[{"bbox": [83, 118, 1146, 252], "category": "Text", "text": "Cambodia, still a Least Developed Country (LDC) and, since 2015, a lower middle-income country (LMIC), has been one of the most dynamic economies in the Asia-Pacific region between 2000 and 2018, achieving 7% yearly economic growth on average. Covid-19 has hit Cambodia hard, with the GDP contracting by 3.1% in 2020, followed by a recovery with GDP growth of 3.1% in 2021. Real GDP growth is projected to reach 4.5/5.1% in 2022 and to gradually recover to reach 6.5% on average."}, {"bbox": [83, 277, 1146, 437], "category": "Text", "text": "In February 2020, due to serious and systematic concerns related to human rights in the country, the European Commission took a decision to partially withdraw the trade preferences under the Everything But Arms (EBA) scheme for Cambodia, which had sustained growth and job creation during the past years. Enhanced engagement with the Cambodian government remains critical for the EU to promote a sustainable and more equitable economic recovery and to use available avenues of policy dialogue with the government to promote democracy and human rights."}, {"bbox": [83, 462, 1146, 597], "category": "Text", "text": "In recent years, China has increasingly established more influence in Cambodia, providing now almost a quarter of total FDI under its Belt and Road Initiative. The country is aware of the risks of overdependence on China and realises the advantages of an integrated ASEAN, and the EU market and expertise remain attractive both for the government, civil society at large and the private sector. While working with Cambodia on its socio-economic recovery, there are good entry points for the EU to ensure impact and promote its interests and values."}, {"bbox": [83, 616, 1146, 695], "category": "Text", "text": "EU's engagement in PFM is a building-block for all the priority areas of the MIP and for delivering the Team Europe Initiatives (TEIs): \"Sustainable landscapes, forests and agriculture\" and \"Build back better – green energy and industrial value chains\"."}, {"bbox": [83, 721, 1146, 856], "category": "Text", "text": "Nurturing the partnership with the Ministry of Economy and Finance (MEF) is a crucial entry point for broader dialogue with Government in the political context and it is strategically useful to the MIP's overall objectives. The EU will be able to engage with MEF on reforms of strategic value, including in sensitive areas such as public investment management, public procurement, budget transparency, equitable taxation and climate change. PFM reforms strengthen the rule of law, reduce corruption, and reinforce accountability to the citizens."}, {"bbox": [83, 881, 1146, 1306], "category": "Text", "text": "Under the MIP 2021-2027 the EU committed to support the Government and Civil Society (Sector 1 of the MIP) and to continue contributing to some of the key aspects to strengthen the governance sector and democracy in Cambodia. As a priority, the EU will continue to work with Cambodia in support of the Public Finance Management (PFM) reform (SDGs 16 and 17), that, since the launch of Stage 1 of the PFM reform in 2005, has led to significant improvement in revenue mobilisation, better alignment of expenditure with national priorities, availability of financial information for timely decisions and increasing accountability and transparency. Moreover, PFM improvements have led to increased budget credibility and predictability, which has been instrumental to restore macroeconomic stability and resilience to external economic shocks, which in turn has greatly supported economic growth and enabled a rapid response by the government to the COVID-19 crisis. Future priorities under PFM will include revenue administration, streamlining and standardization of internal controls, strengthening public procurement and public investment management, as well as the development of accountability systems. An effective PFM Reform Programme is also key for the EU continuing sector budget programmes. To ensure that the progress in PFM is further strengthened, it is important to improve efficiency of the public administration. The MIP 2021-2027 has allocated an additional EUR 37 million to reforms in Governance, including support to Public Finance Management Reform (PFMR) is to improve efficiency, transparency and accountability in management of public funds to improve public service delivery. The MIP also includes measures in favour of civil society."}, {"bbox": [83, 1332, 1146, 1387], "category": "Text", "text": "Despite some progress, gender inequalities and gaps are still high in Cambodian politics and decision-making circles, the formal economy, and in upper secondary and tertiary education."}, {"bbox": [83, 1411, 1146, 1518], "category": "Text", "text": "Every stage of the PFM reform corresponds to a Consolidated Action Plan (CAP) to which Development Partners refer as the Government-owned master plan. The ongoing (CAP3) is expected to end in 2022. The following phase of the reform (post 2022), to be launched in 2023 (CAP4), will be defined by the MEF on the basis of the Public Expenditure and Financial Accountability (PEFA) assessment finalised in June 2021."}, {"bbox": [83, 1529, 1146, 1637], "category": "Text", "text": "The Action will contribute to the implementation of the Joint European Development Cooperation Strategy for Cambodia 2021-2027, notably Priority 1 \"strengthen democratic accountability, integrity and effectiveness of Cambodia's public institutions, systems and services at all levels ('supply side of governance'), with particular focus on major governance reform programmes, including corruption\". Under Priority 1, the European partners agreed to"}, {"bbox": [1051, 1663, 1157, 1687], "category": "Page-footer", "text": "Page 5 of 31"}]