A study published on Monday by the UN Development Programme (UNDP) said the Covid-19 pandemic has been a catalyst for the large-scale development of Cambodia’s social protection schemes.
It said the Kingdom should be able to reduce the poverty rate to below three per cent at a price tag representing at most 1.5 per cent of its gross domestic product (GDP).
The report, entitled Meeting the Cost and Maximising the Impact of Social Protection in Cambodia, said the government’s cash transfer programme represented a political and institutional development that could pave the way for permanent, more effective and ambitious programmes.
“This would not only promote economic recovery but also open the way for the establishment of a social protection floor,” the report said.
It said Cambodia has achieved impressive rates of economic growth over the past 15 years while keeping income inequality in check. The poverty rate has fallen dramatically from about 50 per cent of the population in 2007 to below 10 per cent in 2016.
But social assistance was lacking in Cambodia, as there was no social protection floor for Cambodians living in poverty, the report said. In 2017, Cambodia introduced the National Social Protection Policy Framework, which demonstrated a political commitment to fixing the issue.
The authors of the report raised two models of social protection as examples: either allocating cash transfers alone or providing a balance of cash and asset transfers, so-called graduation-based programmes.
“Whichever social assistance programme Cambodia chooses to implement, we estimate that it will cost approximately $80 million in current terms to halve the incidence of poverty, allowing 500,000 Cambodians to meet their subsistence needs,” the report concluded.
It said even if the cash transfer programme was temporary, it promised to achieve significant poverty reduction in both rural and urban settings. For as long as it lasts, the new emergency social protection scheme created in response to Covid-19 could lift over one million Cambodians out of poverty and improve the livelihoods of many more.
“This represents an unprecedented political stance and institutional progress towards more permanent and ambitious programmes, including towards the establishment of a social protection floor,” the report said.
Cambodia’s budget surplus in 2018 was approximately $150 million. If it was used for social safety nets, it could close the poverty gap, it said.
Nick Beresford, UNDP Cambodia’s resident representative, said the report showed that providing a social protection floor would effectively reduce poverty rate to below three per cent. In normal times, it was entirely affordable for Cambodia, he said.
Government spokesman Phay Siphan said Cambodia pays high attention to the livelihood of the poor and the vulnerable, particularly as the country is facing the impacts of Covid-19. The government is also investing in the agriculture sector to help farmers after the Covid era passes.
He said the Ministry of Social Affairs, Veterans and Youth Rehabilitation is implementing the social protection programmes.