A vendor sells vegetables at a local market in Phnom Penh last March. Heng Chivoan
Cambodia could potentially benefit from a $20.5 billion financial package for the Asia-Pacific committed by the Asian Development Bank (ADB), and use the funds to support its post-Covid-19 economic recovery, as extreme weather events compounded by a worsening regional food crisis and the still-ongoing Ukraine conflict threaten to derail progress.
The package is designed “to help Asia and the Pacific continue its recovery from the Covid-19 pandemic despite fresh economic headwinds and crises”, the Metro Manila-based multilateral lender said in an April 24 press release, adding that funding would come from its “own resources in 2022”.
“The $20.5 billion comprised loans and guarantees, grants, equity investments, and technical assistance provided to governments and the private sector. ADB mobilised an additional $11.4 billion in co-financing.
“ADB committed $6.7 billion in financing for climate mitigation and adaptation in 2022, making progress toward its ambition of providing $100 billion in cumulative climate financing during 2019-2030.
“To address the region’s worsening food crisis, ADB provided $3.7 billion under its $14 billion food security programme, delivering essential food relief for people most in need and strengthening food production systems,” the release said.
ADB president Masatsugu Asakawa is confident that the package will make meaningful contributions to the mitigation of economic risks in the Asia-Pacific and the stabilisation of commodity prices.
“Our support in 2022 helped our developing member countries [DMC] navigate the immediate impacts of these crises while bolstering their longer-term resilience in critical areas such as climate change and food security,” the release quoted him as saying.
The release noted that the bank “financed institutional reforms, strengthened public service delivery, and growth in key economic sectors” in a bid to bolster economic recovery.
“ADB’s $3.9 billion in commitments to the private sector included vital liquidity support to enterprises facing a difficult business environment.
“ADB is evolving to better meet the changing and complex needs of its DMCs … through an ongoing review of the bank’s capital adequacy framework, as well as structural and non-structural organisational reforms guided by a new operating model,” it said.
Asakawa voiced confidence that the reforms “will ensure ADB delivers greater impact in the region, including by scaling up climate financing, mobilising more private sector investment, and providing a wider range of development solutions in response to client needs”.
The release added that the lender also made “wide-ranging investments in quality infrastructure as well as in education, health, and other social sectors that contributed to building economy-wide resilience”.
“Promoting gender equality remained at the forefront of ADB’s work, with 97 per cent of the bank’s operations in 2022 contributing to this agenda. These operations included initiatives to improve women’s access to quality jobs, foster women’s entrepreneurship, and build women’s resilience to climate change,” it said.
As per the 2023 Law on Financial Management – also called the “budget law” – the government plans to spend 39.206 trillion riel ($9.6 billion) this year, $7.2 billion of which will be sourced from its revenues, $1.8 billion from loans, and $600 million from its savings.
At a late-January public forum, Ministry of Economy and Finance permanent secretary of state Vongsey Vissoth noted that external sources’ share of financing for government expenditure have dropped from “as high as 75 per cent” in 1995, to just over 17 per cent, which he hailed as a win in terms of self-sufficiency.
