Overview

Last updated: April 2016

Cambodia continues to enjoy robust growth, albeit at a slightly slower pace. Real growth in 2015 is estimated to have reached 7 percent, compared to 7.1 percent in 2014. The garment sector, together with construction and services, are the main drivers of the economy. Growth is expected to remain strong in 2016, as recovering internal demand and dynamic garment exports offset stagnation in agriculture and softer growth in tourism.

Poverty continues to fall in Cambodia, although the pace has declined significantly. The poverty rate was 17.7 percent in 2012, with almost 3 million poor people and over 8.1 million who are near-poor. About 90 percent of them live in the countryside. World Bank estimates suggest that Cambodia achieved the Millennium Development Goal (MDG) of halving poverty in 2009. However, the vast majority of families who escaped poverty were only able to do so by a small margin, thus the significant share of the near-poor.

Human development, particularly in the areas of health and education, remains an important challenge and development priority for Cambodia. 32 percent (or approximately 0.5 million) of children under five-years-old are stunted; 82 percent (12.2 million people) of Cambodia’s people do not have access to piped water supply and 63 percent (9.3 million people) do not have access to improved  sanitation (2014).

Cambodia has made good strides in improving maternal health, early child care, 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.

Cambodia has also been successful in combating HIV/AIDS, tuberculosis and malaria. HIV prevalence among adults aged 15-49 decreased from 0.9 percent in 2006 to 0.7 percent in 2012. In 2014, 89 percent of active AIDS patients in Cambodia had access to antiretroviral treatment, a rate of coverage that is among the highest in the developing world. Tuberculosis prevalence rate per 100,000 population decreased from 1,230 cases in 2005 to 715 cases in 2013, and tuberculosis case fatality rates declined from 157 to 66 per 100,000 population at the same period. Malaria incidence decreased from 71,814 cases in 2009 to 24,135 cases in 2013, and malaria case fatality rates also decreased dramatically from 219 to 12 in the same period. Cambodia is on its way to achieving its goal of malaria elimination by 2015.

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: April 2016

Cambodia received its first credit from the World Bank in 1993. Following decades of conflict in the country, 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 under this strategy have been designed to help implement Cambodia’s National Strategic Development Plan for 2006-2011 (extended to 2013) and to help Cambodia achieve the MDGs.

The World Bank Group has provided analytical and policy advisory services to help Cambodia address pressing development priorities – including assessments of poverty and the investment climate, and studies on trade development, water and sanitation, health care, teacher quality improvement, and social protection.  The World Bank works closely together with Cambodia’s development partners as well as the Government, through joint government-donors Technical Working Groups, such as on Planning and Poverty Reduction, Private Sector Development, Public Administrative Reform, and Public Financial Management.

In June and July, 2015, the World Bank Group carried out extensive country consultations with stakeholders around the country on Cambodia’s development opportunities and pressing 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 that will continue to reduce poverty and enhance shared prosperity.

During the implementation of the CEN, the World Bank Group plans to conduct a Systematic Country Diagnostic (SCD), which will then contribute to the Country Partnership Framework.

Last updated: April 2016

The World Bank has supported education projects in Cambodia through Bank-administered programs and others funded by the Global Partnership for Education. 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, more than 900 poor and disadvantaged students received university scholarships and more than 128,000 students between 3-5 years olds will directly benefit from the project. 

World Bank supported programs and development partner trust funds have helped improve the coverage and quality of health care services in Cambodia and have improved health outreach activities in remote and hard to access areas. The projects helped expand the 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 access health care services with more than 8.46 million visits to a health facility by the end of 2015.

Under the Water and Sanitation Program, 27,000 families gained access to improved sanitation and an estimated 800,000 people gained access to piped water.  A pilot project to decentralize rural sanitation service delivery has been implemented to strengthen the capacity of district administration in ten districts in two provinces. 

In the transportation sector, the World Bank-financed Road Asset Management Project helped rehabilitate some 470 kilometers of Cambodia’s national and provincial road networks. The project helped reduce travel time from 2 hours to 1.6 hours per 100 kilometers. It has also helped strengthen capacity within the Ministry of Public Works and Transport for road asset management planning, including budgeting and routine and periodic road maintenance.

The Bank-managed Trade Related Assistance to Cambodia (TRAC) program, supported by a multi-donor trust fund, has helped Cambodia simplify import and export procedures and border processes as part of an effort to improve its integration into regional and global markets. Between 2010 and 2014, customs clearance dropped to 1.4 days from 5.9 days, helping Cambodia’s ranking in the World Bank’s Logistics Performance Indicator to rise 46 places to 83rd of 160 countries. Through the program, the Cambodian government has been able to include the private sector voice in the process of policy formulation. It has also helped strengthen standards and improved risk management of border controls.

The World Bank has helped improve governance at the district level through the Demand for Good Governance Project which has set up 36 offices to provide public services like motorcycle registration, small business licenses and construction permits. Nearly half a million cases were serviced over the last five years. The project also has set up an independent Arbitration Council which has resolved over 1,300 disputes during the project implementation period with more than 456,000 workers– mostly female – from the garment industry benefiting. The World Bank has also supported bottom-up governance reforms through the development and implementation of a Strategic Plan on Social Accountability for Sub-National Democratic Development.

Through the Public Finance Management Modernization Project and various technical assistance, the World Bank is helping Cambodia 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.

 


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

*Amounts include IBRD and IDA commitments