A report released by Oxfam on October 26 stated that Cambodia has made progress in its efforts to reduce inequality in three key areas – public services, tax collection, and workers’ rights and wages – even with the Kingdom facing the Covid-19 crisis.
The Global Inequality Index 2020 ranks the Kingdom eighth out of the 10 ASEAN member states, with Cambodia rising to 111th out of 158 countries this year from 121st in 2018.
“In 2018, the index ranked Cambodia at 121 out of 158 countries, and today Cambodia has climbed to 111. The increase in rank demonstrates the positive progress that Cambodia has made in policies on public services, tax and workers’ rights. These are three areas that are essential to reducing inequality and weathering the Covid-19 storm,” Oxfam said.
The report continued that among lower-middle income countries, Cambodia has established itself as one of the leading nations on taxation policies, showing increased progressivity, particularly on personal income tax.
It said that regarding labour rights and the minimum wage, despite improvements in the minimum wage, it remains relatively low when compared to other countries in the region, such as Myanmar or Thailand, and the cost of living.
Concerning investment in public services, including spending on healthcare and social protection, Cambodia ranked comparatively low, maintaining a similar position to 2018, the report added.
“In the last few decades, Cambodia has made tremendous progress in poverty reduction lifting millions of people out of extreme poverty. This exemplary achievement was possible by a combination of economic development efforts and increasing public service delivery to the poorest communities,” it said.
The Covid-19 outbreak, it added, “has highlighted new challenges for the Royal Government of Cambodia [RGC]; to contain the pandemic on the one hand, and to respond to its economic impacts on the other hand”.
“The RGC has already generated incredible momentum to drive social development, and there is confidence that further investment in social protection will enable it to promote more inclusive and shock-responsive coverage for its citizens for years to come,” the report said.
Ministry of Economy and Finance spokesman Meas Soksensan told The Post on October 27 that the government has made great efforts to keep the poor away from the poverty gap, with the government addressing the issue in a timely manner, especially during the Covid-19 crisis.
“When there is a crisis, there are many people who fall into poverty, but the government has tried not to widen the poverty gap. At the same time, our ministry has considered everything regarding the national budget to alleviate the social gap, although it is inevitable that there will be a social gap.
“Despite reductions in various areas in the national budget package this year, we did not reduce social protection. The government is very concerned about this issue,” Soksensan said.
Cambodian Institute for Democracy president Pa Chanroeun on October 27 said while he acknowledged the government’s efforts in improving these three key areas, they were still limited, such as fully meeting the cost of public services.
“We found that it had been okay, but after the outbreak the government reduced public service budgets by up to 50 per cent, which has severely affected the ability to provide services to people, such as education in both urban and rural areas,” Chanroeun said.
Chanroeun added that on workers’ rights, despite many developments and improved conditions, some workers faced the risk of losing their jobs due to the effects of Covid-19 and the suspension of certain parts of the EU’s Everything But Arms (EBA) scheme.
“The solution is for the government to find ways to maintain the market for factory workers, especially by not losing EBA,” Chanroeun said.