Last updated: September 2016

Following more than two decades of strong economic growth, Cambodia has attained the lower-middle-income status as of 2015, with gross national income (GNI) per capita reaching US$1,070. The garment sector, construction, and services have been the main drivers of the economy. Growth is expected to remain strong in 2016, as recovering internal demand and dynamic garment exports slow growth in agriculture and easing construction and tourism activity.

Poverty continues to fall in Cambodia, albeit more slowly than in the past. In 2012, the poverty rate was 17.7 percent. About 90 percent of the poor live in the countryside. While  Cambodia has achieved the Millennium Development Goal (MDG) of halving poverty in 2009, the vast majority of families who escaped poverty were only able to do so by a small margin, thus  around 8.1 million people are near-poor.

Health and education, remain important challenges and development priorities for Cambodia. 32 percent (or approximately 0.5 million) of children under five are stunted. 79 percent (of 12.3 million people) do not have access to piped water supply and 58 percent (9.3 million people) do not have access to improved sanitation (2015).

Cambodia has made good strides in improving maternal health, early childhood development, and primary education programs in rural areas. The maternal mortality ratio per 100,000 live births decreased from 472 in 2005 to 170 in 2014, the under-five mortality rate decreased from 83 per 1,000 live births in 2005 to 35 per 1,000 in 2014, and the net primary school admission rate increased from 81 percent in 2001 to 95.3 percent in 2014.

In spite of these achievements, Cambodia still faces a number of development challenges, including weak public service delivery, which impede inclusive development, ineffective management of land and natural resources, environmental sustainability, and good governance. Underlying the quality, adequacy, and efficiency of public services is the ability of the government to generate additional revenue for important public spending and investment requirements, to spend the available resources efficiently and accountably, and to ensure timely commitments and payments for the operation of vital public services and public investment. Addressing this will help to stimulate the agricultural and tourism sectors to once again become strong engines of growth supporting poverty reduction, as well as to expand and sustain growth and promote diversification in the manufacturing sector.

Last updated: September 2016

Cambodia received its first credit from the World Bank in 1993. Following decades of conflict, the World Bank’s priority areas were to support the reconstruction of social and economic institutions and the development of physical infrastructure. Since 1999, increasing focus has been placed on governance reforms, macroeconomic stability and sustainable economic growth, private sector development, rural development, sustainable natural resource management, and improving and expanding health and education services.

The World Bank Country Assistance Strategy (2005-2008, extended to 2011) outlined two priority areas: removing governance constraints on growth and poverty reduction and supporting the strategies and investments needed to achieve Cambodia’s development goals. Projects financed by the World Bank were designed to help Cambodia implement its National Strategic Development Plan for 2006-2011 (extended to 2013) and achieve the MDGs.

In 2015, the World Bank Group carried out extensive country consultations with stakeholders around the country on Cambodia’s development opportunities and challenges, and how best to address them in the next two to three years. These consultations helped inform the World Bank Group Country Engagement Note (CEN), a two-year strategy to support Cambodia in sustaining inclusive and resilient growth to reduce poverty and enhance shared prosperity, reviewed and supported by the World Bank’s Board of Executive Directors on May 19, 2016.

The CEN sets out the strategy of the World Bank Group to support Cambodia’s goal of reducing the incidence of poverty by at least one percentage point per year, as indicated in the country’s 2014 – 2018 National Strategic Development Plan. The strategy aims to help Cambodia further improve its business climate, making its products more competitive globally. It also focuses on improving social and infrastructure service delivery, generating opportunities for the poorest by investing in productive assets thus creating more jobs.

The CEN financing program includes seven investment projects, totaling about $250 million of funding from the International Development Association, or IDA, the Bank’s fund for the poorest. The program is focused on development priorities of Cambodia and reflects the results of in-country consultations and the agreement on the priority investment financing and advisory support between the Government and the WBG.

During the implementation of the CEN, the World Bank Group plans to conduct a Systematic Country Diagnostic to help identify opportunities and challenges, as well as solutions for reducing poverty and sharing the benefits of growth among poor Cambodians. The Bank also expects to provide analytic and advisory services requested by the government, with a focus on trade and investment, macroeconomic and financial sector management, and public sector management and social infrastructure.

The International Finance Corporation, a member of the World Bank Group that focuses on the private sector in developing countries, over the period of 2016-2017 will expand its activities by investing about $200 million, in addition to providing services in finance, infrastructure, and trade and competitiveness.

The Multilateral Investment Guarantee Agency, the Bank Group’s political risk insurance arm, stands ready to offer political risk insurance and guarantees to investors in sectors such as finance, manufacturing, agribusiness and services, and infrastructure.

Last updated: September 2016

The World Bank has supported education projects in Cambodia through Bank-administered programs funded by the Global Partnership for Education as well as other development partners. The programs granted scholarships to students and trained teachers in addition to building schools and setting up early childhood education programs. Under the ongoing projects, 37 percent of children between 3 and 5 years old has enrolled in urban and rural districts where new 100 formal and 500 community based pre-school facilities were provided by June 2016; 2,420 community early child education teachers and mothers have been trained and more than 128,000 students between 3-5 years olds directly benefited from the project. 

World Bank supported programs and development partner trust funds have helped to improve the coverage and quality of health care services in Cambodia, especially in remote and hard to access areas. The projects helped to expand health facility network, supplied medical equipment, and financed technical and institutional capacity improvement like better sanitation and water quality in health centers. The Health Equity Fund (HEF) is helping the poor to access health care services resulting in more than 8.46 million visits to a health facility by the end of 2015. Recently, The World Bank approved a $30 million project to further advance the two innovative Cambodian health financing mechanisms. First, the Health Equity Fund will help to cover the costs of health services for the nation’s three million poor people, reducing their out-of-pocket costs and providing reliable financing for health facilities. Second, redesigned Service Delivery Grants will improve the quality of health services by strengthening health-facility management, ensuring  staff attendance and by focusing on health outreach activities.

In the water and sanitation sector, 13,200 additional households in ten districts gained access to improved sanitation. Subsequently, the government decided to roll out the transfer of rural sanitation function nationwide in the coming years.  

In the transport sector, the World Bank-financed Road Asset Management Project helped to rehabilitate some 470 kilometers of Cambodia’s national and provincial road network. As a result, the travel time was reduced from 2 hours to 1.6 hours per 100 kilometers. The project also helped to strengthen capacity in the Ministry of Public Works and Transport in road asset management planning, budgeting and routine and periodic road maintenance. Recently, the World Bank approved a $60 million that aims to improve 218 kilometers of roads making them resilient to seasonal flooding, shortening travel times and providing better connectivity along national road corridors in Kampot, Preah Sihanouk, Tbong Khmom, and Kratie provinces.

The Trade Related Assistance to Cambodia (TRAC) program, managed by the Bank and supported by a multi-donor trust fund, has helped Cambodia on customs and border reform, regulatory reform, streamlined import and export procedures, and improving business environment. TRAC has contributed to improvements in the areas of non-tariff measures (NTM), phytosanitary standards trade logistics, trade repository, investment incentive policy, and integration into regional production networks.

The WBG Trade Facilitation Facility (TFF) supported the General Department of Customs, Ministry of Economic and Finance to develop the Cambodia National Single Window blueprint. The Trade Development Support Program (TDSP) continues to support the expansion of ASYCUDA to 58 customs checkpoints across the country, covering 95% of import and export transactions; support to Ministry of Agriculture Forestry and Fishery on sanitary and phyto-sanitary automation system, and technical assistance to the Ministry of Commerce on certification of country origin automation, trade-marks registration system, business registration automation system, and trade training research institution. TSDP also supports the private sector development on export training, value chain analysis, labor and commercial dispute resolution through the arbitration council foundation and the national council arbitration of Cambodia. Subsequently, Cambodia gained 56 places in the Logistics Performance Indicators (LPI) ranking in 2010–2016.

Through the Public Finance Management Modernization Project and related activities, the World Bank is helping Cambodia to improve its ability to raise revenues and strengthen its public finance management system. Key achievements include improved revenue generation capacity and debt sustainability rating; use of banking system for government transactions (nearly 100 percent); and a Financial Management Information System (FMIS) to facilitate payments and accuracy in financial reporting.


Cambodia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments