KINGDOM OF CAMBODIA NATION RELIGION KING

MINISTRY OF COMMERCE

Enhanced Integrated Framework (EIF)

PROJECT TITLE: PROJECT DURATION: TOTAL BUDGET (EIF):

Cambodia Export Diversification and Expansion Program (CEDEP) Part I: Milled Rice, High Value Silk and Evaluation Function Component 3 years (July, 1st, 2012 to June 30th, 2015) US$2,407,714 (excluding other sponsors contributions)

Enhanced Integrated Framework

CEDEP I

MID-TERM EVALUATION REPORT

(October – November 2014)

EVALUATION TEAM: 1. Ms. Céline Bacrot/Lead International Evaluation Consultant 2. Mr. Yim KimChhean/National Evaluation Consultant

SUBMISSION DATE: November 26, 2014, Phnom Penh, Cambodia

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LIST OF ACRONYMS AND ABBREVIATIONS AFD Agence Française de Développement AfT Aid for Trade ARPEC Alliance of Rice Producers & Exporters of Cambodia CARDI Cambodia Agricultural Research and Development Institute CEDEP Cambodia Export Diversification and Expansion Programme C/O Certificate of Origin CREA Cambodian Rice Exporters Association CRF Cambodia Rice Federation CTIS Cambodia Trade Integration Strategy DAC Development Assistance Committee DICO Department of International Cooperation DIPR Department of Intellectual Property Rights DP Development Partners EU European Union EIF Enhanced Integrated Framework EPWG Export Promotion Working Group ES Executive Secretariat FASMEC Federation of Associations for SMEs of Cambodia FCRE Federation of Cambodian Rice Exporters FGD Focus Group Discussion G-PSF Government-Private Sector Forum HACCP Hazard Analysis Critical Control Point HU Highly Unsatisfactory HS Highly Satisfactory IC Implementation Committee IF Integrated Framework IFC International Finance Corporation IPR Intellectual Property Rights ITC International Trade Center ISC Institute of Standards of Cambodia KPI Key Performance Indicator LDCs Least-Developed Countries LO Liaison Officer Logframe Logical Framework M&E Monitoring and Evaluation MAFF Ministry of Agriculture, Forestry and Fisheries MDTF Multi-Donor Trust Fund MDGs Millennium Development Goals MEF Ministry of Economy and Finance MIE Main Implementing Entity MIME Ministry of Industry, Mining and Energy MoC Ministry of Commerce MoU Memorandum of Understanding MoIH Ministry Industry and Handicraft MoWA Ministry of Women’s Affairs MTE Mid-Term Evaluation MRD Ministry of Rural Development MS Moderately Satisfactory NIA National Implementation Arrangements NIU National Implementation Unit NSB National Silk Board

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NSDP National Strategic Development Plan POC Priority Operating Cost PSC Program Steering Committee UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNIDO United Nations Industrial Development Programme UNOPS United Nations Office for Project Services VC Value Chain RGC Royal Government of Cambodia RBM Results-Based Management RSTWG Rice Standards Technical Working Group SME Small and Medium Enterprise RSSP Cambodia Rice Sector Support Project SSC.TD-TRI/SSC Sub Steering Committee on Trade Development and Trade-Related

Investment SPS Sanitary and Phyto-Sanitary SWAp Sector-Wide Approach TA Technical Assistance TAC-2 Tier 2 Appraisal Committee TBT Technical Barriers to Trade TDSP Trade Development Support Programme TRTA Trade Related Technical Assistance TFM Trust Fund Manager ToR Terms of Reference TPR Trade Policy Review TRTA Trade-Related Technical Assistance TWG Technical Working Group WB World Bank WTO World Trade Organization

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Table of Contents LIST OF ACRONYMS AND ABBREVIATIONS ............................................................................................................ 2!

TABLE OF CONTENTS ..................................................................................................................................................... 4!

ACKNOWLEDGEMENTS ................................................................................................................................................. 6!

EXECUTIVE SUMMARY ................................................................................................................................................. 7!

Evaluation criterion ................................................................................................................... 13!Recommendations ...................................................................................................................... 13!Relevance ................................................................................................................................... 13!Efficiency .................................................................................................................................... 13!Effectiveness ............................................................................................................................... 15!Potential Impact ......................................................................................................................... 15!Sustainability .............................................................................................................................. 16!

1.! INTRODUCTION AND BACKGROUND ............................................................................................................... 17!

1.1! PURPOSE OF THE EVALUATION ................................................................................................... 23!1.2! SCOPE OF THE MTE ................................................................................................................... 23!1.3! APPROACH AND METHODOLOGY ............................................................................................... 23!

1.3.1! Desk Review .................................................................................................................... 24!1.3.2! In-Country Visit ............................................................................................................... 24!1.3.3! Information Collection Methods ..................................................................................... 24!1.3.4! Participation of MIE Staff ............................................................................................... 24!1.3.5! Presentation of Draft Findings and Results .................................................................... 24!

1.4! STRUCTURE OF THE EVALUATION REPORT ................................................................................. 25!2.! FINDINGS OF EVALUATION ................................................................................................................................ 26!

2.1.! PROJECT MANAGEMENT AND IMPLEMENTATION ....................................................................... 26!2.1.1! Project Document and Logframe .................................................................................... 26!2.1.2! Project Concept/Design .................................................................................................. 26!2.1.3! EIF Management Arrangement and Memorandum of Understanding ........................... 27!2.1.4! Implementation of the CEDEP I Components ................................................................. 29!2.1.5! Monitoring and Evaluation ............................................................................................. 35!

2.2.! PRESENTATION OF RESULTS ....................................................................................................... 36!2.2.1.! Component 1: Milled Rice ............................................................................................... 36!2.2.2.! Component 2: High Value Silk ........................................................................................ 37!2.2.3.! Component 3: Evaluation Function ................................................................................ 39!2.2.4.! Updated Logframe with achieved results as of the MTE ................................................ 40!

2.3.! EVALUATION CRITERIA .............................................................................................................. 40!2.3.1! Relevance ......................................................................................................................... 40!2.3.2! Efficiency ......................................................................................................................... 40!2.3.3! Effectiveness .................................................................................................................... 41!2.3.4! Potential Impact .............................................................................................................. 42!2.3.5! Sustainability ................................................................................................................... 43!2.3.6. CEDEP I Contribution to Trade SWAp Roadmap .............................................................. 44!2.3.7. Linkages between the CEDEP I and the other Trade-related projects ................................ 45!

3.! CHALLENGES AND LESSONS LEARNT ............................................................................................................. 45!

3.1! CHALLENGES ............................................................................................................................. 45!3.2! LESSONS LEARNT ....................................................................................................................... 49!4.! CONCLUSIONS AND RECOMMENDATIONS .................................................................................................... 49!

Relevance ................................................................................................................................... 50!

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Efficiency .................................................................................................................................... 50!Effectiveness ............................................................................................................................... 51!Potential Impact ......................................................................................................................... 52!Sustainability .............................................................................................................................. 52!

ANNEXES: ........................................................................................................................................................................ 54!

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ACKNOWLEDGEMENTS The CEDEP I Mid-Term Evaluation Team is grateful to all the stakeholders, particularly the rice millers and silk exporters, who contributed to the evaluation process. The evaluation process took place between September 25, 2014 and October 31, 2014. The team would also like to acknowledge the active support and commitment of the NIU CEDEP I Project Team and EIF Focal Point.

The Evaluation Team is pleased to note the transparent process in which NIU encouraged the evaluation to take place. Questions, that at times were difficult to answer, particularly with respect to activities that had limited success, were answered with clarity, honesty and acknowledgement of difficulties in the implementation. It was clear to the Evaluation Team that the CEDEP I being the flagship project of the EIF portfolio, it was critical to MoC Senior Management that a thorough and probing evaluation was needed, which in turn would hopefully clearly identify good practices, gaps and challenges as well as inform future programs and strategies for implementation.

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EXECUTIVE SUMMARY The Royal Government of Cambodia (RGC) has established a Trade Sector-Wide Approach, (Trade SWAp) under the leadership of the Ministry of Commerce (MoC), to better manage and coordinate the use and implementation of its Aid for Trade. Trade SWAp has three main strategic “Pillars.” Pillar 2 focuses on strengthening the export supply capacity of 19 potential sectors.

Within this framework, the Cambodia Export Diversification and Expansion Program (CEDEP I), which is funded by the Enhanced Integrated Framework (EIF) Trust Fund, aims at strengthening and diversifying export supply capacity in selected Pillar 2 sectors: High Value Silk and Milled Rice. The program also includes an Evaluation Function Component intended, in part, to strengthen the capacity of the Department of International Cooperation (DICO), within the MoC, to monitor and evaluate substantive progress of Cambodia’s Trade SWAp. CEDEP I was approved by the EIF Board on 6 August 2012.

The purpose of the MTE was to “review project performance in order to provide greater insight into the CEDEP I implementation operations and enable efficient and cost effective project delivery and management. The mid-term evaluation will also help to identify obstacles to performance, provide justification for the 2nd phase of the project (2014-2016) and provide information for the EIF global program level evaluation.” The evaluation team consisted of Ms. Céline Bacrot, Lead International Evaluation Consultant and Yim KimChhean, National Evaluation Consultant. The evaluation was carried out over the period from the 24th of September 2014 to the 31st of October 2014. It included field trips to visit the project sites. The scope of evaluation covered three elements: the project implementation, the results achieved at Mid-Term and the recommendations for the next phase. The evaluation is based on the OECD criteria to measure the project achievements: Relevance; Effectiveness; Efficiency; Sustainability; and Potential Impact. Evaluation of project implementation The implementation of the CEDEP I has been undertaken by three Main Implementing Agencies which signed separate MoU with the EIF Trust Fund Manager as follows:

- The International Finance Corporation (IFC/The World Bank Group) is responsible for the implementation of the component on exports of milled rice; The MoU between the EIF TFM and IFC was signed on December 14th, 2012.

- The International Trade Centre (ITC) (UNCTAD/WTO) is responsible for the implementation of the component on export of high-value silk; The Implementation Letter between the EIF TFM and ITC was signed on September 25th, 2012.

- The MoC/DICO is responsible for the Evaluation Function component. The MoU between the EIF TFM and MoC/DICO was signed on October 25th, 2012 and amended on August 14th, 2014.

The level of implementation depends largely on the nature of the activities. The Product and Market development activities have been completed or are ongoing while the activities related to the institutional environment have been delayed or have not started yet impacting on the achievement

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of the project results. Below is the status of implementation of the three components by outcome and output: Component 1 on Export of Milled Rice:

Activities Status (June 30, 2014)

Outcome #1: The Enabling Environment for the Cambodian Private Sector to meet the Government’s targets for Milled Rice exports is enhanced and sustained through the creation of an Association of Rice Exporters and enhanced G-PS dialogue on Rice exports in G-PSF or other venues

Completed

Output 1: Technical working groups are organized among rice millers and exporters as a precursor to the association

Completed

Output 2: Updated mapping of milled rice value chain (based on mapping in Rice Policy) (to be done jointly with MoC Value Chain Unit and other stakeholders)

On going

Output 3: Functioning association is created and registered Completed

Output 4: Mechanism(s) for regular consultation between Government and Rice exporters on milled rice exports is (are) established through G-PSF or other venue and utilized.

Completed

Outcome# 2: Cambodian Rice Millers are successful in identifying several new major import market opportunities (in addition to EU and Russia)

On going

Output 1: Market Potential Analyses/Trade information developed for five new markets (to be done jointly with MoC Value Chain Unit)

On going

Output 2: Manual on export procedures/ trade facilitation issues for milled rice produced On going

Output 3: Manual on SPS standards and certification requirements for milled rice produced On going

Output 4: Develop and publish Cambodian Rice Portfolio Catalogue Completed

Output 5: Three new potential markets have been visited by groups of export-ready and exporting rice millers

On going

Output 6: Export-ready and exporting rice millers have participated in 4 key rice trade fairs and buyer-seller meetings (actual timing depends on event calendar)

Completed

Output 7: 8 Rice Millers become HACCP certified with support from project On going

Outcome #3: Cambodian Rice Millers are successful in clinching and completing export contracts by meeting quantities, quality, and price requested by importers, especially with respect to fragrant rice which is developed as the leading Cambodian rice brand.

On going

Output 1: Establish a Cambodian fragrant rice brand for an export quality type of milled fragrant rice competing with Thai fragrant rice and responding to expectations of import markets.

On going

Output 2: Promote Cambodian fragrant rice brand. On going

Component 2 on Exports of High Value Silk:

Activities Status (July 31, 2014)

Outcome #1: Market Development Completed Output 1.1: Export potential and key export markets for high value silk products identified Completed Output 1.2: Marketing capacities of selected exporters strengthened and export marketing strategies elaborated

Completed

Output 1.3: Exporters actively investigate foreign markets On going Outcome #2: Product Development Completed Output 2.1: Skills of male and female exporters in product innovation and design development strengthened

Completed

Output 2.2: Improved vertical integration of silk value chain and enhanced technical skills of On going

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weaving communities to enable production of high quality silk products in larger quantities Output 2.3: Quality and traceability of silk yarn imports ensure Completed

Outcome #3:Silk Sector Coordination and Strategy Not completed Output 3.1: Silk Board and Silk Secretariat have been created. Working groups of stakeholders have been formed around key silk sector development issues

On going

Output 3.2: Silk Sector Strategy and Plan of Action incorporating gender related considerations developed with stakeholders

Not completed

Output 3.3: Effective implementation management and monitoring framework established Not completed Component 3 on Evaluation Function and Organization of Core Teams

Activities Status (Sept. 30, 2014)

Outcome #1: Strengthen the NIU’s capacity to monitor and evaluate progress made under Trade SWAp, including evaluating impacts and results of technical assistance

Not completed

Output #1: A mid-term independent evaluation of the Tier 2 project is organized and carried out Completed

Output #2: A final independent evaluation of the Tier 2 project is organized and carried out Not completed

Outcome #2: Strengthening the NIU’s capacity to disseminate progress and results of technical assistance under Trade SWAp

Not completed

Output #1: Findings of project results and impacts are explained and disseminated once a year through five regional workshops

Not completed

Output #2: Findings from evaluations (mid-term and final) are published and disseminated within Cambodia and to the international community

Not completed

Project findings per evaluation criterion Relevance The overall objective of the CEDEP I is to strengthen and diversify export supply capacity in milled rice and high-value silk sectors and enhance the capacity of DICO at the MoC to monitor and evaluate substantive progress of Cambodia’s Trade SWAp. As stated in the CEDEP I Project Document1, “both sector components will put a strong focus on growth of exports through diversification including development of products and services that move the sector up its value chain and allow it to penetrate new import markets.” The three CEDEP I components are relevant to the project objectives since the activities as per the logframe and project document are focused on strengthening the supply capacity of rice millers and silk exporters and setting up the enabling institutional environment at sector level with the view to exporting milled rice and high value silk to new import markets and enhance the evaluation capacity of MoC/DICO. In terms of its relevance to the project is deemed to have been Highly Satisfactory. Efficiency The project can be considered efficient for some outcomes of the components (outcomes 2 and 3 of the Component 1, outcomes 1 and 2 of the component 2). However, the entire project cannot be defined as efficient since it seems unlikely that all the activities will be achieved as per the implementation schedule.

The delays in the establishment of the National Silk Board have been a major concern for the rolling out of the remaining activities, such as the formulation of the National Silk Strategy, under

1 EIF CEDEP I Project Document, p7

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the outcome 3 of the High Value Silk Component. This delay leads to a lack of vision and long-term planning of the silk sector. The newly created institution, the Cambodia Rice Federation, is also delaying the implementation of some activities under the outcome 1 of the Milled Rice Component mainly in regard to the coordination of the rice sector governance and the decision making process regarding issues affecting the sector (seeds, access to capital, etc.). The CRF still requires a number of capacity building activities to be fully operational and respond to the priorities of the sector. The component 3 on the Evaluation Function required a longer period than expected to be started due to a change in the operational structure of the component. Delays affected the operationalization of the core teams and the abolishment of the POC mechanism led to the amendment of the MoU between the TFM and the MOC on the Evaluation Function in August 2014. All these factors have affected the efficiency of the component as well as the monitoring and evaluation function of the progress and results achieved by the two other components. Last, the financial summary shows disparities in the disbursement rates reflecting the level of implementation for each component. IFC has a disbursement rate of 58%, ITC of 85% and the Component 3 under the MoC/DICO of 2,35%2.

Therefore, the project cannot be considered efficient in its entirety and it is unlikely that all the activities will be implemented at the completion of the project. Yet some other activities have already been implemented and completed as per the implementation schedule. The project can be considered to be Satisfactory in terms of efficiency. Effectiveness The project achieved great results under the outcomes related to export market and product development for both components 1 and 2. Under the Milled Rice Component, progress achieved meet the targets for both national rice export and the export deals directly generated by the project. The volume of rice export deals facilitated is 66,490 tons for a target of 81,000 tons and the value of rice export deals concluded and facilitated by IFC amounted $43,411,335 of which 50% are fragrant rice deals for a target of $48,762,000. Under the High Value Silk component, the increase in growth profits is about 20-30 % for the silk exporters met during the MTE. The attendance to international events and the trainings sessions increased the recognition of the quality of the Cambodian silk which led to the conclusion of deals with many international companies in new import markets.

However, implementation of activities related to the institutional framework in both sectors, namely rice and silk, as well as the component 3 on the Evaluation function with the organization of the core teams is not effective and most of the activities are to be undertaken during the next phase of the project so as to achieve the expected results. The achievement of its objective and outcomes by project is considered Satisfactory. Potential Impact The anticipated impact of the project in terms of poverty reduction and job creation but also the reduction of the country’s vulnerability to possible future external shocks was to be tremendous, especially taking into account both Components 1 and 2. This is consistent with Cambodia’s MDGs and the Trade SWAp Goals 1, 2 and 3 as formulated in the Trade SWAp Pillars Road Maps. Based on the Effectiveness criterion, the target results have been achieved as regards product and market development translated into an increase in export volume and income growth. Therefore, the project can be considered to have a positive impact on the two sectors.

2 See Annex 5 of the present document.

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Yet, the logframe was designed with a focus on trade indicators and not human development indicators which prevents the assessment of the impact on poverty reduction and job creation as well as the country’ economic vulnerability. Targets with KPIs should have been clearly defined at project design in order to integrate these objectives. The impact of the project on Government-Private Sector dialogue and the setting up of enabling institutional environment with an enhanced capacity of the Government to monitor and lead the implementation of a favourable investment climate is still to be proven remaining time of the project since the related activities have not been all implemented yet. The project is Satisfactory in terms of potential impact. Sustainability Sustainability can only be achieved if all the prerequisites of trade development are in place. Indeed, the trade performance can be sustained only if the appropriate institutional environment is in place to facilitate business climate and encourage investment by adopting the right policies and regulations. The CEDEP I is aimed at contributing to the implementation of the long-term objectives as stated in the RGC’s report for the Cambodia’s 2011 Trade Policy Review (TPR) Meeting: “Cambodia has successfully met the challenges presented by the 2008-2009 world economic crisis. However, events since 2008 clearly show the extent of Cambodia’s exposure to external shocks. […] In the period ahead, the Royal Government will be striving to deepen Cambodia’s integration into the world and regional trading systems. At the same time, the economy’s exposure to negative shocks transmitted through this system must be reduced. The diversification of exports products and export markets is the key to accomplishing this goal.”3 Against this long-term goal, the project is not sustainable as it is. The absence of a supervisory entity in the silk sector and the weak capacity of coordination and leadership in the rice sector may affect the decision making process towards the national long-term goal. At project level, sustainability is also at stake for the institutional components since the results achieved may not be sustained if the institutional framework does not help contribute to a long-term process. Indeed, these results should be spread at sector level and multiplied with more development and investment through a participatory approach and a favorable business climate. The project’s targeted beneficiaries represent a small portion of the sector, particularly for the High Value Silk component working with 14 beneficiaries only. In Cambodia, the silk weaving industry is composed of 20,000 workers, mostly women. Therefore, in order to disseminate the progress achieved with the project at sector level, a regulatory framework is required to pursue a top-down approach where silk exporters could contribute to the development of the communities so as to reinforce the sectors’ value chain. ITC has started implementing actions to disseminate the benefits of the projects beyond the 14 silk exporters in order to include the whole sector.

For the Milled Rice Component, the results are positive and can help increase the capacity of the country in resisting to external shocks. Indeed, the number of countries importing Cambodia milled rice rose from 30 at the beginning of the project to 74 markets as of July 2014 illustrating the market diversification achievement.

On the Government side, the delays in setting up of the Evaluation function component may affect the way the Government will benefit from the increase knowledge and expertise acquired during the project. The MoC/DICO should put in strong efforts during the remaining project time to make up for the delays.

3 WT/TPR/G/253, Page 7, para. 16, November 2011

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As such, the project is Unsatisfactory in terms of sustainability of the project if no major action is taken as regard the setting up of the Cambodia Silk Board, the strengthening of the Cambodian Rice Federation and the full operationalization of the core teams in the implementation of the CEDEP I sub-components.

Conclusions and Recommendations The CEDEP I project is very positive in terms of results achieved under the export market and product development for both rice and silk components. The results show the potential of these two growing sectors in a difficult environment at national level with high trade costs and at international level with a strong competition from the neighboring countries. The results achieved should, thus, be praised and sustained during the second half of the project. This would be possible only if efforts are made in building a strong institutional framework to accompany the exporters in their export strategy and to facilitate coordination and strategic guidance at sector level.

The constraints faced by the Cambodian economy in the rice and silk sectors should define the market strategy to be pursued. Indeed, the comparative advantage of Cambodia lies in the definition of high-end niche markets of small scale based on quality and consistency of their export products (fragrant rice and high value silk). This is the strength of the Cambodian silk and rice sectors, therefore the project should help contribute to this objective. The component 3 on the Evaluation Function should provide the necessary strategic support by encouraging results mainstreaming within the Government and this, through the Core Teams, and by evaluating progress achieved.

As a conclusion, the MTE recommends a time extension for a period of one (1) year for each component in order to complete the expected results subject to satisfactory performance and availability of funds. As regard funding extension, each component will have to be assessed at the time of the request and the results achieved since the MTE. In the case of ITC, a project extension would require an increase of project coordination resources both for ITC and the MoC to manage project outcome 3 beyond September 2015 and additional funding sources would therefore be required. It should particularly highlighted that, should the project duration be extended, there would therefore be a need for additional management/coordination budget. Project implementation would be limited to only one outcome (outcome 3) after September 2015 while direct support to businesses and weavers would not be able to continue since financial resources for outcomes 1 and 2 would have been exhausted. Additional funding sources for company and weaver support would therefore be required.

Below is the table of recommendations per evaluation criterion. The recommendations stem from the analysis of the results of the present MTE. They are aimed at ensuring that the objectives and impact of the CEDEP I are achieved at the completion date. They are also the expression of the needs and suggestions made by the stakeholders during the MTE, be them MIEs, Government agencies, development partners, and last, the beneficiaries of the CEDEP I project.

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Evaluation criterion

Recommendations

Relevance Continue maximizing consistency with existing and future laws, frameworks, regulations and policies. Responsible entity: CEDEP I MIEs.

Consider introducing some pertinent activities related to export growth through diversification including development of products and services that have been identified as priority sectors (19 products) by the RGC. By doing this, project will increase opportunities to access funding from development partners which encourage coordination and synergy with the Trade SWAp and AfT. Responsible entity: CEDEP I MIEs. Take into account as much as possible the national and international context in the results achieved to reflect the trade costs (production and exports costs) and technical barriers to trade by including problems and challenges in terms of costs, tariffs and regional integration regulation harmonization. Responsible entity: CEDEP I MIEs.

Adjust the target indicators and KPIs in view with a high-end niche market focusing on quality and consistency as compared to large-scale market that Cambodia cannot supply. Responsible entity: CEDEP I MIEs.

Efficiency It is crucial that the sub-decree on the National Silk Board roles and responsibilities is approved and implemented as soon as possible. Advocate for the implementation of the outcome 3 of the High Value Silk Component with the establishment of the National Silk Board as a prerequisite. Responsible entity: RGC and ITC.

Reinforce the capacity of the DICO M&E unit in charge of the CEDEP I so as to deliver the expected outputs. Responsible entity: DICO.

Disseminate the key findings of the MTE once approved by the EIF ES and the MIEs. Responsible entity: DICO.

Update the logframe and implementation schedule in order to align with the new situation for the three components. Responsible entity: MIEs, the Core Teams and the Private Sector. Organize meetings with the Core teams and MIEs to inform the Core Teams’ members of the change of mandate and activities due to the signature of an amended MoU and define an action plan to be undertaken by both MIEs and Core Teams together. Responsible entity: CEDEP I MIEs and Core Teams.

Reinforce the coordination by setting up regular meetings between MIEs in order to discuss progress achieved and issues that could arise during the project implementation. Responsible entity: CEDEP I MIEs.

Explore the options and opportunities for IFC to sign a MoU with the CRF. Responsible entity: IFC and CRF.

Optimize the funding use under the Milled Rice and High Value Silk Components so

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Evaluation criterion

Recommendations

as to achieve full completion of the activities with the remaining funding until the due date (excluding the possibility of the time extension). This is in the context of the high disbursement rate (85%) for ITC as of July 2014 and the closing of the EU-SME project undertaken by IFC end 2014. Responsible entity: IFC and ITC.

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Evaluation criterion

Recommendations

Effectiveness Develop a follow-up approach in the negotiations of rice deals by providing more technical market inputs, particularly towards the Asian market. This should comprise like technical notes on specific markets and business guides so as to help rice exporters in finalizing deals4. Responsible entity: IFC.

Facilitate deals in negotiating quotas or to use quotas attributed to Cambodia (ex. Chinese quotas) more fully in order to reduce the pressure from the competition with the Vietnam and Thailand markets. Responsible entity: CRF.

Reinforce capacity building activities to enhance skills of the rice and silk exporters so as to avoid delays in the implementation of technical activities such as certification or export administrative procedures. Responsible entity: IFC and ITC. Reinforce the dialogue between the Government and the Private sector by using more frequently the G-PS working groups. In order to achieve effectiveness, an action plan should be formulated for each group taking into account the results achieved under the CEDEP I. Responsible entity: RGC and Private Sector.

Promote Cambodian brand image and products. Responsible entity: RGC and Private Sector.

Cooperate with Government stakeholders (G-PSF) and help identify the best approaches /practices in policy formulation through proactive advocacy for strong institutional structures. Responsible entity: RGC and Private Sector. Organize and structure the private sector from within in order to defend Cambodian interests (syndicated bank loans, trade quotas, etc.) and increased competitiveness. This should be done by and for the private sector to better negotiate business deals and loans. Responsible entity: Private Sector

Potential Impact

Continue negotiating for more favorable duty-free import regime for silk yarn imports since 99% are imported from Vietnam. Responsible entity: RGC, ITC and Private Sector. Identify human development indicators and KPIs so as to measure the impact of the project on poverty reduction, job creation and country’s economic vulnerability5. Responsible entity: MIEs Expand the number of beneficiaries (though it is already above the initial number planned in the project document (which was 8 to 12)) under the High Value Silk Component so as to impact the whole sector. Some actions have already been taken by ITC to reach more silk workers, though there would be a risk of losing focus if the scope of interventions under this project would be broaden, given funding constraints.

4 This was a request from the rice exporters met during the MTE. 5 An end-of-project impact survey is part of the High Value Silk Component workplan and will be conducted in 2015. ITC will make sure human development indicators are integrated into the survey.

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Evaluation criterion

Recommendations

Responsible entity: ITC. Expand the scope of activities under the High Value Silk Component to tackle issues such as access to credit and supply capacity. Responsible entity: ITC. Ensure a smooth transition from informal to formal status in the silk sector so as to enhance the silk value chain and further protect the silk workers and businesses. Responsible entity: RGC with the support of ITC.

Sustainability Develop efforts and invest in long-term infrastructure to sustain economic growth and fulfill the potential of growing markets such as rice and silk. Responsible entity: the RGC. Support the establishment of the National Silk Board and, if possible, before the end of the year 2014 so as to avoid too many delays in the implementation of the outcome 3 of the High Value Silk Component. Responsible entity: the RGC and ITC. Strengthen the Cambodia Rice Federation through capacity building activities so as to ensure a quick operationalization of its mandates and functions. Responsible entity: the RGC, IFC and Private Sector. Sustain the good results of the Milled Rice Component by coordinating between IFC and the CRF in the implementation of the logframe so as to ensure smooth transition in the transfer of responsibilities. Responsible entity: IFC and CRF. Invest time and efforts in the Evaluation function within DICO so as to make up for delays, mainstream and disseminate the expertise and knowledge generated since the beginning of the CEDEP I in the rice and silk components. Responsible entity: DICO and Core Teams. Ensure sustainability by starting planning for funding and follow-up projects in rice and silk6 sectors taking into account the closing EU/RSSP end 2014 and the TDSP in 2016 and the implementation schedule of the CTIS 2014-2018 and trade SWAp Roadmap. Responsible entity: MIEs.

6 ITC has already been planning for and exploring ways to provide continued support to companies, weavers and the sector beyond the project end. This includes for instance:

- Support to Cambodian companies and weavers to develop their skills and access to the niche ethical fashion market, as part of ITC global Ethical Fashion Programme;

- Support to Cambodian women silk exporters, designers and weavers to develop their products and sales internationally as part of the ITC global Women and Trade Programme;

- The project is also in the process of exploring the possibility to partner with the Cambodia Women Entrepreneurs Association (CWEA), to encourage and support the growth of women-owned silk businesses in Cambodia, to potentially get further support, ensure results are sustainable and some type of support can last for the benefit of women entrepreneurs, especially after the project end.

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1. INTRODUCTION AND BACKGROUND The Royal Government of Cambodia (RGC) completed a Cambodian Trade Integration Study (CTIS) in 2007 which reviewed developments in key trade-related policies, including tariff and other restrictions, trade facilitation, legal reform, Technical Barriers to Trade (TBT) and Sanitary and Phyto-Sanitary (SPS) measures, Intellectual Property Rights (IPR), and investment promotion, as well as the global environment for Cambodia. As a result of this, the RGC has started to develop a Trade Sector Wide Approach (Trade SWAp) led by the Ministry of Commerce (MoC) in view of coordinating the Trade-related Technical Assistance (TRTA) and a significant number of Government agencies and Development Partners.

The SWAp aims to promote a coordinated strategic approach in three pillars that complement each other. The three areas are defined as pillars and address the following:

• Reforms and Cross-cutting Issues for Trade Development: Legal reforms, trade facilitation, technical barriers to trade, improving sanitary and phyto-sanitary regulation and practice;

• Product and Service Sector Export Development: Sector specific reforms, with a focus on the 19 products identified in the CTIS; and

• Capacity Development for Trade: Building competencies, institutional functionality, and information and accountability systems.

The Trade SWAp’s vision is the following: “In the next ten years, the RGC will be increasingly valued for its integrity, for its capacity to articulate and implement trade policies and strategies in consultation with all trade stakeholders and for its ability to enforce trade regulations aiming at strengthening competitiveness in existing export industries and at promoting export diversification”. Maximizing the benefit of AfT and enhancing policy dialogue with the private sector, civil society and development partners will pursue the vision. In 2013, the Royal Government of Cambodia successfully updated its Diagnosis Trade Integration Strategy with a special focus on trade product development. The main objectives of the Trade SWAp Pillar Roadmap were taken into account in the DTIS 2013. This update DTIS was to be fed into the update National Strategic Development Plan IV (2013-2018). However, trade does not have a specific chapter in the NSDP IV. The Enhanced Integrated Framework (EIF) for TRTA to LDCs is a multi-donor initiative aimed at supporting Least Developed Countries (LDCs) in trade capacity building and integrating trade issues into overall national development strategies. The EIF has two objectives: (1) to mainstream trade into the NSDP such as the PRSPs and (2) to assist in the coordinated delivery of TRTA in response to needs identified by the LDCs. The EIF is built on the principles of country ownership and partnership. The RGC, through the MoC, received a grant of US$1’493’900 for the implementation of the EIF Tier 1 activities (2010 – 2015).

As part of the EIF process and in order to implement the priority activities identified in the Action Matrix of the CTIS 2007, the MOC formulated two technical assistance projects titled “Cambodia’s Exports Diversification and Expansion Program (CEDEP I and II). The CEDEP I and II projects were successfully submitted and approved by the EIF Executive Board, under the EIF Tier 2 modality.

The CEDEP I project was launched on 25th October 2012 and approved for duration of three years. The total budget is US$3,383,429. The project seeks to increase, first, the export of Cambodia’s milled rice and high-value silk and, second, to improve the capacity of the MOC to monitor and evaluate the SWAp in general and the contribution made by CEDEP I to the overall Trade SWAp goals.

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The CEDEP I project therefore comprises three components, implemented by three different agencies or Main Implementation Entities (MIE):

• The International Finance Corporation (IFC/The World Bank Group) is responsible for the implementation of the component on exports of milled rice;

• The International Trade Centre (ITC) (UNCTAD/WTO) is responsible for the implementation of the component on exports of high value silk;

• The Ministry of Commerce, with implementation to be carried out by EIF National

Implementation Unit (NIU) located in MoC/DICO, is responsible for the Evaluation Function component.

Objective of the Project: The overall objective is to strengthen and diversify export supply capacity in milled rice and high-value silk sectors and enhance the capacity of DICO at the MoC to monitor and evaluate substantive progress of Cambodia’s Trade SWAp. The CEDEP I project will target the following development impacts, which are consistent with the five Trade SWAp’s goals as identified in the Trade SWAP’s Pillars Road Maps:

Component 1: Milled Rice

• Impact #1: Rice being the largest employment sector of the Cambodian economy, development of milled rice exports will have a positive impact on poverty reduction, especially through income growth in many regions of the country. Development of the sector supports Cambodia’s efforts to meet its MDGs.

• Impact #2: The competitiveness of Cambodian rice exports is increased, resulting in better earnings of rice millers and farmers in the milled rice supply chain, led by its higher value fragrant rice segment.

Component 2: High-Value Silk

• Impact #3: Increased competitiveness of silk export sector will have a positive impact on poverty reduction through employment creation and income growth, especially among women. Development of the sector will support Cambodia’s efforts to meet its MDGs.

• Impact #4: The focus on high value silk exports will contribute to developing Cambodia’s image of an economy that can compete not only on price but also on quality.

Component 3: Evaluation Function

• Impact #5: Enhancing the Government’s ability to lead and drive its Aid for Trade as a means to strengthen the effectiveness of the mainstreaming of Trade in its development policies and the development of its institutions.

The outcomes and the indicative activities for each component of the project are presented in the table below:

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Milled Rice

Outcome #1: The Enabling Environment for the Cambodian Private Sector to meet the Government’s targets for Milled Rice exports is enhanced and sustained through the creation of an Association of Rice Exporters and enhanced G-PS dialogue on Rice exports in G-PSF or other venues Output 1: Technical working groups are organized among rice millers and exporters as a precursor to the association

Output 2: Updated mapping of milled rice value chain (based on mapping in Rice Policy) (to be done jointly with MoC Value Chain Unit and other stakeholders) Output 3: Functioning association is created and registered – Cambodian Rice Exporters Association (CREA).

Output 4: Mechanism(s) for regular consultation between Government and Rice exporters on milled rice exports is (are) established through G-PSF or other venue and utilized Indicative Activities:

• Convene meetings with exporters to identify issues in areas of Trade Facilitation, Export Financing, Compliance (Quality Management), Production Technology and Rice Supply, and the design of a Cambodian fragrant rice brand image. These meetings lead to formation of Technical Working Groups

• Consultation mechanisms identified and agreed among exporters and government lead agencies • Mapping of Rice Export Value Chain (focus on trade facilitation element) is updated with MoC VC unit and

exporters • Annual review/update of Value Chain • Legal/administrative assistance to register the association • Consultative meeting with Thai Rice Exporters Association, possibly through a country visit • Baseline information compiled

Cambodian Exporters Association website designed Outcome# 2: Cambodian Rice Millers are successful in identifying several new major import market opportunities (in addition to EU and Russia)

Output 1: Market Potential Analyses/Trade information developed for five new markets (to be done jointly with MoC Value Chain Unit).

Output 2: Manual on export procedures/ trade facilitation issues for milled rice produced

Output 3: Manual on SPS standards and certification requirements for milled rice produced

Output 4: Develop and publish Cambodian Rice Portfolio Catalogue

Output 5: Three new potential markets have been visited by groups of export-ready and exporting rice millers

Output 6: Export-ready and exporting rice millers have participated in 4 key rice trade fairs and buyer-seller meetings (actual timing depends on event calendar) Output 7: 8 Rice Millers become HACCP certified with support from project

Indicative Activities: • Create an event calendar (rice trade fairs and related fairs, national, regional, international) • Update baseline information including list of international buyers/investors interested in Cambodian rice • Market research on attributes of Cambodian fragrant rice (domestically, as well as perception of current

international buyers) • Update Cambodian Rice Export Potential Assessment at HS 6 level and HS 8 for aromatics

o Current markets vs potential markets o Trade flows, including competitors trade flows o Market access conditions o Nature of demand - parboiled, aromatic, organic, brown

• Workshop on market research, identification of market opportunities and Identification of sources of information and networks, including overseas Government representatives (trade information and promotion channels)

• Workshop with capacity training on the use of on-line Market Analysis Tools o Select 5 new (out of the top ten) milled rice importers in the world (ITC’s trade maps) o Analyze trade-flows and competition

• Workshops with exporters on preparing for market prospecting and participation to trade fairs, (one workshop before each mission but can be reduced to round table briefing meetings)

• Debriefing workshops after each market visit, each participation in trade fairs • Preparation/briefing meetings to no less than 9 (better 12 = 4x/year) Cambodian participations in trade fairs:

Timing and number depends on actual event calendar

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• Training workshops: o Contracts and negotiations, international trade laws, settlement of claims, arbitration o Export packaging and labelling, product adaptation, branding o Costing, positioning, pricing o Purchasing and supply management

• Manual on trade facilitation produced by TWG and translated into Khmer • Cambodian rice product portfolio agreed upon and published by the Association’s Working Groups • 9 Market prospecting missions to target markets (elaborated during Market Analysis work shop) • Round table meetings with visiting international buyers/rice traders • Presentations to expose millers to new export enhancing products/technologies such as extrusion of broken rice and

fortified rice (e.g. Nutri Rice) • Group training on HACCP organized for selected group of rice millers • On-site training for HACCP organized in 8 rice millers/exporters • 8 rice millers’ application for HACCP certification supported Outcome #3: Cambodian Rice Millers are successful in clinching and completing export contracts by meeting quantities, quality, and price requested by importers, especially with respect to fragrant rice which is developed as the leading Cambodian rice brand. Output 1: Establish a Cambodian fragrant rice brand for an export quality type of milled fragrant rice competing with Thai fragrant rice and responding to expectations of import markets

Output 2: Promote Cambodian fragrant rice brand

Indicative Activities: • A promotional concept and standard flyer and poster for a Cambodian fragrant rice identity is created (note:

fragrance in Cambodian perception is linked to Rumdul or Romdul, Mitrella Mesnyi, national flower) • Recruit consultant for above to work with Association’s working group • Poster is distributed to prominent locations in Cambodia frequented by visitors (airports, hotels, tourism

offices) • Market visits under outcome #2, outputs #5 and #6 • Promote brand through Cambodian booth at Trade fairs (rice, tourism, food, hospitality) • Factual information on Cambodian rice and rice exporters and promotional material is disseminated to all

Cambodian Embassies’ Commercial sections abroad, trade promotion offices, tourism organizations etc. • Press conferences • Exporters adopt the Cambodian fragrant rice brand/logo and display it together with their individual brands. • Exporters use Cambodian brand in association with their product lists and invoices • Cambodian Rice Exporters Association (CREA) Website promotes Cambodian Rice • CREA sets aside advertising budget for Cambodian rice

High Value Silk

Outcome #1: Market Development Output 1.1: Export potential and key export markets for high value silk products identified Output 1.2: Marketing capacities of selected exporters strengthened and export marketing strategies elaborated Output 1.3: Exporters actively investigate foreign markets Indicative Activities: Output 1.1 " Develop in collaboration with the VC Unit at TPD/MoC an assessment methodology to measure performance of

the sector (e.g. company surveys disaggregated by men and women, statistical analysis) including current export volumes;

" Streamline HS-reporting for silk export transactions (in cooperation with the General Department of Customs and Excise);

" Assess in cooperation with VC Unit productive capacities of the sector for both silk production and processing (e.g. gender sensitive value chain analysis, existing production outputs, product range, prices and quality aspects), as well as contribution of the sector to employment, income generation and economic empowerment of women and establish baselines disaggregated by gender for project indicators

" Assess market trends and conduct import market study identifying export potential and niche markets (including buyer characteristic, purchasing requirements and distribution channels) for high value silk products taking into account competition from other silk producing countries (e.g. China, Vietnam, Laos etc.)

" Define 5 key export markets for Cambodian high value silk products

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" Select 8-12 exporters or export-ready enterprises according to defined selection criteria as primary beneficiaries of project assistance. Gender-sensitive ownership of the exporting companies will be taken into account in the selection in order to support women owned enterprise in moving up the value chain;

" Disseminate findings among main key stakeholders in national seminar and through web-based information channels

Output 1.2 " Assist selected companies to elaborate export plans towards target markets based on the findings of the export

potential assessment (Output 1.1) " Train companies on market access criteria and distribution channels in target markets " Organize workshops for selected exporters to improve awareness of buyer requirements as well as other priority

areas such as contracting, costing and pricing and provide customized advice to improve communication and export order handling (e.g. Incoterms, buying cycles, sampling)

" Provide customized support to develop/improve promotional marketing material and tools for selected companies (corporate brand image, product catalogues, websites)

Output 1.3 " Organize training workshops and provide customized support on how to prepare for trade fairs and on how to

undertake marketing missions " Identify relevant trade fairs and support participation of selected exporters in (2-3) international trade fairs

according to identified export markets (e.g. Lifestyle Vietnam, M&O, Ambiente, Bangkok Fair). Whenever possible support trade fair participation (booth rental, promotional material, transport accommodation) based on cost-sharing principles with beneficiaries

" Identify prospective buyers in target markets and facilitate match-making " Organize 1-2 buyer-seller meeting and marketing mission to prospective buyers in target markets (to be organized

back to back with trade fair participation) " Facilitate buyer visits to selected exporters " Facilitate the establishment of new sales outlets in Phnom Penh (hotels etc.) targeting international visitors " Facilitate PPPs with tour operators/hotels to bring tourist to village-based weaving sites and showrooms of

exporters and conduct other commercial and promotional activities " Analyze lessons learned and experiences made (trade fair participation, buyer-sellers meetings, PPPs), revise the

approach and arrangements, if necessary, and organize follow-up activities accordingly " Conduct dissemination workshops to share experiences and lessons learned with silk companies that are not

directly supported by the project activities, especially women owned companies with a view to improving their position in the silk sector value chain

Outcome #2: Product Development Output 2.1: Skills of male and female exporters in product innovation and design development strengthened Output 2.2: Improved vertical integration of silk value chain and enhanced technical skills of weaving communities to enable production of high quality silk products in larger quantities Output 2.3: Quality and traceability of silk yarn imports ensure

Indicative Activities: Output 2.1 " Assess company-specific supply-side capacities including resources available for product design and development

and establish project baselines " Conduct a general training course on contemporary trends on fashion design (e.g. color palettes, patterns,

silhouettes) " Train selected companies on product design and development including the business perspective of product design " Conduct one study tour for designers to relevant fashion schools and buyers (to be combined with sales mission) " Support companies to identify product range and collection for target markets and assist in creating a schedule for

the creation of the collection " Provide customized advisory support to selected companies to develop new product designs and collections " Monitor the development of new designs and products and provide follow-up support as needed Output 2.2 " Identify weaving communities with competitive advantage to serve export markets " Assess existing weaving and dyeing techniques/methods and identify priority areas to increase production

efficiency and quality improvements " Provide technical training on silk weaving techniques to master weavers and on dyeing methods (AZO free and

natural dyes) in order to respond to buyer requirements for new designs and product patterns and to improve production efficiency

" Facilitate linkage building between exporters and weaver groups (vertical integration) to increase ability to meet demand requirements in terms of quality and quantity

" Ensure quality requirements by preparing/disseminating “spec cards” in cooperation with weavers’ association " Strengthen horizontal cooperation among weaver communities to increase ability to produce large quantities of

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consistent quality products " End of project survey among village-based weavers to assess changes in sales and income Output 2.3 " Conduct study on silk yarn sourcing identifying suitable import markets based on cost and quality criteria and

establish baseline for yarn imports " National silk supply directory updated and published " Facilitate bulk purchasing of silk yarn imports (i.e. Chinese silk yarn) " Support purchasing units to source raw materials Outcome #3:Silk Sector Coordination and Strategy Output 3.1: Silk Board and Silk Secretariat have been created. Working groups of stakeholders have been formed around key silk sector development issues Output 3.2: Silk Sector Strategy and Plan of Action incorporating gender related considerations developed with stakeholders Output 3.3: Effective implementation management and monitoring framework established Indicative Activities: Output 3.1 " Organize working group meetings with key sector stakeholders (i.e. Silk Board Working Group, Trade SWAp Silk

Task Force) to facilitate establishment of the Silk Board and Silk Board Secretariat Output 3.2 " Disseminate results of market assessment, (carried out under Output 1.1) with sector stakeholders to examine

challenges, market-orientated options and potential solutions " Organize inclusive participatory workshops following ITC’s export strategy methodology with sector stakeholders

from all stages of value chains, including women " Formulate in cooperation with the Silk Board and Silk Board Secretariat the Sector Strategy incorporating the

gender dimension " Produce a detailed and prioritized Plan of Action specifying activities, targets, assigning responsibilities and

resources required for implementation Output 3.3 " Develop jointly with key stakeholders an implementation framework for the strategy action plan " Provide training to staff of the Silk Board Secretariat on developing implementation initiatives, implementation

management and monitoring results " Provide assistance in monitoring progress and measuring results of strategy implementation " Organize roundtable meetings with stakeholders concerned to review and adjust the Strategy and Action Plan as

appropriate in cooperation with the National Silk Board during the remaining period of the project Program Evaluation Function Outcome #1: Strengthen the NIU’s capacity to monitor and evaluate progress made under Trade SWAp, including evaluating impacts and results of technical assistance Output #1: A mid-term independent evaluation of the Tier 2 project is organized and carried out

Output #2: A final independent evaluation of the Tier 2 project is organized and carried out

Indicative Activities: • ToRs for independent mid-term evaluation team developed • Mid-term evaluation team identified and recruited (one international, one national) • Draft report of mid-term evaluation team reviewed and commented • Final mid-term report received • ToRs for independent final evaluation team developed • Final evaluation team identified and recruited (two international, two national – one international expert for

each product sector) • Draft report of final evaluation team reviewed and commented • Final evaluation report received

Outcome #2: Strengthening the NIU’s capacity to disseminate progress and results of technical assistance under Trade SWAp Output #1: Findings of project results and impacts are explained and disseminated once a year through five regional workshops Output #2: Findings from evaluations (mid-term and final) are published and disseminated within Cambodia and to the international community Indicative Activities:

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• Presentations prepared in Khmer for dissemination workshops. • 5x3=15 regional workshops organized and held for disseminating monitoring results and evaluation reports. • Exec Summaries of mid-term and final evaluations reports translated into Khmer. • NIU to report on mid-term and final evaluation to S-SC (NSC). • Evaluation reports uploaded to website. • Final evaluation report published and printed. • Event for national and international audience organized in PP to disseminate final evaluation.

1.1 Purpose of the Evaluation

According to the ToRs (Annex I), the main purpose of this study is to help the MoC to carry out a comprehensive independent review of the CEDEP I in order to assess progress made against project planned results and how these are contributing to the achievement of the overall project objectives so as to define ways and means to improve its implementation to reach its stated objective of trade diversification and expansion.

The goal is to review project performance in order to provide greater insight into the CEDEP I implementation operations and enable efficient and cost effective project delivery and management. The MTE will help identify obstacles to performance, provide advices and recommendations for the 2nd phase of the project (2014-2015) and information for the EIF global program level evaluation.

An Independent Evaluation Team, recruited by the DICO/MoC, carried out the MTE. The evaluation team consisted of Ms. Céline Bacrot, Lead International Evaluation Consultant and Yim KimChhean, National Evaluation Consultant. The MTE Team was contracted for a period of 30 working days from September 25th to October 31st, 2014. 1.2 Scope of the MTE The scope of the MTE covered three elements:

• Evaluation of the project design and implementation; • Evaluation of the results achieved; • The recommendations for the second half of the project.

The period covered by the MTE is from the endorsement of the CEDEP I project by the EIF secretariat on August 6th, 2012 until August 31st, 2014. 1.3 Approach and Methodology The evaluation attempted measuring the project achievements against the five following OECD evaluation criteria7:

! Relevance: The extent to which the aid activity is suited to the priorities and policies of the target group, recipient and donor.

! Effectiveness: A measure of the extent to which an aid activity attains its objectives. ! Efficiency: Efficiency measures the outputs -- qualitative and quantitative -- in relation to

the inputs. ! Impact: The positive and negative changes produced by a development intervention,

directly or indirectly, intended or unintended. ! Sustainability: Sustainability is concerned with measuring whether the benefits of an

activity are likely to continue after donor funding has been withdrawn. 7 OECD website: http://www.oecd.org/development/evaluation/daccriteriaforevaluatingdevelopmentassistance.htm

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Rating Scales: Highly Satisfactory (HS): No shortcomings;

Satisfactory (S): Minor shortcomings; Moderately Satisfactory (MS); Moderately Unsatisfactory (MU): Significant shortcomings; Unsatisfactory (U): Major problems; and Highly Unsatisfactory (HU): Severe problems.

1.3.1 Desk Review Before the evaluation field visit, a desk review was carried out of relevant material, including the project documents, work plans, progress reports, supervision mission aide memories, as well as relevant materials from secondary sources.

The list of documents and materials reviewed for MTE is outlined in Annex VII.

1.3.2 In-Country Visit

The evaluators undertook field visits to Battambang and Takeo Provinces to meet with the beneficiaries of each component of the CEDEP I to undertake at depth interviews and discussions and observe a set of key issues related to performance in Phnom Penh covered by the project targets.

The in-country visits in the two target provinces were aimed at meeting and discussing with direct and indirect beneficiaries such as rice millers, farmers, exporters, weavers and silk community leaders in order to have their views on the project and the impact of this latter on their business and livelihoods.

People consulted and met during the course of the evaluation are listed in (Annex III) and the meetings schedule in (Annex IV).

1.3.3 Information Collection Methods A variety of methods were used depending on the situation and the opportunities. As far as possible there methods were participatory, allowing stakeholders to express their experiences and suggestions in an open way. There included:

- Document reviews; - Briefing and/or presentations from implementing agencies and partners; - Semi-structured interview and face-to-face interview with key informants; - Focus group discussions with project participations with both direct and indirect

beneficiary members; and - Time line analysis.

1.3.4 Participation of MIE Staff Main Implementing Entities staff introduced the evaluation team to the beneficiaries and then took an observation role during the discussion and interviewing. Clarifications of issues were made subsequent to the interview and/or meeting. The MIE staff accompanied the evaluation team on the visits to the provinces and were present in most of the meetings. 1.3.5 Presentation of Draft Findings and Results At the end of the country visit there was a half-day meeting on October 9th, 2014 with the Lead Evaluation Consultant and key stakeholders in order to present the preliminary key findings of the

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MTE. The challenges met by the MIEs in the implementation of CEDEP I as well as recommendations for the next phase were also presented so as to agree on the way forward. 1.4 Structure of the Evaluation Report The evaluation report itself comprises four sections. Section 1 about an overview of project information and background and also an introduction to the need to undertake this mid-term evaluation, purpose of the evaluation as well as the approach and methodology used to carry out the evaluation has been presented. Section 2 has provided mission findings of evaluation as well as synthesis findings of the project, and sustainability used to carry out the project management, Section 3 highlights the key challenges and lessons learnt based on the analyses given in Section 2. Conclusions and recommendations are given in Section 4. There are seven (7) annexes covering the ToR of the MTE, list of persons met during the MTE, the schedule of meetings, the updated logframe, the disbursement summary, the list of documents used for the MTE, and the presentation of the key findings made to the stakeholders on October 9th, 2014.

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2. FINDINGS OF EVALUATION

This section reports the findings of the mid-term evaluation. In particular, they assess achievements against objectives and factors, which put a strong focus on growth of exports though diversification and strengthening of the sectoral value chains. This section also analyses the attainment of results according to the indicators set in the results framework and discusses the findings related to sustainability of the project beyond its mid lifecycle. The analysis provided here is based on evidence gathered using the methodology that has been elaborated.

2.1.Project Management and Implementation

2.1.1 Project Document and Logframe The CEDEP I is the first project implemented in Cambodia under the EIF Tier 2 modality. The CEDEP I was formulated on the basis of the Royal Government of Cambodia’s Economic Diversification strategy, CTIS and SWAp Pillar 2 priorities and following the recommendations included in Cambodia’ Trade Policy Review (WTO). After a process starting in November 2011, the draft project document of CEDEP I was finalized based on the comments of UNOPS serving as the EIF TFM and the EIF ES.!The final document of CEDEP I was endorsed by the EIF Tier 2 Appraisal Committee on May 4, 2012. The final document was endorsed by the Sub-Steering Committee on Trade and Trade-Related Investment (National Steering Committee) of the RGC on May 17, 2012. The CEDEP I project document was eventually submitted to the EIF Executive Secretariat for formal transmission to the EIF Board on July 1st, 2012. The EIF Board approved the EIF Tier 2 CEDEP I on 6th August 2012 with a contribution from the EIF TF amounting to $2,407,714 over a period of three (3) years, to which MIE, Government and Private Sector contributions should be added, to reach a total project budget of US$2,407,714. 2.1.2 Project Concept/Design The CEDEP I was designed in response to the objective of the Pillar 2 of the Trade SWAP to support product and service sector export development by strengthening supply capacity of the trade sectors identified in the CTIS 2007. Indeed, the Trade SWAp identified 19 sectors of which rice and silk as the main trade priority sectors to lead economic growth and export competitiveness of Cambodia. Therefore, the CEDEP I was designed and approved for funding under the EIF Tier 2 as a contribution to Cambodia’s efforts to trade mainstreaming and development. The CEDEP I has three components, exports of milled rice, exports of high value silk and Evaluation function with the organization of a core team. The “Evaluation function” component is aimed at supervising the progress achieved under the two other components and benefiting from communication and coordination of the CEDEP I activities through a core team composed of officials from line ministries involved in the CEDEP I sectors. The core team members would act as liaison officers between the MIEs and the line Ministries.

Due to the insufficient capacity and manpower in the DICO within the MoC8, it was decided to get on board two MIEs for the two components, namely, Milled Rice and High Value Silk. Indeed, DICO was already in charge of the TDSP, therefore it was not in a position to implement the CEDEP I. Only the component 3 on Evaluation Function was to be undertaken by DICO.

8 EIF CEDEP I Project Proposal, Para. 1.9, p5, July 2012

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The two MIEs selected were IFC for the Milled Rice component and the International Trade Centre for the High value Silk Component. In addition to the fact that these two MIEs had the minimum-required fiduciary and management capacity, they had the required technical expertise since they were previously involved in these sectors as described below: The International Finance Corporation has been involved in the agro-processing industry since 2008 with the five-year program supporting the agri-SMEs: “Development of the SMEs in the Agro-Industry Sector” (2008-2012). The project was extended until the end of 20149. The objectives are: i) to improve the business enabling environment by developing and implementing policy reforms and capacity building activities, and ii) enhance the development of SMEs in the agro-processing industry on the basis of the value chain approach for selected sectors. This program is funded by the European Union. Under this program, IFC implemented a specific project on rice namely the “Cambodia Rice Sector Support Project” (RSSP) for a total budget of $4,4 Million10. The objective of the project is to improve the competitiveness of the Cambodia rice export sector and increase of 300,000 metric tons of annual national rice exports with a value of USD 180,600,000. The “Cambodia Export Diversification and Expansion Program – Milled Rice’ component has been therefore included into this project with a focus on strengthening and diversifying export supply capacity for milled rice as per the CEDEP I logframe. As a result, a synergy was made with the IFC overall project covering the whole rice value chain, the CEDEP I component I targeting rice export promotion. This is in line with the national objective of Cambodia to export one million tons of milled rice by 2015. In addition, IFC is involved in the certification of food safety standard, which is a prerequisite for rice export to international markets. IFC supports the Institute of Standards of Cambodia (ISC) and ensures the coordination with both MIME/ISC and MoC/DIPR on the development of the standards specification of milled rice in order to be accredited by food safety certification companies. This was also undertaken in coordination with the TDSP. The International Trade Centre has been involved in the silk sector in Cambodia since 2004 providing support in the formulation of the Silk Strategy. In 2007, ITC developed the first phase of the Sector-Wide Silk project. The budget of the project phase I was $677,000, funded by NZAID (New Zealand), SECO (Switzerland) and UNDP (through the Integrated Framework). The Phase I focused on sericulture and yarn supply, weaving, and product and market development. In 2010, a second phase was implemented for a period of two years, for a total budget of $815,000 funded only by NZAID. The Phase II was focused on enhancing technical skills of weavers and marketing for diversifying supply channels and export silk products. At this time, ITC was already in supporting the coordination of the silk sector. Therefore, the CEDEP I could benefit from existing and past projects implemented by the MIEs as synergies were to be created while implementing the two components. All the MIEs contributed to the formulation and design of the CEDEP I. 2.1.3 EIF Management Arrangement and Memorandum of Understanding The CEDEP I is implemented by three different agencies. The decision was made by the EIF Trust Fund Manager and the MoC that separate MoU for each sub-component would be more appropriate in this context. Therefore, the TFM was to sign a MoU with each of the implementing agencies. It was also agreed that each component would follow the procedures of its respective implementing agency. 9 The evaluation of the overall project will be done in November 2014. 10 The total budget covers the CEDEP I budget for the component 1 on Milled Rice.

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Therefore, each MIE is responsible for substantive and financial reporting of its component directly to the EIF Trust Fund Manager while keeping the EIF Secretariat and DICO informed of the reports sent to the TFM. It was agreed as per the CEDEP I project document11 that DICO as coordinating entity would report about the implementation process to the Trade SWAp Implementation Committee (meets on monthly basis) and the Trade SWAp National Sub-Steering Committee on Trade Development and Trade-related Investment (meets on quarterly basis). The Trade SWAp Implementation committee focuses on the technical aspects of the project implementation. ITC reports to this committee while IFC reports to Agro-Committee under the Ministry of Industry and Handicraft, which is the IFC national counterpart for the RSSP project. Therefore, the reporting arrangements would follow the same procedures as for the EIF Tier I projects so as to increase the monitoring and reporting role of DICO. The EIF management arrangement are presented below for each component: Component 1: The MoU between the EIF TFM and IFC was signed on December 14th, 2012. Therefore, the project should end on December 13st, 2015. However, in order to allow IFC to the lead-time to close the project in their system, the activities shall be concluded by June 30th, 2015. The IFC office in Phnom Penh manages and supervises the implementation of the CEDEP I Milled Rice component. The progress report (January/June 2013) and the Annual Technical Report for the year 2013 were sent to UNOPS. The Progress report for the period January/June 2014 was under finalization at the time of the present MTE. However, IFC staff communicated and shared the results achieved under the period covered in 2014 with the MTE Team. It was agreed that IFC’s existing annual PSC would continue to serve as the mechanism for reviewing the program’s progress and endorsing strategic recommendations. Component 2: The Implementation Letter between the EIF TFM and ITC was signed on September 25th, 2012. The 1st tranche of funds from UNOPS was received by ITC on 2nd October 2012, which is when project implementation could effectively start. Two project officers based in Phnom Penh and one ITC staff based in Geneva manage and supervise the CEDEP I High Value Silk component. Four progress reports (Preparatory phase (October/December 2012); January/May 2013; June 2013/January 2014; and February/July 2014) were produced and sent to UNOPS.

Component 3: The MoU between the EIF TFM and MoC/DICO was signed on October 25th, 2012 and amended on August 14th, 2014.

11 EIF Tier 2 CEDEP I Project document, p45

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The component 3 is aimed at strengthening the evaluation capacity of the Government of Cambodia through the establishment of a core team from line Ministries supervising the projects and increasing coordination and synergy among the Government. The component was designed in accordance to a mechanism already in place in Cambodia namely, the POC. This mechanism defined for each Core team member an incentive in the form of a lump-sum payment in exchange of additional functions to perform in capacity building and coordination as liaison officers. This mechanism was established to ensure harmonization, alignment and adjustment among the Government. Two core teams were formed for each component and composed by five officials as follows: For the Milled Rice Component:

- 1 official from MoC/DICO NIU/M&E Unit; - 1 official from MoC/DIPR; - 2 officials from Ministry of Industry and Handicraft (MoIH); and - 1 official from Ministry of Agriculture, Forestry and Fisheries (MAFF).

!For the High Value Silk Component:

- 1 official from MoC/DICO NIU/M&E Unit; - 1 official from MoC/TPD; - 1 official from Ministry of Women’s Affairs (MoWA); - 1 official from Ministry of Rural Development (MRD); and - 1 official from Ministry of Agriculture, Forestry and Fisheries (MAFF).

In addition to the core team, the component 3 was to be supported by one M&E Officer within DICO.

2.1.4 Implementation of the CEDEP I Components

! Component 1: Milled Rice The IFC has so far implemented the project as per the CEDEP I work plan. All the activities have been implemented. Some are completed and many are still ongoing as shown in the table below:

Activities Status (June 30, 2014)

Outcome #1: The Enabling Environment for the Cambodian Private Sector to meet the Government’s targets for Milled Rice exports is enhanced and sustained through the creation of an Association of Rice Exporters and enhanced G-PS dialogue on Rice exports in G-PSF or other venues

Completed

Output 1: Technical working groups are organized among rice millers and exporters as a precursor to the association

Completed

Output 2: Updated mapping of milled rice value chain (based on mapping in Rice Policy) (to be done jointly with MoC Value Chain Unit and other stakeholders)

On going

Output 3: Functioning association is created and registered Completed

Output 4: Mechanism(s) for regular consultation between Government and Rice exporters on milled rice exports is(are) established through G-PSF or other venue and utilized

Completed

Outcome# 2: Cambodian Rice Millers are successful in identifying several new major import market opportunities (in addition to EU and Russia)

On going

Output 1: Market Potential Analyses/Trade information developed for five new markets (to be done jointly with MoC Value Chain Unit)

On going

Output 2: Manual on export procedures/ trade facilitation issues for milled rice produced On going

30

Activities Status (June 30, 2014)

Output 3: Manual on SPS standards and certification requirements for milled rice produced On going

Output 4: Develop and publish Cambodian Rice Portfolio Catalogue Completed

Output 5: Three new potential markets have been visited by groups of export-ready and exporting rice millers

On going

Output 6: Export-ready and exporting rice millers have participated in 4 key rice trade fairs and buyer-seller meetings (actual timing depends on event calendar)

Completed

Output 7: 8 Rice Millers become HACCP certified with support from project Completed

Outcome #3: Cambodian Rice Millers are successful in clinching and completing export contracts by meeting quantities, quality, and price requested by importers, especially with respect to fragrant rice which is developed as the leading Cambodian rice brand.

On going

Output 1: Establish a Cambodian fragrant rice brand for an export quality type of milled fragrant rice competing with Thai fragrant rice and responding to expectations of import markets

On going

Output 2: Promote Cambodian fragrant rice brand On going

The IFC has benefited from the RSSP project in the implementation of the CEDEP I Milled Rice component. Indeed, the CEDEP I component complement the RSSP and allow fluidity in the rice value chain by supporting all the stakeholders from the rice farmers to the rice exporters. After an extension of two years in 2012, the RSSP will be closed at the end of 2014. The competition with the Thai and Vietnamese rice and the high transaction costs of the rice industry in Cambodia are the main competitiveness challenges of the sector. The recent collapse of the Thailand’s Rice Pledging Scheme generated a massive flow of Thai rice on the international markets leading to a decrease in prices. The Cambodia export volume remains stable in spite of these constraints with a total volume between January and June 2014 of 177,928 metric tons (approximately monetary value of $111,205,000) of which 50% is fragrant rice. The MIE has achieved great results through a strong collaboration with the rice millers and a great knowledge of the challenges and opportunities of the rice markets. The provision of training, the participation in international fairs (Thaifex in Thailand, TRT/WRC in Hong Kong, etc.) and the contribution to the certification of a rice miller (BRICo) have considerably increased the skills and quality of the rice industry as well as the international exposure which generated new markets and deals. The establishment of the CRF in May 2014 created the latest thrust for the sector. The creation of the CRF is under the output 3 of the Outcome 1. The rationale of this output was to unify the rice sector, which was very fragmented and organized around three structures: Alliance of Rice Producers & Exporters of Cambodia (ARPEC), Cambodia Rice Exports Association (CREA) and the Federation of Cambodian Rice Exporters (FCRE). Before the creation of the CRF, IFC has signed a MoU with the FCRE so as to align with the objectives of the project and prepare the coordination of the sector. However, the MoC decided to set up a new institution, which would not be part of the three existing institutions in order to ensure neutrality and rallying around the new entity. As a result, the CRF was created. At the time of the MTE, the CRF had 221 members including all the stakeholders of the rice value chain. The small farmers are included through the membership