The World Bank In Cambodia

Over the past two decades, Cambodia has undergone a significant transition, reaching lower middle-income status in 2015 and aspiring to attain upper middle-income status by 2030. Driven by garment exports and tourism, Cambodia’s economy has sustained an average annual  growth rate of 7.7 percent between 1998 and 2019, making it one of the fastest-growing economies in the world.

However, Cambodia is experiencing a resurgence of COVID-19 cases, which has slowed the recovery, especially of the service, construction, and real estate sectors. The growth projection for 2021 is now revised down to 2.2 percent, despite strong export performance supported by improved external demand conditions. Cambodia’s outlook remains highly uncertain, and risks are tilted to the downside. Despite accelerated vaccination progress, risks of a protracted COVID-19 outbreak and further disruption remain high.

Employment and income had not recovered to their pre-pandemic levels even before the recent COVID-19 resurgence. About 69 percent of households’ main earners were employed in March 2021, 13 percentage points lower than before the pandemic. About 45 percent of households continued to experience income losses in March 2021. Disruptions to economic activities due to stringent measures to curb the outbreak have led to job losses or decreased working hours. School closures have disrupted education since late March 2021, especially for poor students.

Health and education, especially issues of quality and equitable access, remain important challenges and development priorities.

Cambodia has made considerable strides in improving maternal and child health, early childhood development, and primary education 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 infant mortality rate decreased from 66 per 1,000 live births in 2005 to 28 per 1,000 in 2014. Despite the progress in health and education outcomes, human capital indicators lag behind lower middle-income countries. A child born in Cambodia today will be only 49 percent as productive when grown as she could be if she enjoyed full quality education, good health, and proper nutrition during childhood. An estimated one in three children under the age of five suffer from stunting and only 36 percent of children between three and five years old are enrolled in early education. While net enrollment in primary education increased from 82 percent in 1997 to 97 percent in 2020, lower secondary completion rates are at 45 percent in 2019. As of 2020, 15 percent of Cambodia’s population (2.5 million people) did not have access to improved water, and 23 percent (3.8 million people) did not have access to improved sanitation.

Key reforms are needed for Cambodia to sustain pro-poor growth, foster competitiveness, sustainably manage natural resource wealth, and improve access to and quality of public services. Cambodia continues to have a serious infrastructure gap and would benefit from greater connectivity and investments in rural and urban infrastructure. Further diversification of the economy will require fostering entrepreneurship, expanding the use of technology, and building new skills to address emerging labor market needs. Accountable and responsive public institutions will also be critical.  The quality of human capital will be of utmost importance to achieve Cambodia’s ambitious goal of reaching middle-income status by 2030.

Last Updated: Oct 20, 2021

The World Bank’s engagement in Cambodia focuses on its mandate to eliminate poverty and boost shared prosperity by investing in human capital, tackling rural poverty, building basic infrastructure, and empowering communities.

The World Bank Group’s Country Partnership Framework (CPF) for Cambodia for FY19 – 23 was discussed by the Board on May 30, 2019. This five-year strategy is closely aligned with the fourth phase of Cambodia’s Rectangular Strategy for Growth, Employment, Equity and Efficiency and the National Strategic Development Plan 2019-2023. The CPF has three focus areas: (i) promote state efficiency and boost private sector development; (ii) foster human development; and (iii) improve agricultural productivity and the sustainable use of natural resources. Critical cross-cutting themes are governance, institutions, and citizen engagement, which are embedded in all World Bank Group-financed activities.

The Cambodia CPF’s three focus areas are underpinned by specific objectives:

Promoting state efficiency and boosting private sector development includes three objectives:

• Enhancing financial sector development and fostering private enterprises;
• Strengthening public sector accountability and public financial management; and
• Expanding and improving sustainable infrastructure.

Fostering human development includes two objectives:

• Enhancing the quality of education and alignment with labor demands; and
• Expanding access to quality early childhood services, along with health care and nutrition services.

Improving agricultural productivity and strengthening the sustainable use of natural resources includes two objectives:

• Strengthening management of water and land resources; and
• Improving agricultural productivity and diversification.

The World Bank supports these focus areas through investment projects in education, health and nutrition, roads, improved livelihoods, agriculture diversification, land allocation for social and economic development, water supply and sanitation, sustainable landscape and water resource management, disaster risk management, and community-level service delivery. Cambodia also benefits from a co-financing grant trust fund.

A Performance and Learning Review (PLR) is under preparation and will provide an opportunity to further refine and align the remaining CPF program with the Government’s Response, Reform and Resilience program as it focuses on recovering from the impact of the COVID-19 pandemic.

In support of Cambodia’s efforts to deal with the COVID-19 crisis and to strengthen the country’s economy for recovery and future resilience, the Bank approved the COVID-19 Emergency Response Project ($20 million), additional financing ($14 million) to the Health Equity and Quality Improvement project, Strengthening Pre-service Education System for Health Professionals project and the Cambodia Relief, Recovery and Resilience Development Policy Financing Project ($200 million).

Further, the Bank made adjustments to the active portfolio to respond to the crisis. For example, the Higher Education Improvement project re-allocated $5 million to support activities on EdTech e-learning to help students learn from home (nearly 3 million beneficiaries), and the Cambodia Agriculture Sector Diversification project financed $10 million in activities to address food security for vulnerable populations. The Livelihood Enhancement and Association of the Poor project continued to use the skills development platform to scale up the labor component. The Water Supply and Sanitation Improvement project will install water connections in hospitals treating COVID-19 patients and provided hand washing stations to households in low-income communities.

The knowledge agenda is a significant part of the World Bank’s engagement in Cambodia. Programmatic Advisory Services and Analytics (PASA) on Competitiveness and Entrepreneurship, Economic Diversification, Digital Development,  Social Accountability, Public Sector Performance, Poverty Assessment, Equitable Access to Quality Health and Nutrition Services, Environmental Sustainability and Resilience, and Social Protection & Jobs continue to strengthen the understanding of development challenges Cambodia faces and foster dialogue on development policy issues with a broad range of stakeholders.

Last Updated: Oct 20, 2021

The COVID-19 Emergency Response project supported enhancing COVID-19 testing capacity at national, regional, and provincial laboratories.  Testing capacity has increased from 1,500 tests to 6,000 tests per day. The medical equipment from the project has been distributed to support the development and expansion of COVID-19 treatment at one national hospital, 4 national treatment centers, and all 25 provincial hospitals. Infection prevention and control was enhanced through the provision of environmentally friendly technology, equipment, and supplies. Equipment has been provided for the establishment of the Emergency Operation Centers in all provincial health department offices.

The Health Equity and Quality Improvement Project (H-EQIP) is working to improve the equity and quality of health care services throughout Cambodia. It is the fourth in a series of World Bank-supported projects that have helped to expand the health facility network, with medical and laboratory equipment and equity and financial protection for the poor.  H-EQIP strengthened non-communicable disease services and government capacity and enhanced quality of care, infection prevention and control, and sanitation and water quality in health facilities. As of September 2020, almost 50,000 women have been screened for cervical cancer.

The Health Equity Fund (HEF) system, which is part of H-EQIP, as of 2020 had co-financed free access to almost 3.3 million patients, including 3 million outpatient visits, 259,000 hospital admissions, and 28,000 births per year for the poorest people in Cambodia, nationwide and across all public health facilities in the country. Payments for these services, as well as performance-based grants granted for improving quality of healthcare service delivery, are disbursed electronically into health facilities’ bank accounts. This has changed the empowerment and accountability paradigm as the additional resources have facilitated facility-level decision-making. The HEF system has also ensured vital funding for maintaining equipment and infrastructure and for dealing with unexpected shortages of drugs and consumables. 

The Cambodia Nutrition Project aims to improve utilization and quality of priority maternal and child health and nutrition services for targeted groups in Cambodia. The project has three components to strengthen the delivery of priority health services and stimulate demand and accountability at the community level as well as to ensure effective and sustainable response by financing results-based support to the Ministry of Health departments and programs, development and delivery of modernized social and behavior change communication campaigns.

The Secondary Education Improvement Project (SEIP) aims to improve secondary education quality by strengthening school-based management; upgrading the qualification of lower secondary school teachers, school leaders, and educational staff.  The project aims to improve school facilities through the construction and rehabilitation of 100 existing schools, the construction of 30 new schools, and equipping laboratory facilities at 100 targeted schools. Over the past three and a half years, the project has benefitted 25,865 students, teachers, and educational staff at national and sub-national levels. 

The ongoing Higher Education Improvement Project (HEIP) works to improve the quality of teaching and learning in five public higher education institutions by improving the curriculum, teaching methods, staff qualifications, and learning facilities, and promoting linkages with industry to ensure consistency with the job market. The project also provides grants to promote the development and implementation of research projects in science, technology, engineering, and math (STEM) and agriculture. The project has invested $5 million in e-learning so that nearly 3 million pre-school, primary, and secondary school pupils can learn from home while schools are closed. The support mainly helped the Ministry of Education, Youth and Sport develop teaching videos to be broadcast on its social media channels and television, develop student worksheets for the students to work with their textbooks, and provide school grants to print and copy the student worksheets for low-income students.

Based on the success of the implementation of the Implementation of Social Accountability Framework (ISAF) phase I, which was initiated in 2015, the phase II (ISAF II) has been carried out.

The World Bank established a multi-donor, Social Accountability and Service Delivery Trust Fund (SASD-TF) with Switzerland and Germany, as well as Australia’s Department of Foreign Affairs and Trade (DFAT) to provide financing for World Vision International (WVI) to implement demand side (civil society organization) activities and for the National Committee for Democratic Development Secretariat (NCDDS) to implement supply side (government) activities as part of the ISAF phase II (2019-2023).

ISAF II aims to achieve full coverage nationwide. So far, the supply side has rolled out to 24 out of 25 capitals and provinces, 170 out of 203 districts, municipalities, and khans, and 1,399 out of 1,646 communes and sangkats across the country. More services are being piloted in 5 districts, municipalities, or khans covering water supply and sanitation.

Thousands of Community Accountability Facilitators (CAFs) have been recruited and Joint Accountability Action Plan (JAAP) committees have been established to help mobilize communities to receive information on citizen rights and standards of services, monitor quality of services available, and monitor the implementation of JAAP. The ISAF Mobile App was created and available for both Android and IOS operation.

ISAF is integrated into the National Program Phase II of Sub-national Democratic Development 2021-2030.

Within another concrete intervention, the Livelihood Enhancement and Association of the Poor 2017-2022 (LEAP) is being implemented to improve livelihoods for rural and urban poor and vulnerable households in 47 communes/sangkats in Siem Reap province and 13 sangkats in Phnom Penh. Approximately, 20,000 poor and vulnerable households in the target communes/sangkats have received benefits from project interventions, of whom 51 percent are female. To date, a total of 778 self-help groups and 146 producer groups have been established, of which approximately 90 percent are female, for enhancing access to finance, inter-lending, agriculture skills, market linkages and value addition. A total of 586 students were enrolled for skills training in Siem Reap and Phnom Penh. Among 212 graduated students, 153 are employed. In addition to these interventions, LEAP has provided community economic infrastructure. A total of 68 items of infrastructure in Siem Reap and Phnom Penh have been improved.

The Bank-financed Water Supply and Sanitation Improvement Project has supported water supply in five provinces and improved wastewater collection and management in Siem Reap. About 1,500 people have benefitted in the remote province of Mondulkiri, including ethnic minority households.

The Mekong Integrated Water Resource Management Project  has supported 70 community fisheries with long-term community fishery management plans and equipped them with 100 motorboats and related equipment to carry out patrols in fishery conservation zones. The project built approximately 50 river guard offices, and more than 60 demarcations have been constructed to prevent illegal fishing. The project has also supported more than 20,000 beneficiaries through livelihood grant enhancement activities and increased income sources.

To improve water resource monitoring and data and information exchanges, the project also established 27 hydrological and meteorological monitoring stations, developed seven water resource modeling and river basin profiles, and installed water resources monitoring facilities. Sixty-eight government staff have been trained to use the decision support system tools.

The ongoing Road Asset Management Project II (RAMPII) has been supporting the Ministry of Public Works and Transport (MPWT) to improve the condition, safety, and climate resilience of over 420 kilometers of  the core national road network and to introduce a road management system. Performance-based contracting for road construction and maintenance is expanding to promote private sector participation and to optimize service quality.

The Road Connectivity Improvement Project approved last year will support the MPWT and the Ministry of Rural Development to improve climate resilient and safe road connectivity for over 2 million people, which is critical for them to access key facilities such as schools, hospitals, markets, and economic opportunities. The technical assistance grants in the transport sector provide analytical and advisory support to government counterparts on green urban mobility solutions, private sector participation in the road sector, climate resilience rural road accessibility, and road safety.

The Land Allocation for Social and Economic Development Project (LASED II) has helped to improve access to agricultural resources and infrastructure and social services for many citizens in rural communities. Through the project, the government has allocated 17,000 hectares of residential and agriculture farmland to 5,091 landless and land-poor families. So far, 3,502 families received land titles. Beneficiaries have received basic shelter materials and other in-kind assistance, to help with settling-in. The project has completed 345 km of roads in its target sites. It also built eight school buildings, 14 teacher houses, five health posts, and 12 community centers and markets. The project also provides improved agriculture extension services, enabling beneficiaries to make the best use of the land, engage in agriculture activities, and to foster more sustainable community development. Access to land for the poor or landless families is an important aspect of poverty reduction in Cambodia’s rural areas.

The Cambodia Southeast Asia Disaster Risk Management Project has been supporting climate resilient rural road connectivity in select provinces and is aimed at providing all-season rural roads to 325,000 residents, of which 51 percent are women. Institutional analysis and reviews of road design standards are undertaken to strengthen the government’s capacity to build resilient rural road infrastructure.  The project also makes use of innovative means such as the Kobo Toolbox for remote monitoring under COVID-19 restrictions. In addition, technical assessments of sovereign disaster risk financing needs have been completed and discussions are ongoing to finalize Cambodia’s national disaster risk financing strategy. The project will benefit most of the 3.5 million people living in the six targeted provinces with improved access to schools, health facilities, and economic opportunities.

The Cambodia Sustainable Landscape and Ecotourism Project is intended to improve protected area (PAs) management, and to promote ecotourism opportunities and non-timber forest product (NTFP) value chains in the Cardamom Mountains-Tonle Sap region. Good progress has been made on Protected Areas (PA) zoning activities, on the development of a PA law enforcement action plan, and on ecotourism, with plans for engaging private ecotourism operators and companies. There have been 128,000 visitors to selected community-based ecotourism sites as of August 2020.

The Bank has also been actively supporting Public Financial Management (PFM) and public sector strengthening in Cambodia since 2006 beginning with two successive projects and various technical assistance programs. The Bank continues to provide support with contributions from the European Union and Australia under the Cambodia Strengthening PFM and Public Sector Performance for Improved Service Delivery Programmatic Advisory Services and Analytics Project 2019-2022. This program aims to ease institutional bottlenecks in service delivery by focusing not only PFM but also broader public sector reform programs of the government. 

Analytical and technical assistance activities of the program have helped to inform government’s policies and strategies for public sector reform including, but not limited to, the development of the new National Program for Public Administration Reform (NPAR); change management and improvement of Financial Management Information System-related processes; non-tax revenue management reform blueprint, and the PFM reform program more broadly.

The program has also helped to build leadership and innovation capacity for senior Cambodian government officials. In partnership with Royal School of Administration (RSA) and Ministry of Civil Service, the program trained 150 senior officials and more than 95% of participants completed the course within the designated period.

Last Updated: Oct 20, 2021