Overview

  • 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 growth rate of 8% between 1998 and 2018, making it one of the fastest-growing economies in the world. While easing slightly, growth remains strong, projected to reach 7% in 2019, after the better-than-expected growth rate of 7.5% in 2018.

    Poverty continues to fall in Cambodia. According to official estimates, the poverty rate in 2014 was 13.5% compared to 47.8% in 2007. About 90% of the poor live in the countryside. While Cambodia achieved in 2009 the Millennium Development Goal (MDG) of halving poverty, the vast majority of families who escaped poverty did so by a small margin. Around 4.5 million people remain near-poor, vulnerable to falling back into poverty when exposed to economic and other external shocks.

    Health and education 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 live births in 2014; and infant mortality rate decreased from 66 per 1,000 live births in 2005 to 28 per 1,000 live births in 2014.

    Despite the progress in health and education outcomes, human capital indicators trail behind. A child born in Cambodia today will be only 49% as productive when grown as she could be if she enjoyed full quality education, good health, and proper nutrition during childhood. 1 in 3 children under the age of five suffer from stunting and only 36% of three-to-five-year-olds are enrolled in early education.

    Cambodia’s most recent Demographic and Health survey (2014) indicates 32% (or approximately 500,000) of children under five are stunted. While net enrollment in primary education increased from 82% in 1997 to 97% in 2016, lower secondary completion rates, at 57% in 2017, are significantly below the average for lower middle-income countries. As of 2015, 25% of Cambodia’s population (3.8 million people) do not have access to improved water, and 44% (6.8 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 are essential. 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 to meeting the evolving needs of citizens and the private sector.  And quality of human capital will be of utmost importance to achieve Cambodia’s ambitious goal of reaching middle-income status by 2030.

    Last Updated: Sep 25, 2019

  • 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. 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. In the following partnership programs, increasing focus has been placed on governance reforms, macroeconomic stability and sustainable economic growth, livelihoods support, and improving and expanding health and education services. Across the program, WB supports citizens’ engagement, particularly to enhance government transparency and accountability.

    Following the Cambodia Country Engagement Note, which was endorsed by the World Bank Group Board of Executive Directors in May 2016, the World Bank Group conducted a Systematic Country Diagnostic (SCD) to identify challenges and priority development areas towards strong, inclusive and sustainable growth and shared prosperity in Cambodia.

    Drawing from the analysis and broad consultations with civil society, academia and development partners, the SCD identified three pathways for development:

    • Enhancing export competitiveness and economic diversification to sustain strong growth and create jobs
    • Building human assets to facilitate economic mobility and shared prosperity
    • Ensuring a more sustainable growth pattern by investing in natural capital, climate resilience, and sustainable urban development

    The World Bank supports these development pathways through investment projects in education, health and nutrition, roads, improved livelihoods, agriculture diversification, water resource management, disaster risk management, and community-level service delivery.

    Knowledge agenda is a significant part of the World Bank’s engagement in Cambodia. Advisory Services and Analytics (ASA) on Social Accountability, Public Sector Performance and Service Delivery, Urbanization, Economic Diversification, Equitable Access to Quality Health and Nutrition services, Environmental Sustainability and Resilience, and Jobs has strengthened the understanding of development challenges facing Cambodia and fostered the dialogue on development policy issues with a broad range of stakeholders.

    On May 30, 2019, the World Bank Group’s Board of Executive Directors endorsed the Country Partnership Framework (CPF) for Cambodia for FY19 – 23. The new five-year strategy is closely aligned with the fourth phase of Cambodia’s Rectangular Strategy for Growth, Employment, Equity and Efficiency, and it will support Cambodia’s progression to the next stage of development. The three focus areas of the CPF are:  promote state efficiency and boost private sector development, foster human development, and improve agricultural productivity and the sustainable use of natural resources. 

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

    The first focus area - 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.

    The second focus area - fostering human development also includes three objectives:

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

    The third focus area - 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 critical cross-cutting theme - strengthening governance, institutions and citizen engagement - underpins the strategy and will be embedded in all World Bank Group activities.

     

    Last Updated: Sep 25, 2019

  • The World Bank has been engaged in the education sector in Cambodia through Bank-administered programs funded by the Global Partnership for Education as well as other development partners. In addition to granting scholarships to students and training teachers, these programs also supported building schools and establishing early childhood education programs. By July 2017, 38% of children between 3 and 5 years old have enrolled in urban and rural districts where 100 formal and 500 community-based new preschool facilities were provided, 3,861 community early childhood education teachers and mothers have been trained and more than 125,337 students between 3-5 years old directly benefited from project activities.

    The Higher Education Quality and Capacity Improvement project, which was completed in September 2017, provided about 1,000 students scholarships and 64 public and private school professors/staff were able to complete their studies overseas. A total of 45 research grants were issued to support teaching and learning. To find solutions to local problems, 78 overseas programs and 254 local training programs were conducted for more than 10,000 higher education leaders, managers and teachers to improve the quality of Cambodia's education.

    The Secondary Education Improvement Project (SEIP) aims at strengthening school-based management, upgrading the qualification of lower secondary school teachers, and improving school facilities through construction and rehabilitation of 100 existing schools and construction of 30 new schools. Despite the project has been implemented for year one, it shows numbers of results. It benefited more than 19,500 teachers and students; there have been over 17,000 enrolled students in 350 newly-constructed lower secondary schools; 100 targeted secondary schools have developed their school improvement plans with support from national core trainers and more.  

    The Health Equity and Quality Improvement Project (HEQIP) combines financing from the Royal Government of Cambodia, with the World Bank and other development partners (Australian Department of Foreign Affairs and Trade, German KfW, Korea International Cooperation Agency, and Japan), to improve coverage and quality of health care services throughout Cambodia. HEQIP is the third in a series of World Bank-supported health projects that have helped to expand the health facility network, supplied medical equipment, financed technical and institutional capacity improvement and provided better sanitation and water quality in health facilities.

    The Health Equity Fund (HEF) system now supports free access to over 2.6 million outpatient visits and approximately 190,000 hospital admissions 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 to health facilities, are deposited electronically and in a timely manner into health facilities’ bank accounts. This has changed the empowerment and accountability paradigm, where additional resource availability has facilitated facility-level decision-making and ensured vital funding for maintenance of equipment and infrastructure and for dealing with unexpected shortages of drugs and consumables. Beginning of 2018, the HEF system is being expanded to informal workers, with the aim of covering approximately 2 million in that sector.

    Hospital staff collectively and individually signed contracts that set annual performance targets, and achievement of these targets triggered payment in the form of Service Delivery Grants. Targets were revised annually to drive further improvements in service delivery. As results, the number of health centers scoring more than 60 percent on quality assessments rose from only 49 in 2016 to 442 in 2018.

    Through the Voice and Action Project, the World Bank and other development partners are supporting NGOs to improve the quality of service delivery by Commune Councils, Health Centers, and primary schools. The Implementation Plan for Social Accountability (ISAF) currently covers 75% of Cambodia’s provinces, 62% of districts and 56% of communes. ISAF covers 572 out of 1,191 health centers across the country and 1,422 out of Cambodia’s 7,000 primary schools. It also hires more than 3,650 Community Accountability Facilitators to help mobilize their communities to learn about public services, provide feedback to service providers, and to take action to improve service quality. By the end of 2017, more than 11,280 Joint Accountability Action Plans (JAAPs) were developed jointly between service providers and community members in targeted communes, and 64% of JAAPs’ activities have been implemented to improve public service delivery.

    The World Bank has supported the government to improve regulations and policy reforms in the water and sanitation sector. After a two-year pilot of decentralized rural sanitation service delivery, the World Bank continued to provide technical assistance to fifteen districts in three provinces. By December 2018, 30,498 households in the targeted districts had gained access to improved sanitation, representing an eight-percentage point increase per year. The government has increased resources to the districts and expedited efforts to scale up the decentralization of rural sanitation functions. The Bank supported the government in the development of a water supply monitoring system to help improve the government’s regulatory capacity and to encourage water supply operators to improve their services and water quality. Data for over half of the 245 water operators in Cambodia are now available in the monitoring system.

    In the transport sector, the World Bank-financed Road Asset Management Project (RAMP) helped rehabilitate 470 kilometers of Cambodia’s national and provincial road network with improved climate resilience and road safety as part of the rehabilitation process. As a result, travel time has been 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.

    The Land Allocation for Social and Economic Development Project LASED II, which was approved in May 2016, has helped to improve access to agricultural resources, infrastructure and social services for many citizens in rural communities. Through the project, the government has allocated 17,000 hectares of residential and agriculture farm land to 5,010 landless and land-poor families. So far,  3078 land titles have been distributed to the 1,825 poorest families. Beneficiaries have received basic shelter materials and other in-kind assistance, such as an initial six-month food aid, to help with settling-in process. The project provides roads, builds access tracks to the agriculture plots, and delivers infrastructure for household water supply. The project also builds schools and health posts, which are accessible both to project beneficiaries and to the wider community. The project also provides improved agriculture extension services, enabling beneficiaries to make the best use of the land and engage in agriculture activities as well as foster more sustainable community development. It also helped. Access to land for the poor or landless families has been and continues to be an important aspect of reducing poverty in Cambodia’s rural areas. 

    Last Updated: Sep 25, 2019

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LENDING

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

*Amounts include IBRD and IDA commitments



PHOTO GALLERY

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In Depth

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Improving Education Quality

Improving lower secondary education to meet minimum standards is the goal of a World Bank-supported project in Cambodia.

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Early Childhood Education

In Cambodia, over 1,400 preschools run by communities are helping children aged three to five to study.

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Cambodia’s Health Journey

Cambodia has made great strides in healthcare with maternal and child mortality vastly reduced.

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Raising Reading Scores in Cambodia

Emerging from years of political turmoil, Cambodia has improved language acquisition, especially in the early school grades.

Additional Resources

Country Office Contacts

Phnom Penh
Exchange Square Building, No. 19-20, Street 106, Sangkat Wat Phnom, Khan Daun Penh, Phnom Penh
Tel: +855 23 261300
Fax: + 855 23 261301-2
cambodia@worldbank.org
Washington
1818 H Street NW, Washington, DC 20433 Tel: +1 202-473-4709
eastasiapacific@worldbank.org