National Strategic Development Plan 2014-2018

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1.1. The Royal Government of Cambodia (RGC) has been successfully rebuilding Cambodia through the last two decades from a state of near total destruction. The civil war lasted nearly three decades, and an economic isolation/embargo was in force virtually since the early 1970s until 1993. Through the ‘Win-Win Policy’ of the RGC, peace was finally established in 1998 with the dismantling of the Khmer Rouge. Meanwhile, based on a national reconciliation among different erstwhile warring factions, the Paris Peace Agreement was reached in 1991, and the first general elections in 1993 followed thereafter. Inflows of Foreign Direct Investment (FDI) and Official Development Assistance (ODA) formally began since 1993. In the first decade until early 2000s, the highest priority of RGC was rebuilding the society, the economy and the infrastructure. In the second decade, the country began pursuing planned development in a market framework.
1.2. Cambodia is classified as a least-developed country (LDC) by the United Nations. Its per capita income exceeded USD 1,000 the first time in 2012. There has been a near 5- fold increase in the per capita income in the last decade or so, which is a notable achievement. In this regard, the country might be moving out of its least-developed country status in the near future.
Development Planning in Cambodia – A Recall
1.3. The Royal Government of Cambodia (RGC) outlined its long-term vision for the future in the National Program to rehabilitate and develop Cambodia (NPRD) in 1994 for initiating the process of rebuilding and rehabilitating the social, physical, and institutional infrastructure. Based on this vision, the First Five Year Socio-Economic Development Plan (SEDP I, 1996-2000) was formulated, setting clear goals to be reached by 2000. This Plan’s focus was on establishing macro-economic fundamentals, social development contours, and poverty alleviation strategies. At the same time, a 3-year rolling Public Investment Program (PIP) was evolved for 1996-1998, so that domestic and external development cooperation
resources could be channelled into priority areas for achieving the goals set out in the plan. Since then, PIPs is updated annually.
1.4. The Second Socio-Economic Development Plan (SEDP II 2001-2005) was prepared focusing on economic growth and poverty reduction. For RGC, the most formidable development challenge had been to develop the private sector as an engine of economic growth: to transform the economy, and to achieve poverty reduction (as well as improve people’s wellbeing). Following the preparation of SEDP II, there were two important developments: First, after the United Nations Millennium Summit in 2000—which declared the Millennium Development Goals (MDGs)—Cambodia developed its own set of MDGs called
the Cambodia Millennium Development Goals (CMDGs), focusing on poverty alleviation and human development. Second, a National Poverty Reduction Strategy (NPRS) was adopted in December 2002. Since that time, achieving CMDGs and alleviating poverty have assumed centrality in Cambodia’s development strategies.
Chapter I: Introduction
The Rectangular Strategy
National Strategic Development Plan 2014-2018

1.5. The Third Five-year Development Plan for 2006-2010 was formulated as an overarching national policy document for pursuing prioritized goals, targets and actions for the next five years. The new plan was renamed as National Strategic Development Plan (NSDP) 2006-2010. RGC of the Third Legislature attempted to create a favourable environment and necessary conditions, enabling Cambodia to step forward on the road for further reforms and progress. RGC adhered to the principle of national solidarity to rally its citizens from all walks of live under the motto “Nation-Religion-King” to build the nation and ensure national independence, integrity, sovereignty, peace, democracy and progress.
1.6. Following the General Elections of 2008, RGC announced a Socio-economic Policy Agenda of the RGC of the Fourth Legislature 2008-2013. With it, another plan was drawn up to replace NSDP 2006-2010 to synchronize the planning process with the political mandate. The new plan was named NSDP Update 2009-2013 and was the implementation tool for the RGC’s priority policies during the Fourth Legislature. NSDP Update 2009-2013 was launched at the time of the international financial crisis and the economic recession in advanced economies (starting in 2008-2009), resulting in a declining demand for Cambodia’s exports on the one hand, and increased macroeconomic and financial risks on the other. These (external) developments presented unexpected new challenges for Cambodia, for which RGC took systematic and sequenced measures to mitigate the negative impact of the international financial cataclysm and global economic recession. The planning methodology in NSDP Update 2009-2013 was so defined as to prepare the country for shocks and yet progress on the path to development.