Logo of Phnom Penh Post newspaper Phnom Penh Post - ADB approves $250 million Covid-19 loan




ADB approves $250 million Covid-19 loan

Content image - Phnom Penh Post
ADB president Masatsugu Asakawa said the pandemic threatens to undermine Cambodia’s progress in poverty reduction. ADB

ADB approves $250 million Covid-19 loan

The Asian Development Bank (ADB) on Wednesday approved a $250 million loan to help the Cambodian government respond to the Covid-19 pandemic by strengthening the healthcare system and increasing social assistance to the poor and vulnerable.

An ADB press release said the loan provides economic stimulus to businesses, including small and medium-sized enterprises.

“This assistance will help the government mitigate the adverse health, social, and economic impacts of the pandemic.

“Cambodia is highly vulnerable to the negative impacts of Covid-19 due to its open economy, narrow economic base, and highly mobile population.

“The ADB expects Cambodia’s economy to contract by 5.5 per cent in 2020 due to the decline in tourism; lower exports of garments, footwear, and travel goods; and a slowdown in construction activity. The downturn risks push an additional 1.3 million people into poverty,” it said.

Cambodia launched a comprehensive response to Covid-19 in March, with an initial package totalling $815.7 million, or 3.2 per cent of projected gross domestic product (GDP) in 2020.

It included health system support to prepare for a potential surge in cases and to sustain workers and enterprises during the pandemic. It also included a capital injection of $150 million to support bank lending to small and medium-sized businesses.

The stimulus package further includes $300 million for delivery of cash grants to poor and vulnerable households in the government’s ID Poor database. This database has 2.4 million poor households and is being expanded to include those that have been impacted by Covid-19, said the press release.

ADB president Masatsugu Asakawa said Cambodia has a record of sound macroeconomic management, but Covid-19 threatens to undermine progress in poverty reduction, especially among vulnerable groups such as women and migrant workers.

“This loan is part of the ADB’s long-term engagement plan that focuses on supporting Cambodia’s economic recovery and fiscal sustainability,” he said.

The ADB’s Covid-19 Active Response and Expenditure Support (Cares) Programme is funded through the Covid-19 pandemic response option (CPRO) under the ADB’s Countercyclical Support Facility.

CPRO was established as part of the ADB’s $20 billion expanded assistance programme for developing member countries’ pandemic response, which was announced on April 13.

Government spokesman Phay Siphan told The Post on Wednesday that he was unaware of the ADB loan in detail or for what purpose the loan would be used.

He said overall government spending falls into two categories – current spending and development spending.

“First is current spending for which we have enough. There is no problem in paying salaries. The second is investment spending on public services.

“We have stopped some investment spending because of the Covid-19 crisis. Besides, we need money to be released to other areas as needed to help the private sector stabilise the economy,” he said.

MOST VIEWED

  • First Khmer woman to pass out of West Point

    The life of a soldier certainly isn’t for everyone. The training is gruelling, the hours long and there’s no room for excuses. On top of that, soldiers must be ready to respond to sudden threats at a moment’s notice. Just ask Sithyka

  • Tourists urged not to skip trip

    The Ministry of Tourism has called on international tourists not to cancel trips to Cambodia, but urged them to adhere to several dos and don’ts when arriving in the Kingdom during the Covid-19 pandemic. The ministry released an eight-point instruction manual on Wednesday published

  • The taxman cometh – Cambodia’s capital gains tax casts the net on individual taxpayers

    In a country where only limited personal income tax existed, the new taxation law beginning January 1, 2021, will make taxpayers out of Cambodians, whether they are ready for it or not About two years ago, a little known amendment was made to Article 7 of the Law

  • Cambodian-American gets Star Trek treatment

    Kevin Ung, a Cambodian-American whose family escaped genocide during the Khmer Rouge’s reign of terror, was recently selected from thousands of applicants to participate in the Television Academy Foundation’s inaugural 2020 Star Trek Command Training Programme, a course intended to give hands-on filmmaking experience

  • Cambodia seeks to be transport hub

    Cambodia is working on several fronts to modernise its transport infrastructure and services, concentrating on opening new international gates to relieve and balance traffic congestion at its borders, Minister of Public Works and Transport Sun Chanthol said on Thursday. This is part of the Kingdom’

  • Deminers unearth ancient lion statue

    Cambodia Mine Action Centre (CMAC) director-general Heng Ratana told The Post on Tuesday that a statue of a lion was found by mine clearance experts while they were digging for a development project. It was sent to the Ministry of Culture and Fine Arts last