A DEVELOPMENT PARTNER PERSPECTIVE

1

• A DEVELOPMENT PARTNER PERSPECTIVE
• ON
• PHASING OUT OF SALARY SUPPLEMENTATION
• Mogens Laumand Christensen
• Minister Counsellor and Danida Resident
  Representative
• Royal Danish Embassy- Danida Phnom Penh

2
EXPERIENCE OF SALARY SUPPLEMENTATION (SS)

• SS in Cambodia is a necessary evil (due to a
  very low salary by any standard)
• Inconsistency in payments across sectors is
  dysfunctional and creates unnecessary competition
  for scarce resources
• Therefore welcomed the 2005 Joint Agreement on
  Phasing out SS but
• There has been no uniform framework for
  implementation
• There are significant practical difficulties as
  our recent experience in developing MBPIs.
• At local government level NGOs use government
  officers for services and pay SS outside existing
  framework(s)

3
MBPIs UNDER THE NRML PROGRAM

• MBPI proposals have been developed in
  consultation with sectoral administrations in
  Land Management, Fisheries and Forestry
• Linkages to sectoral plans
• Merit based recruitment
• Performance assessment
• Incentive payments linked to Sub Decree 98 of
  2005
• Joint RGC/Development Partner Contribution and
  Gradual Phasing Out
• Some support for headquarters staff but longer
  term focus will be on local administration
• MoI and D and D reform when ready and how ??

4
INCONSISTENCIES IN SS PRACTICES

• The comparative table circulated today shows
  differences in practice that will create
  tensions. Inconsistencies in SS rates suggest
  that projects within a sector needs
  harmonization
• For example, in Lands, GTZ is paying local
  Cadastral staff involved in dispute resolution
  around 128 per dispute resolved WB is paying
  land registration team members an average of 250
  per month
• Danida/DFID is proposing MBPI rates for commune
  land use planning. Will the performance incentive
  proposals for new Lased program that are
  developed lead to even more differences?
• In MEF, under WB and ADB supported co-financing
  framework, supplementation is paid at rates
  between 250-100 per month but with no apparent
  linkage to performance

5
INCONSISTENCIES IN SS PRACTICES (Cont.)

• Differences in MBPI features need discussion. For
  example under the MOH proposal
• There are higher salary grades differences in
  recruitment practices provision for raising
  salary to an upper grade after one performance
  evaluation merit recruitment only below the
  Director-General level
• It is not clear if the Government will make a
  funding contribution
• Most of the focus is on supporting headquarters
  rather than progressing lower level of government

6
EXPERIENCE IN WORKING ON MBPIs WITH SECTORS

• Be aware of institutional pressures in designing
  a truly merit based selection processes (through
  committee etc)
• Selection itself may be resisted as undermining
  patronage
• Clarify the position of Secretaries of State
  
• Stress that incentives will only be payable for
  real performance
• Avoid duplication in payments to one person by
  different development partners
• Need for institutional capacity development to
  enable improved performance
• Effective MBPIs must be part of mainstream
  sectoral management
• Structure performance assessment carefully
  (Criteria, frequency, by whom, non-performance
  measures etc) and ensure fairness (with political
  interference avoided)
• Be careful of one sector setting precedents for
  another (eg interim incentive payments)

7
WHERE TO NEXT ON MBPIs?

• Must be clear on objectives in salary
  supplementation?
• What is our exit strategy?
• Currently there are real risks to coherence/
  consistency in development cooperation
• DPs need a common position on salary
  supplementation
• at the very least we need harmonization at the
  sectoral level !!
• We favor consulting on a set of MBPI principles,
  which are consistence with some sectoral
  flexibility
• A simple functional review of the institution
  is needed for MBPI
• Need to make roles of the game for NGOs to
  ensure consistency within a sector
• We need an PFM and MTFF arrangement that places
  all such funding issues, including Government
  contribution, - on the national budget !!