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After more than 2 decades of isolation and conflict that ended in 1991, much has been achieved in Cambodia in recent years. Cambodia has made important progress in ensuring peace and security, rebuilding institutions, establishing a stable macroeconomic environment, and putting in place a liberal investment regime. Notwithstanding these achievements, much remains to be done. Although a robust annual gross domestic product growth of more than 7% during the last decade has led to a steady decrease in poverty, its incidence, at 34.7%, remains high.
Recent economic growth—mostly centered on garments and tourism—are urban-focused, with limited linkages to the rural economy where 91% of the poor people live. This has led to a rapid increase in inequality over the past decade. There remains a pressing need to diversify the economy to enable the rural poor to contribute to and benefit from economic growth. Achieving some of Cambodia’s Millennium Development Goals (CMDGs) related to human development will also remain a challenge.
With peace and macroeconomic stability now more firmly entrenched, the country has the opportunity to make far-reaching economic reforms to achieve sustained socioeconomic development. Within this context, the Government has developed a comprehensive reform agenda aimed at achieving the CMDGs, which is embedded in the National Strategic
Development Plan (NSDP) 2006–2010.
As of 31 December 2005, Cambodia has received $850.24 million for 
36 loans (28 projects and 8 programs), $71.2 million for 14 grant projects, and $85 million for 133 technical assistance projects, \ since joining the Asian Development Bank (ADB) in 1966. The majority have been provided since operations resumed in 1992.
The Country Strategy and Program (CSP) for 2005–2009 was approved in February 2005, with an operational focus on
In addition, the CSP has a geographical focus on the Tonle Sap Basin and a subregional focus on the Greater Mekong Subregion (GMS) Program.
The focus of the lending program during the current CSP period will be on NSDP priorities—agriculture and water resources, infrastructure (mainly transport and energy), financial sector development, and education.
The Country Strategy and Program for 2005–2009 can be found at www.adb.org/Documents/CSPs.
Over the past decade, ADB has worked closely with the Government to rehabilitate the economy and pursue sustainable socioeconomic development. In the area of infrastructure provision, transport projects—including the Phnom Penh–Ho Chi Minh City Highway and the restoration and improvement of primary and secondary roads—have contributed to enhanced market access and opportunities for economic development by reducing travel time and transport costs.
In the power sector, the Power Rehabilitation and Provincial Power Supply Project has provided reliable power and new power connections to nearly 42,000 households. The Rural Infrastructure Improvement Project has helped provide incomes to more than 300,000 workers and to enhance mobility and employment opportunities for the rural poor.
In the education sector, a series of ADB’s lending and nonlending assistance, such as the Education Sector Development Program, has contributed to improving primary school enrollment and completion rates and to eliminating gender disparities in access to primary education.
While assistance to all these sectors continues, recent potentially high-impact interventions include the $18 million Rural Water Supply and Sanitation Project, approved in 2005, which aims to enhance the health of low-income communities in rural areas by improving hygiene and sustained access to safe drinking water and improved sanitation.
ADB has been a major development partner for Cambodia in the banking sector, particularly in banking supervision. The Financial Sector Program Loan has helped to create more robust and better regulated banking institutions, which resulted in increased public confidence in and greater borrowings from the banking system.
Cambodia has both contributed to and benefited from the GMS Program. The program has given member countries the opportunity to develop a shared vision of the future development of the subregion. It has also provided important infrastructure projects and helped mobilize cofinancing, which contributed to the connectivity and competitiveness of individual member countries as well as the GMS as a whole.
Important forthcoming assistance in 2006 includes a second phase of Support to Local Administration (for $7.8 million) in the form of a grant to promote good governance and participation at the commune level. Also in the pipeline is the $35 million Transport Infrastructure and Maintenance Project to provide greater access to markets.
In 2007, ADB plans to provide the Tonle Sap Lowland Stabilization Project a $20 million grant assistance for rural development, poverty reduction, sustainable management and conservation of natural resources, and alternative livelihoods development, which is losely in line with the Government’s NSDP.
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| *Includes loans and technical assistance (as of 31 December 2005). |
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ADB’s overarching goal in Cambodia is sustainable poverty reduction. The binding constraints to poverty reduction remain numerous, and include a narrowly based economic growth, limited access to and poor quality social services, landlessness, lack of access to natural resources, social exclusion, poor governance, and endemic corruption. The key development challenges include increasing opportunities for economic advancement, improving livelihoods and reducing vulnerability, and facilitating participatory governance at all levels.
Given the wide range of development issues to be addressed in Cambodia, the full range of ADB’s operational and financial instruments will be employed to support the CSP and NSDP. Current Asian Development Fund (ADF) allocation for Cambodia is about $85 million for the biennial period 2007–2008. As a poor debt-stressed country, Cambodia can receive up to 50% of its total ADF assistance in the form of grants under the ADF IX grants allocation framework.
External assistance has contributed to the implementation of all major public sector development projects in Cambodia. From 1992 to 2003, official development assistance (ODA) disbursements to the country reached $5.2 billion, with 28% from multilateral sources, 64% from bilateral sources, and 8% from nongovernment organizations (NGOs). Grants account for 80% of ODA. At the Consultative Group meeting successfully completed in early March 2006, participants agreed to increase pledge from $504 million to $601 million for 2006 (with ADB’s pledge of $88 million overall).
The Government, in close cooperation with leading development partners including ADB, has actively promoted greater harmonization between partners and improved alignment of their assistance programs with the Government’s core development strategy. An action plan on harmonization and alignment, which was prepared with the assistance of development partners, has served as the principal framework for improving coordination. ADB, the World Bank, the United Kingdom’s Department for International Development, and the United Nations system have been closely cooperating and coordinating on country strategies and policy dialogue to reduce transaction costs to the Government, and to enhance aid effectiveness.
ADB cooperates extensively with civil society organizations in Cambodia to strengthen the effectiveness, quality, and sustainability of the services it provides. For example, ADB-financed a project proposed by the Ministry of Health to contract NGOs to manage a district-level public health care system using a results-based contract to monitor progress. The project proved an efficient and effective means to increase health care coverage rates and better target primary health care services to the poor. ADB has also provided support to the Cambodian Disabled People’s Organization to address the needs of women living with disabilities by developing networks of support for them, and assisting them to benefit from available technical and training resources.
On a per capita basis, Cambodia has received significantly more ODA than other low-income countries in the past decade. Aid inflows were mainly used to improve health and education, rebuild physical infrastructure, and build institutional capacity. Given Cambodia’s substantial financial needs, its limited capacity to mobilize domestic revenues, and the narrow private sector base, the country will continue to depend heavily on ODA in the medium term.
ADB’s cofinancing operations enable its development partners—governments or their agencies, multilateral financing institutions, commercial organizations, and export credit agencies—to join ADB in financing its lending to developing members. For every US dollar lent by ADB in Asia and the Pacific during 2005, cofinancing operations brought in an additional $1.27. Such additional funds are provided in varying forms of grants, guarantees, or loans.
A summary of loan projects with cofinancing is available at www.adb.org/documents/Fact_Sheets/Cambodia/cofinancing.asp.
A summary of procurement contracts awarded to companies and consultants from Cambodia for goods and related services, civil works, and consulting services can be found at www.adb.org/Documents/Fact_Sheets/Cambodia/procurement.asp.
Cambodia is the 29th largest shareholder among regional members and the 37th largest overall.
| Joined | 1966 |
| Shares held | 1,750 (0.049%) |
| Votes | 14,982 (0.338%) |
Stephen Sedgwick is the Executive Director and Richard Moore is the Alternate Executive Director representing Cambodia on the ADB Board of Directors.
Arjun Goswami is the ADB Country Director for Cambodia. The Cambodia Resident Mission (CARM) was opened in 1996 and provides the primary operational link between ADB and the government, private-sector, and civil-society stakeholders in its activities. CARM engages in policy dialogue and acts as a knowledge base on development issues in Cambodia.
The Cambodia government agency handling ADB affairs is the Ministry of Economy and Finance.
ADB is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 67 members—48 from the region. In 2005, ADB operations totaled $7.4 billion in loans, equities, guarantees, grants, and technical assistance. With headquarters in Manila, ADB has 26 offices around the world and more than 2,000 staff from over 50 countries.
Cambodia Resident Mission
29 Suramarit Boulevard (268/19)
Sangkat Chaktomuk, Khan Daun Penh
Phnom Penh, Cambodia
P.O. Box 2436
Tel +855 23 215805/215806/216417
Fax +855 23 215807
adbcarm@adb.org
www.adb.org/carm
ADB Headquarters
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
Tel +63 2 632 4444
Fax +63 2 636 2444
information@adb.org
Ministry of Economy and Finance
Street 92, Sangkat Wat Phnom
Khan Daun Penh, Phnom Penh, Cambodia
Tel +855 23 427783
Fax +855 23 427798/361616/360139/426908/428424
Asian Development Bank
www.adb.org
Country website
www.adb.org/cambodia
Asian Development Outlook
www.adb.org/Documents/Books/ADO/2006/documents/cam.pdf
Annual Report
www.adb.org/Documents/reports/annual_report/2005/
Depository Libraries
www.adb.org/Publications/Depositories/cam.asp
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In this publication, “$” refers to US dollars.
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