Policy Dialogue presentation

Doubling down on people-centered investments to
accelerate inclusive development and resilience to

uncertainties in Cambodia

Dr. Iván González de Alba
UNDP Senior Economist, Cambodia

September 12, 2022

1990 GNI PER CAPITA (2017 PPP$) Rapid socioeconomic transformation in Cambodia
1991
1992 4,500
1993 4,000
1994 3,500
1995 3,000
1996 2,500
1997 2,000
1998 1,500
1999 1,000
2000
2001 500
2002 0
2003
2004 LIFE EXPECTANCY AT BIRTH 1990
2005 1992
2006 751994
2007 70 1996
2008 65 1998
2009 60 2000
2010 55 2002
2011 50 2004
2012 2006
2013 MATERNAL MORTALITY RATIO 2008
2014 1,000 (DEATHS PER 100,000 LIVE BIRTHS) 2010
2015 2012
2016 800 2014
2017 600 2016
2018 400 2018
2019 200 2020
2020
20210

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2

1990 MEAN YEARS OF SCHOOLING 1990 Rapid socioeconomic transformation in Cambodia
1992
1992 61994
5 1996
1994 5 1998
4 2000
1996 4 2002
3 2004
1998 3 2006
2 2008
2000 2010
EXPECTED YEARS OF SCHOOLING 2012
2002 2014
12 2016
2004 12 2018
11 2020
2006 11
10
2008 10

2010 9
9
2012 8
8
2014 7

2016 HUMAN DEVELOPMENT INDEX (HDI)

2018 0.65
0.60
2020 0.55
0.50
1990 0.45
1991 0.40
1992 0.35
1993 0.30
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

3

Rapid socioeconomic transformation in Cambodia

Phnom Penh 1992
Phnom Penh nowadays

Credit: Mangomap.com https://mangomap.com/pgager2/maps/21430?preview=true#zoom=15&lat=11.557462&lng=104.93252 4
3&layergroups=pgager2%3A62212bea-f202-11e3-ac4e-22000b2f8216&bck=bingmap&permalink=true

The low-hanging fruit era is over

Economic growth by itself will not be enough to tackle prevailing socio-economic challenges

Some prevailing social challenges (%)

94.3
88.3

56.9 56.3

30.6
24.1
21.2
17.8

75+ with no pension Labour force Solid cooking fuel Inadequate housing Overcrowding Lack access to Lack access to clean Monetary poor
informality
(wood, charcoal, etc) materials adequate sanitation water

5

The new development model in Cambodia must be fit to
face current and emerging challenges

COVID-19 LDC graduation

War in Ukraine: fuel & Competitiveness,
food prices productivity &
employment
Disruption to value
chains Economic
diversification

Floods and other Climate change
natural disasters

6

Important lesson from COVID-19 & government’s response

Investing in people not only contributes to prevent people Poverty rate
from sliding back into poverty but also stimulates the
economy
GDP growth rate

Effect of social protection Effect of social
protection

7

The impact of the war in Ukraine

Preliminary results from macroeconomic modelling show people centred invetsments and other
economic stimulus are effective to mitigate the effects of the war in Ukraine in terms of GDP decline,
unemployment and poverty rate in 2022.

GDP Growth Unemployment Poverty rate

6.0 5.5 285,000 15.0
5.0 4.1280,000 14.8
4.0 3.9275,000 14.6
3.0 270,000 14.4
2.0 5.1265,00014.2
1.0 252,401260,00014.0
0.0 255,000 13.8
275,830250,00013.6
BAU 282,401245,000
240,000 BAU
264,009235,000
14.1

14.7
14.9

14.3

SIM 1 SIM 2 SIM 3 BAU SIM 1 SIM 2 SIM 3 SIM 1 SIM 2 SIM 3

8

IDPoor evaluation

Impact evaluation proved benefits at household level in terms of having enough food, cash savings,
less loans, school attendance and positive perception of national and local authorities.

9

Study on transitions in and out of poverty

Preliminary results from the study on determinants of poverty shows transition of people out of poverty, seem to be
associated with the urban location of households, more years of schooling, in particular secondary education attainment;
and higher concentration of employment in manufacturing and services, and away from elementary occupations; and with
more adequate living conditions in the dwelling.

Employment characteristics in 2014 and mobility trajectories 2014-2019 based on international thresholds, Cambodia

a. Distribution of workers across sectors of economic activity (%) b. Distribution of workers across occupations (%)

70 80

62.5 71.9

60 58.9 70 68.9

65.6

50 60

44.8 50

40 35.9

40

30 23.0 30 34.0 32.1
26.7 29.3
20.9

20 15.0 15.1 16.2

11.8 20 15.4
10.2 10.2
10 7.6 7.4 11.3 9.4 10.4 13.1
7.2 6.6 5.1 9.4
2.9 5.4 5.6 3.6 3.2 10 6.2 7.8
1.6 3.3
4.5
MPTC
0 Manufacture Construction Transport & Wholesale & retail Skilled services 0
AMEW hospitality

Craft/Manual workers Elementary Services/sales

Always extreme poor Always moderate poor Moved to vulnerability Moved to middle-class Always extreme poor Always moderate poor Moved to vulnerability Moved to middle-class

AMEW: Agriculture, mining, electricity, and water 10
MPTC: Managers, professionals, technicians, and clerical workers

AI for vulnerability mapping: preliminary findings

Bid data and digital technologies can inform Education Health
policy decision making on social protection,
with a multi-dimensional approach to progress

Living standard Monetary

11

Financing for Development

One of the main challenges to promote an inclusive, resilient and
sustainable development model in Cambodia, supported by a stronger
social protection system, is its financing. Seem imperative to diversify
and expand sources of financing for development in Cambodia.

12