New $200 Million World Bank Project to Support COVID-19 Relief, Build Resilience Against Future Economic Shocks in Cambodia
Cambodia’s efforts to combat the ongoing COVID-19 pandemic and begin its journey toward economic recovery were given a boost today by World Bank’s Board of Executive Directors, who approved a US$200 million International Development Association (IDA) credit for the Cambodia Relief, Recovery and Resilience Development Policy Financing Project (DPF). The project will help Cambodia deal with the COVID‐19 crisis by providing timely and targeted relief to affected people, facilitating robust recovery through structural reforms, and building resilience against future economic shocks.
Cambodia is facing an unprecedented economic and social crisis. In 2020 its economy contracted for the first time in thirty years — by 3.1 percent — and is in now in the midst of its worst COVID-19 outbreak since the pandemic began. The sectors most impacted by the crisis — including garments, tourism, and construction — are also those which account for much of the employment in the country, creating additional challenges for a sustained economic recovery. In the absence of significant mitigation measures, the pandemic could result in sharp rises in unemployment and poverty, with the number of people falling into poverty expected to swell by nearly one million.
To deal with this situation, the Royal Government of Cambodia has introduced emergency response measures and is preparing a Post-COVID-19 Economic Recovery Plan. This latest DPF will assist the government’s efforts in mitigating the immediate fallout of the pandemic by supporting actions that provide financial relief to affected households and firms. These actions include the introduction of reforms to improve the business environment, as well as measures to strengthen public finance management and revenue-mobilization institutions.
“There is a clear need in Cambodia to provide quick-disbursing resources in support of a comprehensive, government-led program that will protect the poorest from the impacts of the crisis and assist with the country’s economic and social recovery,” said Inguna Dobraja, World Bank Country Manager for Cambodia.
This project represents an integral part of the World Bank Group’s broader COVID‐19 response in the country and is part of a package of budget-support operations being provided by a number of Cambodia’s development partners, including the Asian Development Bank (ADB), the European Union (EU), and the Japan International Cooperation Agency (JICA).
Since the start of the COVID-19 pandemic, the World Bank Group has committed over $125 billion to fight the health, economic, and social impacts of the pandemic, the fastest and largest crisis response in its history. The financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jump start a climate-friendly recovery. The Bank is also providing $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests, and treatments.”