[{"bbox": [83, 118, 1147, 280], "category": "Text", "text": "support the Public Financial Management (PFM) Reform Program to enhance fiscal discipline, raise efficiency and transparency on budgeting and accountability, increase domestic resource mobilisation, improve allocation of financial resources for a better-quality service delivery, citizen's participation and Parliamentary oversight. The European Partners agreed to support a greater involvement of line ministries in the implementation of the reform program. Under Priority 2, European partners agreed to foster democratic participation, respect for human rights, gender equality, and support an enabling environment for civil society in Cambodia ('demand side of governance')."}, {"bbox": [86, 308, 327, 340], "category": "Section-header", "text": "## 2.2. Problem Analysis"}, {"bbox": [83, 378, 1147, 485], "category": "Text", "text": "The EU will continue to support the **Public Finance Management (PFM)** reform as part of its commitment to contribute to strengthening the governance sector and democracy in Cambodia. Improving PFM is a key objective of Cambodia's national development strategy (Rectangular Strategy IV and National Strategic Development Plan 2019-2023)."}, {"bbox": [83, 511, 1147, 725], "category": "Text", "text": "Following the completion of the PEFA assessment in June 2021 and in line with Development Partner's recommendations, the MEF has decided to extend the existing Consolidated Action Plan 2017-2020 (known as CAP 3) to also cover 2021 and 2022. This will enable to address some existing weaknesses in the PFM reform before embarking in a new Consolidated Action Plan (CAP4) that should focus in strengthening accountability systems. This decision was taken to accommodate delays accumulated due to lockdowns and in general the disruptions caused by COVID-19 and by the measures put in place in 2020 and 2021 to manage the outbreaks. The CAP 3 still focuses on a multi-year perspective on fiscal planning, implementation of programme budgeting to all line ministries and implementation of FMIS. This aims at improving the link between sector strategies and national budget allocations."}, {"bbox": [83, 750, 1147, 1007], "category": "Text", "text": "Key strategies encompassed in the CAP3 and the future CAP4 include the overarching \"Budget System Reform Strategy 2018-2025\" (BSRS). The BSRS endorses a shift from the originally planned \"performance-based budgeting\" to the more realistic \"performance-informed budgeting\"¹¹. The MEF has also developed a Public Procurement Reform Strategy 2019-2025, which runs in parallel to the Budget System Reform Strategy. Overall, the procurement reform aims at making the procurement process more competitive, efficient and transparent, and to promote the execution of public procurement through granting more extensive authorizations to the procurement implementing institutions. The MEF is also implementing the Public Investment Management Strategy 2019-2023, the Public Debt Management Strategy 2019-2023, the FMIS Phase III (2021-2025) and FMIS Change Management Strategy, the Strategic Capacity Development Plan 2021-2025 and the Revenue Mobilization Strategy 2019-2023."}, {"bbox": [83, 1024, 1147, 1223], "category": "Text", "text": "Cambodia's vulnerability to Climate Change is characterised by frequent flooding and irregular rainfall, coupled with an agrarian based economy, limited human and financial resources, insufficient physical infrastructure, and limited access to technologies. Green and resilient investment is a main part of countries' commitments under their Nationally Determined Contribution (NDC) and in line with overarching national climate strategies. Substantial public investment will be necessary to build public infrastructure that makes economies more resilient to climate change and related natural disasters. Against this backdrop, a priority for Cambodia is to manage public investments efficiently and effectively."}, {"bbox": [83, 1241, 1147, 1497], "category": "Text", "text": "While in principle strengthening integration of gender equality objectives into budget processes and documentation is well aligned to PFMRP objectives, and there is a commitment from the Cambodian government to improve gender-responsive budgeting (GRB), GRB has not explicitly been integrated into its latest \"Budget System Reform Strategy (2018-2025) yet. The CAP3 included a reference to \"highlight poverty reduction and gender issues in Programme Budgeting & Budget Strategic Plans (BSP)\". However, in the recent March 2021 update establishing (\"CAP3+2\") this reference has been deleted. As part of the policy dialogue in the context of this action the EU will seek to ensure that future PFM reform strategies, and in particular the CAP4, make clear references to the importance of Gender Responsive Budgeting (GRB) and to use PFM policy and tools to ensure gender equality and the empowerment of women and girls."}, {"bbox": [83, 1515, 1147, 1572], "category": "Text", "text": "The FMIS project is a building block of the whole-of-government digital policy in Cambodia. The FMIS is seen as an important part of the future digital Government architecture."}, {"bbox": [72, 1619, 1111, 1665], "category": "Footnote", "text": "¹¹With performance-informed budgeting, resources are not *directly* related to performance, as was envisaged in the previous budget reform strategy, but performance information is used in the budget allocation process."}, {"bbox": [1051, 1663, 1157, 1687], "category": "Page-footer", "text": "Page 6 of 31"}]