The United Nations DevelopmentProgramme (UNDP) launched Cambodia’s first development finance assessment (DFA)report at a virtual event held on 16 July 2021. The event was presided by H.E.Ros Seilava, Secretary of State, Ministry of Economy and Finance (MEF), and wasattended by 64 participants representing the MEF and other line ministries, UNagencies, development partners, businesses, research institutes and civilsociety organisations.
The publication of Cambodia’s DFAfollows the launchin April 2021 of the country's integrated national financing framework (INFF) developmentprocess with support from the Joint SDG Fund. The DFA looks specifically at the various financial resourcesavailable to support development in the country – from public budgets, theinternational community, private investors and remittances.
The findings, projections andrecommendations of the DFA provide important inputs for the INFF process and thedevelopment of a financing strategy that will inform decision-making for theallocation and sourcing of funds to reach Cambodia’s Sustainable DevelopmentGoals (SDGs) and national development priorities.
Like most countries, the pandemic triggered setbacks in Cambodia. The economycontracted by 3.1 per cent in 2020. Losses in financing flows totalledUS$3.6 billion in 2020 (Figure 1).The most severely impacted financial sources were domestic revenue, foreigndirect investment (FDI) and private domestic investment.
Cambodia developed a post-Covid economic recovery plan for 2021-2023 tochart a path for sustainable and inclusive recovery based on three strategicdirections: economic recovery, reforms and building resilience. To achieve thisambition, a corresponding investment plan is crucial.
“Going forward, it's very difficult in terms of what to prioritise,” saidH.E. Serey Chea, Assistant Governor and Director-General of CentralBanking at the National Bank of Cambodia. She cautioned that the country isexperiencing considerable pressure on its spending. “If the government has to tackle all these challenges at the same time,we will need different sources of funding.”
The DFA is therefore timely. "This report is particularly relevant consideringthe implementation of economic and social measures by the Royal Government ofCambodia to respond to Covid-19,“ said H.E. Seilava. The government’sthree-year post-COVID economic recovery plan will be launched soon and isprimarily funded by public resources, but the plan will also explore other possiblefinancing sources. “I am hoping this report will provide insights on thedifferent financing options available,” continued H.E. Seilava.
