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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 remained strong, estimated to have reached 7.1% in 2019, after the better-than-expected growth rate of 7.5% in 2018.

    The global shock triggered by the COVID-19 pandemic has significantly impacted Cambodia’s economy in 2020 at a time when Cambodia also faces the partial suspension of preferential access to the EU market under the “Everything but Arms” initiative. The outbreak caused sharp deceleration in most of Cambodia’s main engines of growth in the first quarter of 2020, including weakened tourism and construction activity. Growth is projected to slow sharply to 2.5 percent in 2020 under the baseline scenario. The COVID-19 outbreak and slow recovery in global economic activity alongside prolonged financial market turmoil pose risks to Cambodia’s growth outlook.

    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, especially quality, 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 lag behind lower middle-income countries. 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. An estimated 1 in 3 children under the age of five suffer from stunting and only 36% of children between three and five years old are enrolled in early education.

    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 2017, 21% of Cambodia’s population (3.4 million people) did not have access to improved water, and 34% (5.4 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 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: Apr 17, 2020

  • 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 subsequent 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, the Bank supports citizens’ engagement, particularly to enhance government transparency and accountability.

    Following the Cambodia Country Engagement Note, which was discussed  by the World Bank Board of Executive Directors in May 2016, the World Bank Group conducted a Systematic Country Diagnostic (SCD) to identify challenges and priority development areas to achieve 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 Group’s new 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. The three focus areas of the CPF are to:  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—includes two 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 is embedded in all World Bank Group-financed activities.

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

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

    Last Updated: Apr 17, 2020

  • The World Bank has been engaged in the education sector in Cambodia. Three education projects have been recently completed. The Second Education Sector Support Project granted scholarships to poor students, trained teachers, built primary schools, and established early childhood education programs and community-based centers. By the end of the project in 2017, 38% of children between 3 and 5 years old enrolled in 100 formal and 500 community-based preschool facilities supported by the project, 3,861 community early childhood education teachers and mothers were trained, and around 125,337 students between 3-5 years old directly benefited from project activities.

    The Higher Education Quality and Capacity Improvement Project, completed in September 2017, provided scholarships to around 1,000 students to pursue their tertiary education locally and 64 public and private university professors/staff to continue their studies overseas. The project also supported 78 overseas and 254 local training programs for more than 10,000 higher education leaders, managers and lecturers to improve the quality and relevance of Cambodia's higher education. In addition, 45 research grants were awarded to researchers to set up and conduct their research activities.

    Early Childhood Care and Development (ECCD) for Floating Villages Project, completed at the end of 2019, constructed seven ECCD centers, four onshore and three floating, in flood-prone areas.  Community-Based (CB) and Home-Based (HB) ECCD program activities benefitted 909 and 9,591 of 0-5 year-olds, respectively. It also trained 7,992 parents and hundreds of teachers and district officers.

    There are two active projects: the Secondary Education Improvement Project (SEIP) aims to strengthen school-based management; upgrading the qualification of lower secondary school teachers, school leaders and educational staff; and improving school facilities through construction and rehabilitation of 100 existing schools, construction of 30 new schools and equipping laboratory facilities at 100 targeted schools. Despite the project has been implemented for two and a half years, the project has benefitted 25,865 students, teachers, and educational staff at national and sub-national levels.

    The Higher Education Improvement Project (HEIP) aims to improve the quality and relevance of higher education and research mainly in science, technology, engineering and mathematics (STEM) and agriculture and to improve governance in the sector. Specifically, HEIP is working to improve the quality of teaching and learning by improving the curriculum, teaching pedagogy, staff qualifications, teaching and learning facilities, and linkages with industry to ensure consistency with the job market. The project is also using grants to promote the development and implementation of research projects in STEM and agriculture.  

    The Health Equity and Quality Improvement Project (H-EQIP) is working to improve the coverage and quality of health care services throughout Cambodia. H-EQIP is the fourth in a series of World Bank-supported health projects that have helped to expand the health facility network, supplied medical and laboratory equipment, supported equity and financial protection for the poor, financed technical and institutional capacity and quality of care improvement, including improving infection prevention and control,  and provided better sanitation and water quality in health facilities.

    The Health Equity Fund (HEF) system, part of H-EQIP, now supports free access to almost 2.9 cases, including 2.58 million outpatient visits, approximately 159,000 hospital admissions, over 76,000 emergency care cases and 37,500 cases of delivery 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. In 2018, the HEF system was expanded to include informal workers, and in 2019, it began provided cash transfers to poor families to support the first 1,000 days of life starting from pregnancy until a child is about two years old.

    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 take action to improve service quality. By the end of 2017, more than 11,280 Joint Accountability Action Plans (JAAPs) were developed by service providers and community members 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 15 districts in three provinces. By December 2019, nearly 54,000 households in the targeted districts had gained access to improved sanitation, representing an eight-percentage point increase per year. The Bank-financed Water Supply and Sanitation Improvement Project is also supporting investment in water supply in lagging areas and in improving wastewater collection and management in Siem Reap city.

    In the water resources management sector, the World Bank-supported Mekong Integrated Water Resource Management Project has supported the government in establishing the key foundation for effective water resources and fishery management. So far, 70 community fisheries have been established, 100 engine boats and related equipment have been distributed to Community Fisheries, and 330 out of 500 poor families have received a small grant to help diversify their sources of livelihoods.  The project has also established hydrological and meteorological monitoring stations, developed water resource modeling and river basin profiles, and constructed water resources monitoring facilities.

    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 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.

    In agriculture and infrastructure support, the Land Allocation for Social and Economic Development Project LASED II 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, 3,362 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.

    The Bank has been actively engaged in supporting public financial management (PFM) and public sector strengthening in Cambodia since 2006 beginning with two successive projects and various technical assistance programs. Ended in 2017, the Public Financial Management Modernization Project (PFMMP) has contributed to building an operational Financial Management Information System and improved domestic revenue mobilization capability. Currently, the Bank continues to provide support for improving PFM and service delivery through a programmatic technical assistance program funded by Multi-Donor Trust Fund with contribution 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 (P168407) 2019-2022. The technical assistance program aims to ease institutional bottleneck for service delivery by focusing not only PFM but also broader public sector reform programs of the government and covering four thematic areas:  strengthening budgeting, planning and expenditure management; performance systems for enhanced service delivery; supporting innovation, monitoring, and coordination; and just-in-time support. 

    Last Updated: Apr 17, 2020

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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

Improving Education Quality

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

Sewer Networks Improve Families’ Lives

In Cambodia, most domestic wastewater is left untreated with only 11% of households connected to a sewer network. Raising awareness on the importance of wastewater treatment is crucial.

Improving Capacity of Private Water Operators

From March 2018 to June 2019, the Cambodian Water Supply Association and the Ministry of Industry and Handicraft implemented a program to build capacity of 12 private water operators in Cambodia.

Parenting Programs Change Mothers’ Behavior

Mothers in Cambodia have attended a parenting training program to learn how to improve their children's learning, hygiene, nutrition, protection and care.

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