling of resources3.

The Triangle Strategy

A 10 year strategic agenda, known as the Triangle Strategy, was formed
after the 1998 election and comprises three sides:
• Building peace, stability and security;
• Integrating Cambodia into the region and international relations; and
• Promoting economic and social development through the
implementation of reform programs.
2
Australia-Cambodia Development Cooperation Strategy, 2003 – 2006.
3
Australia-Cambodia Development Cooperation Strategy, 2003 – 2006.

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While progress has been made achieving the objectives of the first two sides
of the Triangle, the third side has not seen significant progress. In addition
the current lack of a mandated government could potentially undermine the
progress that has been achieved on the first two sides.

National Poverty Reduction Strategy (NPRS)

The National Poverty Reduction Strategy (NPRS) 2003 – 2005, which sets out
the framework for poverty reduction, built on the Second Socio-Economic
Development Plan 2001 – 05. The NPRS identifies the following eight
priority poverty actions:
1. Maintaining macroeconomic stability
2. Improving rural livelihoods
3. Expanding job opportunities
4. Improving capabilities
5. Strengthening institutions and promoting governance
6. Reducing vulnerability and strengthening social inclusion
7. Promoting gender equity
8. Priority focus on population

However while the NPRS is based on a sound analysis of poverty and has
good potential as a tool for promoting better coordination of donor and
government, the strategy basically presents a comprehensive list of
development objectives with little prioritisation4.

Cambodia’s Governance Action Plan (GAP),

Cambodia’s Governance Action Plan (GAP), announced in 2000, outlines the
RGC’s strategic approach to legal and judicial reform, fighting corruption,
administrative reform and decentralisation, public finance reform;
promotion of gender equity, and strengthening natural resource
management.

The RGC also places a high priority in WTO accession to maintain and
improve competitiveness.

Donors in Country - Other International Agencies

Almost one third of Cambodia’s budget is funded by international aid. China

is the largest donor to Cambodia, followed by Japan, the EC, World Bank,
ADB, and UN agencies. Important medium sized donors include: Australia,
the US, France, the UK, Germany and Sweden.

4
Australia-Cambodia Development Cooperation Strategy, 2003 – 2006.

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2 AUSTRALIA'S NATIONAL INTERESTS

Australia's interests in Cambodia include promoting democratic

development, stability and prosperity; supporting regional economic
integration; and combating transnational crime (including people smuggling,
narcotics, and child sex tourism).

AusAID Program

Australia announced the resumption of bilateral aid to Cambodia in April

1992. Over the past decade Australia’s assistance has shifted in focus from
emergency assistance to longer-term development.

Australia is currently the fourth largest bilateral aid donor to Cambodia

after China, Japan and France. In 2002-03 Australia expects to provide $24.5
million for bilaterally agreed activities and another $15.1 million for
humanitarian and emergency programs, regional programs and NGO
activities.

Agriculture has been a major focus of Australian aid since 1987 because of
its importance in promoting broad-based economic growth in a country
where the majority of the population are dependent on subsistence
agriculture.

Other sectors that were prioritised in the 1999-2003 Country Strategy were:
health, education, governance (particularly criminal justice) and de-mining.
The new strategy 2003 – 2006 sharpens the focus of Australian aid and aims
to target Australian aid to a smaller number of areas where it can add
value, thereby increasing effectiveness and impact. Agriculture, private
sector development, disaster preparedness and governance are the current
areas of focus of Australian aid.

The goal for the Australia-Cambodia Development Cooperation Program is:

“to advance Australia’s national interest through contributing to poverty
reduction and sustainable development in Cambodia.” The program focuses
on poverty alleviation but recognises that real poverty reduction depends on
Cambodia's own success in mobilising and effectively managing non-aid
resources for domestic investment.

The three strategic objectives for the program are:

1. To increase the productivity and incomes of the rural poor
2. To reduce the vulnerability of the poor
3. To strengthen the rule of law

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3 AUSTRALIAN BUSINESS VOLUNTEERS

Since it was established in 1981, ABV has completed more than 2500
assignments in 24 countries in the Pacific and South East Asia. ABV aligns
itself with the aims of the Australian Government’s overseas aid program.
ABV contributes by providing Australian and New Zealand expert volunteers
who, through sharing their skills and experience with local counterparts,
assist businesses and organisations in developing countries to grow and
thrive. ABV focuses strongly on developing human capital.

ABV has been active in Cambodia since 1998, undertaking approximately 120
assignments in that time. The current ABV program in Cambodia is the
largest in SE Asia for a variety of historical reasons and is likely to remain a
major program. Major areas of ABV input have been governance and human
resource development. ABV also supports the private sector.

The strength of ABV’s program has been its flexibility, ability to respond
quickly and continuously to client’s requests and meeting identified training
needs. ABV has a large data base of volunteers and can draw on
exceptionally skilled and experienced individuals. As the name “Australian
Business Volunteers” explicitly indicates ABV has particular strengths in
imparting business skills. ABV volunteers are skilled and experienced
tradespeople, business people and professionals. Some examples of skills
available are: business planning managers, HR managers, training
professionals, accountants, agricultural experts, vocational education
managers, market advisors, bankers, project managers, and information
technology professionals.

At the same time ABV recognises that it also faces specific constraints which
are:
1. ABV can only respond to applications submitted by local clients and is
therefore client driven. If no client requests assistance ABV does not
send volunteers from its own side.
2. ABV recognises that it is necessary for a client to be able to absorb
assistance provided. In other words there must be some existing
capacity to permit further capacity building. In this light clients are
normally asked to provide a local contribution to ensure “ownership”. In
the standard delivery model this includes the provision of reasonable
accommodation and a small living allowance. Clients are also required
to provide a work place for the volunteer. These requirements mean
that many local micro, small and medium enterprises and organisations
(such as local NGO’s) are unable to host a volunteer unless ABV provides
part or full funding for the assignment. ABV can provide full support if it
deems that the client and assignment warrant it, yet at the same time
efforts will be made to ensure client ownership and commitment.
3. Previously ABV was not well placed to undertake bottom up community
development assignments since such assignments require long term
inputs and also because its volunteers usually will not be trained in
development work or have local language capabilities. ABV is addressing

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this constraint in two ways. The first is by recruiting volunteers on the

basis of core competencies to undertake skills exchange. The second is
the development of an interactive web based course on capacity building
and skills exchange which will be made available to volunteers.
4. ABV is a relatively small organisation and is not in a position to drive
change at the National level in host countries, as multinational
organisations and Governments can do with conditions on aid and policy
dialogue.
5. ABV contributes through skills transfer and does not provide
infrastructure or capital equipment.
6. Assignments are short term (usually from 1 – 3 months in duration, 6
months is maximum).

From consultation with stakeholders it is apparent that ABV should not only
continue to respond in a timely manner to requests for assistance, but
should also seek to develop partnerships with other delivery organisations in
order to complement and strengthen existing programs and to target areas
of identified need. In this way ABV will be able to value add to existing
programs.

4 ABV’S PROPOSED STRATEGY FRAMEWORK (2004 – 2006)

ABV’s strategy seeks to contribute to poverty reduction and sustainable

development in Cambodia through the transfer of skills by using volunteer
expertise. On the basis of the development needs facing Cambodia and
ABV’s strengths and capacity to deliver assistance the following three
strategic objectives for the ABV Cambodia program have been identified:

1. Strengthen the capacity of organisations that work directly in

administrative and financial reform and governance.
2. Promote the growth and development of small and medium
enterprises.
3. Support the growth of the tourism and hospitality industry.

These three strategic objectives are interrelated and mutually supportive.

Improving governance will directly support the growth of the SME sector and
the growth of the SME sector will drive improvements in governance (such as
by promoting a more favourable legal and regulatory environment for
business). Likewise improving governance will strengthen opportunities for
the growth of the tourism and hospitality industry since a favourable
perception of Cambodia as a tourist destination (i.e. stability, peace,
security and reliability of services such as banking, hotel accommodation
and transport) will be essential for the expansion in tourism. Conversely,
efforts to expand and strengthen the tourism sector will drive changes in
governance (eg immigration and visa procedures, improving banking
services). All these objectives will support the reduction of poverty and
expansion of sustainable employment growth.

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The objective tree (Annex 1) sets out the specific objectives, and outcomes,
in support of the three strategic objectives for the ABV program.

1. Strengthen the capacity of organisations that work directly in

administrative and financial reform and governance

Good governance is a prerequisite for sustained economic growth and the

reduction of poverty. The Australian Government, along with other donors,
are involved in addressing the important issues of improving administrative,
legal and financial reform and economic governance at the national level.
ABV can assist in this effort by strengthening the capacity of organisations
that work directly in administrative and economic reform and governance,
such as the Council for Administrative Reform, the Cambodian Arbitration
Council, the Cambodian Accounting Council, the Accreditation Committee
for Cambodia (for Higher Educational Institutions), and the Garment
Manufactures Association of Cambodia.

ABV recognises that to achieve improvements in governance it is necessary

to work with the government sector, civil society, and the private sector.
Thus ABV will assist local NGO’s to strengthen their overall and financial
management. ABV further recognises that education is a long term driver
for improving governance by contributing to an educated population that
will enable and demand change.

2. Promote the growth and development of small and medium

enterprises

It is well recognised that foreign aid and national governments alone cannot
reduce poverty nor provide the resources required for long term
development and that the private sector has a major contribution to make.
However, as described above this sector faces many challenges, such as a
lack of a supportive business environment, lack of business and marketing
skills, poor infrastructure, lack of access to working capital and a shortage
of trained and skilled local personnel.

Yet one of the most important requirements for successful private sector
development is to adopt a market based approach so that markets are
identified before efforts are made, and resources expended, in business and
product development.
There are many opportunities for ABV volunteers to contribute to private
sector growth. ABV has valuable expertise to offer especially in market
analysis and planning, business development, financial management,
marketing, strategic planning and managerial, technical and vocational skills
development. ABV has volunteers with particular strengths in many
agribusinesses and could assist other partners and projects working in the
agriculture sector, which is a priority focus of current Australian bilateral
assistance.

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3. Support the growth of the tourism and hospitality industry

Tourism and hospitality are Cambodia’s second major industry, after the
garment and foot ware industries and offer important opportunities for job
growth. Cambodia is uniquely placed to exploit opportunities afforded by its
unique ancient cultural heritage and world heritage listed sites including the
Angkor Wat complex in Siem Reap. In addition Cambodia has many other
opportunities to promote tourism, including for example the coastal cities of
Sihanoukville, Kep and Koh Kong as well as ecotourism in the mountainous
North East and South West regions. Because of these exceptional and
unique opportunities National Governments in the Mekong Sub Region are
actively working on regional tourism efforts. The fact that one of the
worlds’ major river systems – The Mekong – transits Lao PDR, Thailand,
Cambodia and Vietnam also offers special opportunities for luxury regional
river tourism. Yet Cambodia faces many constraints in developing its’ tourist
sector including, insufficient skilled human resources, poor infrastructure,
limited banking and financial services and poorly developed business and
marketing skills.

ABV Strategy Supports the Development Strategies of the RGC and

Australia

The ABV Cambodia strategy is consistent with, and supportive of the

development strategies of both the RGC and AusAID since it focuses on
poverty reduction through knowledge and skills transfer and the
development of human capital and explicitly targets organisations other
than Government such as the private sector and NGOs. Stated program
outcomes directly support action identified under the NPRS including:

• Improving rural livelihoods

• Expanding job opportunities
• Improving capabilities
• Strengthening institutions and promoting governance
• Reducing vulnerability and strengthening social inclusion

Furthermore the strategic outcomes are consistent with and supportive of

the following outcomes listed in the Australia-Cambodia Development
Cooperation Strategy:

• Strengthened application of improved farming techniques by

subsistence and commercial farmers
• Improved post harvest processing for selected products
• Increased access to market information for selected agricultural
products
• Strategies to address food insecurity of poor households implemented
• Strengthened revenue collection and expenditure management

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5 IMPLEMENTATION

The ABV Cambodia program will be implemented on the basis of the

following elements.

In-country structure and geographic focus

Currently ABV has only a part time Country Representative located in the
capital Phnom Penh. Currently there are plans to investigate the feasibility
of appointing a full time Country Representative in Phnom Penh and part
time agents in Siem Reap and Battambang. It has not been possible for the
Representative to cover these locations due to limited time and in country
support budget. It is likely that if agents were found more assignments
would be forthcoming in these areas. Yet there is a need to review what
opportunities exist in these locations for ABV. Siem Reap and Battambang
have been identified as sites of strategic focus for the following reasons:

• ABV has had projects in these two locations before.

• Siem Reap is a major city offering the possibility of assignments in
the vital industry of hospitality and tourism and also has a growing
SME sector.
• Siem Reap Province itself is very poor and has many SMEs.
• Battambang is considered Cambodia’s second largest city and
strategically important because of its location near Thailand and
agricultural industries.
• Although much development work has been done in the Battambang
region there are still huge needs in the north west of Cambodia where
ABV could work, especially in collaboration/relationship with other
NGOs and partners. ABV has worked with NGOs conducting rural
development work in the north west in the past.

Move to Program Delivery Mode

ABV delivers assignments through two modes – stand alone projects and
programs. A program is any series of inter-related assignments involving a
single client. It can involve multiple volunteers, involved in multiple phases,
which build on the one another to achieve an overall goal. The Program
model enables ABV to tackle more complex and multi-dimensional client
requests. It requires a longer-term partnership between ABV and the client,
as Program’s may run over a number of years. The advantages of a Program
lie in the ability to develop solid working relationships with a client, and in
enhancing the quality and sustainability of the Program outcomes. Since
programs are more likely to deliver greater outcomes than individual
projects the new ABV Cambodia program will endeavour where possible to
deliver assignments though the program model.

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Country Strategy - Cambodia

Program flexibility

ABV recognises the importance of maintaining flexibility to respond to new

priorities from both the RGC and AusAID. In addition since ABV can only
respond to a clients’ request it is further recognised that our ability to place
volunteers in assignments aligned with this country strategy will be
dependent upon identifying and working with worthy clients able to meet
ABV assignment assessment criteria as structured in ABV’s quality
framework.

Responsiveness to clients’ requests

ABV recognises the importance of being able to support requests from

clients for assistance in areas that may lie outside the above strategic
objectives, provided that these assignments clearly contribute to poverty
reduction in a sustainable way. ABV believes it is important to remain
responsive to the needs of Cambodian people. All applications for
assistance will be carefully evaluated according to ABV’s quality framework.

Integrating Information and Communication (ICT) Technologies

ABV will endeavour to use opportunities afforded by recent developments in

ICT in Cambodia and thus support current initiatives in this area described in
the Australia-Cambodia Development Cooperation Strategy. These
initiatives are the result of the Virtual Colombo Plan which aims to use the
opportunities presented by information and communication technologies
(ICTs) to enhance access to knowledge in developing countries.

ABV will explore opportunities to support the Cambodian Knowledge Centre

and the implementation of an Open University policy within the Norton
University Governing Council and within the newly established Cambodian
Higher Education Association (CHEA) which offer the possibility of delivering
the Diploma of Foundation Studies (DFS) to the 40% of High School graduates
who reside beyond Phnom Penh. This would be valuable for human resource
development.

Furthermore ABV is seeking to maximise the opportunities for “virtual

volunteering” where volunteers are encouraged to use email to develop
contacts with the clients, with whom they will be conducting their
assignments, before they depart for the assignment and to keep in
communication with the client after the completion of the assignment. This
allows for sustained assistance and follow up with the client and has proven
to be an efficient, cost effective way of enhancing sustainability and
impact.

Need to demonstrate success and quick results

ABV recognises it is a small organisation and is not in a position to drive

change at the Government level. ABV further recognises that Cambodia’s

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Country Strategy - Cambodia

urgent need is for action to produce immediate results. Thus smaller

projects focussing on bottom up development, that produce significant
outcomes even though small do contribute and provide examples and case
studies that may be copied by other parties. Although the initial impact
may be limited there may be a follow on effect. In this light ABV could
target smaller projects with SMEs rather than trying to have impact at
higher levels of Government such as in National Agricultural Marketing
policies and systems. ABV will explore opportunities to work with Ministry
of Commerce on smaller scale projects.

Gender and Development (GAD)

GAD is considered in every ABV assignment. As well as targeting issues like

violence against women and children, promotion of women's positive role in
conflict situations and peace building, enhancing women's economic
empowerment, ABV seeks to ensure that gender equity issues are
incorporated into all our activities. ABV has undertaken assignments directly
targeted at empowering and enabling women. ABV will not undertake
assignments that have a detrimental impact on women or children.

Environment

Preventing environmental degradation is essential if development is to be

sustainable in the longer term. Land degradation, deforestation and the
destruction of fisheries all directly undermine the livelihoods of the rural
poor. In urban areas, overcrowding, inadequate sanitation and pollution all
affect the health of the population and the poor are the most vulnerable.

In Cambodia the majority of all jobs depend on agriculture, forestry and

fishing and over 70% of people live in rural areas. Environmental
degradation threatens their livelihoods and the sustainability of poverty
reduction efforts.

As well as directly targeting environmental issues, ABV needs to ensure that

possible impacts on the environment are considered in the design and
implementation of all our assignments. ABV will not undertake assignments
that will have a significant detrimental impact on the environment.
Previoulsy ABV has rejected assignments in the past that we judged to have
a detrimental impact on the environment.

Identifying Synergies and Identifying Partnerships

Through in country consultations a number of partners and synergies have

already been identified. Working with these partners offers potential gains
in program impact and effectiveness. There are possible opportunities for
ABV to value add to Australia’s bilateral programs and partner with other
organisations. The agriculture sector and especially the marketing of

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Country Strategy - Cambodia

agricultural products appear to be likely opportunities since ABV has

volunteers with considerable expertise in these areas.
Since it is likely that the greatest impact of ABV’s program in Cambodia will
occur in bodies that are associated with reform and accreditation, efforts
will be made to identify and target all local organisations and offshoots that
work in the area of governance. Examples would include:
• The Cambodian Accounting Council
• Garment Manufactures Association of Cambodia (GMAC, new agencies
are being formed and provide accreditation for workers such as
seamstresses so they don’t have to pay bribes to get jobs)
• Arbitration Council for Cambodia
• Cambodian Legal Education Centre (CLEC)
• Royal School for Judges and Prosecutors
• Accreditation Council for Cambodia (for tertiary institutions)
• Council for Administrative Reform
• Technical Assistance Facility
• Apsara Authority (due to its central role in managing the Angkor Wat
tourist zone)

External Bodies as Partners

External bodies that have been identified as potential partners include:

• The Australian Industrial Relations Commission (AIRC)
• The International Monetary Fund. The IMF and ABV have been working
together in the largest program in ABV, namely the institutional
development of the Foreign Trade Bank of Cambodia. This program
has been highly effective and is playing a significant role in
strengthening the banking sector.
• The Mekong Project Development Facility (MPDF). MPDF is supported
by the World Banks private sector arm – the International Finance
Corporation and is charged with the promotion of the SME sector.
MPDF and ABV have cooperated in Cambodia on assignments at Hagar
and Norton University.
• Australian Business Association of Cambodia (ABAC) and other
business associations. ABV has worked through the ABAC to promote
its activities and conducted assignments that have contributed to
both the companies involved and the vocational skills of their staff.
• Cooperation Committee of Cambodia (CCC) the peak body for NGO’s
both local and international operating in Cambodia. Several
assignments have resulted through CCC membership and the
promotion of ABV as a resource to CCC members.

Other Volunteer Agencies

In country discussions with VSO and JICA have indicated that opportunities
for partnerships and sharing of information and possible clients for
assignments exist.

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Country Strategy - Cambodia

Discussions with CECI (managing the AYAD scheme in Cambodia) indicate

that benefits would accrue from partnerships and information sharing.

Key Government Ministries

Ministry of Commerce
Consultations were conducted with the Ministry of Commerce on the
possible assistance ABV could provide this ministry which is playing a central
role in the promotion and development of Cambodian SMEs.
Ministry of Tourism
Discussions were also held with the Ministry of Tourism in recent years
regarding ABVs possible assistance in developing national tourism plans.

Risk Assessment

A matrix for managing risks, threats, while maximising strengths and

opportunities will be developed. This matrix will set out treatments for
each risk and be reviewed and updated annually. Key risks include:

• Lack of Government with mandate in Cambodia or political instability

• Regional problems such as SARS and bird flu may make recruitment of
volunteers difficult
• Potential volunteers (or their spouses) may be scared off assignments
by travel advisory notices

6 ASSESSMENT, MONITORING AND EVALUATION

ABV uses a modified version of the AusAID/NGO Quality Framework as the
basis for its assessment, monitoring and evaluation processes. This
framework identifies the key elements of successful volunteer assignments
and ensures these benchmarks are considered when we assess and evaluate
the relevance and impact of assignments. The outcomes are evaluated
jointly by the client, volunteer, and ABV staff, while the extent to which
skills have been exchanged with local staff is done by the volunteer and
their counterpart(s).
The long term impact will be considered through an annual review of the
country strategy. Given the small size of ABV's program a form of
contribution analysis will be adopted, rather than attempting to define and
attribute impact. As such, performance at the country strategy level can be
measured by aggregating information about individual assignment outcomes
and skills exchange. This would then provide an opportunity to look for a
plausible association between this information and longer term impacts
during the periodic country strategy reviews. The information collected
through these processes, and lessons learnt, will contribute to the
formulation of a new country strategy every three to five years.

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Country Strategy - Cambodia

Annex 1: Objective Tree: ABV Cambodia Country Strategy 2004 - 2006

Overall objective:

To contribute to poverty reduction and sustainable development in Cambodia through

the transfer of skills by using volunteer expertise

Strategic Objective Strategic Objective Strategic Objective

One: Two: Three:

Strengthen the Promote the growth Support the growth of

capacity of and development of the tourism and
organisations that small and medium hospitality industry
work directly in enterprises
administrative and
financial reform and
governance

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Country Strategy - Cambodia

Strategic Objective One:

Strengthen the capacity of organisations that work directly in administrative and

financial reform and governance

Specific Objective 1.1 Specific Objective 1.2 Specific Objective 1.3 Specific Objective 1.4

Provide assistance to Provide assistance to Provide assistance to Provide institutional

banks to strengthen their
accounting and financial
management and to
expand their range of
financial services,
especially to the business
sector.
organisations and bodies
that work in areas of
accreditation, including
national bodies and
private sector bodies that
provide skills
accreditation.
organisations and strengthening to
bodies involved in national NGOs in the
resolution of labour areas of strategic
disputes. planning, and general
and financial
management.

Program Outcome 1.1.1 Program Outcome 1.2.1 Program Outcome 1.3.1 Program Outcome 1.4.1

Strengthened banking Strengthened institutional Cambodian businesses Communities assisted by

institutions offering
improved customer
service and a broader
range of financial
services
capacity and policies assisted with labour local NGOs
enabling bodies working in dispute resolution
accreditation to support
the Cambodian people

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 Country Strategy - Cambodia

Strategic Objective Two:

Promote the growth and development of small and medium enterprises

Specific Specific Specific Objective 2.3 Specific Objective Specific Specific Specific
Objective 2.1 Objective 2.2 2.4 Objective 2.5 Objective 2.6 Objective 2.7
Provide support to
Strengthen the Strengthen the educational and Collaborate with Support NGO Collaborate Provide
business technical and training institutions local partners and led initiatives with other assistance to
management, vocational (especially private other programs and to establish projects and local SMEs to
financial skills of SME and in rural areas) in initiatives (i.e. and develop partners raise
management workers curriculum and multilateral and sustainable operating in awareness of
and marketing faculty development bilateral) to business the agriculture the
skills of to improve quality improve enterprises sector to add implications of
individual education outcomes opportunities for value WTO ascension
SMEs SMEs and develop a
more pro-business
environment
Program
Outcome Program
2.3.1 Outcome
Program Program Enhanced Program Program Program Program Program 2.7.1
Outcome Outcome capacity of Outcome Outcome Outcome Outcome Outcome Enhanced
2.1.1 2.2.1 education 2.3.2 2.4.1 2.5.1 2.6.1 2.6.2 understanding
SMEs assisted Technical and and training Labour Strategies for NGO Improved Improved of
to develop vocational institutions force of improving business farming post harvest implications
their business skills of SME working in educated opportunities activities techniques processing of WTO
activities workers rural areas and skilled for SMEs operating by for selected ascension by
enhanced to provide workers implemented successfully subsistence agricultural local SMEs
education expanded in market and products
and training place commercial
farmers
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Country Strategy - Cambodia

Strategic Objective Three:

Support the growth of the tourism and hospitality industry

Specific Objective 3.1 Specific Objective 3.2 Specific Objective 3.3

Provide assistance to Collaborate with agencies Provide assistance to

hospitality and tourism
sector working groups in
Siem Reap and Phnom
Penh
working in tourism and
hospitality to deliver
needs based training to
targeted groups (such as
tour guides)
individual locally owned
hotels and tourism
agencies in hospitality,
and financial and
business management

Program Outcome Program Program Program Outcome

3.1.1 Outcome 3.2.1 Outcome 3.2.2 3.3.1

Strengthened Skills and Growth of Growth of business

hospitality and competencies of tourism agencies of individual hotels
tourism sector in people employed and tourism
Siem Reap and in tourism sector agencies
Phnom Penh enhanced

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