The Asian Development Bank (ADB) predicts Cambodia will suffer 390,000 job losses this year due to the Covid-19 pandemic. But it congratulated the government for its response to the crisis and its cash transfer programme for the poor and vulnerable.
Last Wednesday, the ADB approved a $250 million loan to further help the government respond to the pandemic.
In an interview with The Post on Wednesday, ADB country director Sunniya Durrani-Jamal said the concessional loan will have a 24-year term, including a grace period of eight years.
The loan will have an interest rate of one per cent per annum during the grace period, and 1.5 per cent thereafter.
Besides the loan, the ADB will provide grants to the Kingdom as well as technical assistance for its cash transfer programme.
Following the loan’s approval, Cambodia will be eligible for support under the $5 million Policy Advice for Covid-19 Economic Recovery technical assistance programme, Durrani-Jamal said.
“Cambodia is facing an unprecedented challenge from Covid-19. The recession in Cambodia will put pressure on poor and vulnerable groups and the ADB estimates that the coronavirus will lead to 390,000 job losses this year.
“Covid-19 will also exacerbate the vulnerability of the poor, given the limited diversification of income sources. Social protection will be crucial to preventing a large increase in poverty and we congratulate the government on creating a $300 million budget for cash transfers in its policy response,” she said.
The ADB’s financial support, she said, will be targeted at businesses, households and individuals that have been adversely affected by the crisis, with a special emphasis on poor and vulnerable groups.
She confirmed that the ADB and other development partners will work with the government to strengthen the implementation of the cash transfer programme.
“One of the things that we welcome about the government’s design of this programme is that it includes the “ID Poor On Demand” component. This means that people who suddenly lost their income because of Covid-19 can access financial assistance,” Durrani-Jamal said.
She suggested monthly expenditures for the programme will surpass $25 million as the number of beneficiaries increase. The ADB, she said, was ready to help when this happens.
Several countries and international development partners had financed tens of millions of dollars for Cambodia in response to Covid-19.
Ministry of Economy and Finance spokesman Meas Sok Sensan said the loan details will be released during the contract signing, which does not yet have a date.
People’s Centre for Development and Peace president Yong Kim Eng said the loan will help Cambodia’s economic recovery and take poor families out of poverty if it is spent wisely.
“The loan must be spent transparently and effectively. It must be clearly audited by other agencies or by all relevant stakeholders.
“Otherwise, our public debt will increase while the services or development projects are not effectively implemented. So, follow-up mechanisms and priorities must be set,” he said.