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Donor Activity Philipines and Cambodia

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					History of Donor Activity in the Philippines and Cambodia Don Joseph M. Medrana1

Philippines Donor activity in the Philippines dates back to the early years following independence from the Japanese occupation and American tutelage. During this period, what the Philippines needed the most were the resources to support the national recovery efforts of the newly independent state. This meant rebuilding the economic and social structures, which were damaged by the war. The US, in recognition of this need, extended food aid and economic support to the Philippines as early as 1946, making it the first aid donor of the new Republic. The US led the development assistance to the Philippines during the latter’s early years as a sovereign nation. The US focused on the development of a wide range of basic institutions and national services that the country required (USAID Philippines 2005) to strenghten the government. Most of the assistance extended to the Philippines were in the form of grants. In the succeeding decades, Japan, together with other donor agencies came in although the US remained as the Philippines’ biggest development partner. During the 1960s, donor activities focused on “community development” to help people help themselves. This shift of focus was relevant to the needs of the country during that period. It was the period when there were increasing public calls for self-governing at the local levels. The US, encouraging democratic process in the Philippines, focused its assistance on rural development, specifically on small-scale activities in agriculture, social services, and community development. The US also focused on building the capacities of the local governments in local planning and program implementation. Based on various estimates consolidated by USAID, the Philippines received a total of $1,104 million worth of official development assistance from 1952 to 1972 and $13,146 million from 1978-1988. There is a remarkable shift in the type of assistance received by the Philippines between these two periods. From 1952 to 1972, about 56% of the development assistance was in the form of grants and only 44% were loans. Meanwhile, during the period 1978-1988, around 80% of the development assistance was in the form of loans. The US, nevertheless, maintained a larger proportion of grants in both periods. Emerging from the dictatorship period which lasted from 1972 to 1985, the Philippines was in a state of economic and financial crisis. In support of the government’s priorities, donors concentrated on helping the country achieve economic stability and growth. The US concentrated on improving macroeconomic management, encouraging domestic and
1

A graduate of the University of the Philippines Los Baños with the degree Master of Public Affairs in Local Governance and Development (MPAf-LGD). Visit http://go4dev.blogspot.com for more articles.

international private sector development, and alleviating sector-specific constraints through policy-based sector assistance programming (USAID Philippines 2005). Improved health and more manageable population growth were also emphasized during this era. Today, Japan, the US, and Australia remain the Philippines’ major bilateral donors, while the World Bank and the Asian Develoment Bank are the biggest funding donors. Their development programs for the Philippines, since the recent years have focused on economic development, community development, governance, security, health, and education.

Cambodia Although it received support from the Soviet Union, Cambodia was practically isolated from external assistance throughout the 1980s by virtue of the international embargo imposed by the West during the People’s Republic of Kampuchea (PRK) years. Hence, there was widespread hunger, malnutrition and poor health. But since the signing of the Paris Agreement in 1991, the international donor community has been active in development work providing financial and technical assistance to Cambodia. By the end of 1990s, Cambodia received close to $ 2.5 billion in foreign assistance. (CDRI 2002). Much of the foreign support extended by development partners in Cambodia since 1991, were targeted towards the country’s social sectors including education and health, primarily to help Cambodians meet their basic needs in the short run. It was much like a first aid response of donors for the deprived population of Cambodia, which heavily suffered from the international aid embargo previously imposed. Aside from the provision of the basic needs, the restoration of democracy and economic growth were also given emphasis. In fact, the bulk of assistance from numerous donors in the 1990s, not only for Cambodia but for most developing countries were concentrated only on three major sectors - social infrastructures and services, general aid program, and economic infrastructures. Combined, these three sectors took up about 60% of the total aid funds of key bilateral and multilateral donors from 1990 to 1992. (see Thiele et. al. 2006). Today, Japan, France, Australia, and the United States are among the major bilateral donors of Cambodia. Currently, Japan is the country’s largest donor. Meanwhile, China provides substantial bilateral aid. Economic links between the two countries have also increased in the recent years. With substantial support from the international community, Cambodia made significant progress within the first half of the 1990s in terms of financial stability and economic recovery. However, future prospects of socioeconomic development for Cambodia depend on the country’s ability to effect reforms towards good governance, including

control of corruption, and revision of investment policies among others. The donor community recognizes this, hence has started prioritizing crucial areas such as good governance, control of corruption, local capacity building and private sector participation.

References: Cambodia Development Resource Institute (CDRI). 2002. Economy Watch – Domestic Performance. Cambodian Development Review. Cambodia: CDRI Thiele, Rainer, Peter Nunnenkamp and Axel Dreher. 2006. Sectoral Aid Priorities: Are Donors really doing their best to achieve the Millennium Development Goals?. Working Papers. No. 124. Swiss Federal Institute of Technology Zurich. United States Agency for International Development Philippines (USAID Philippines). 2005. About US AID, Historical Overview of US Assistance to the Philippines. Article posted at www.philippines.usaid.gov/. Accessed: December 2006.

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Description: This draft document summarizes the donor activity (financial and technical assistance) in Philippines and Cambodia since their independence from colonizers / emergence from war.