Cambodia is fronting more money for its own development financing according to a new report from the United Nations Development Programme (UNDP).

“Cambodia’s Development Finance Assessment” analyses the composition and trends of all the Kingdom’s financial inflows. It covers public and private, national and international sources, estimating the amount of financing available for the country’s development through 2025.

The report also looks at the impact the Coronavirus pandemic has had on cutting funding inflows.

It found that domestic revenue made up 19 percent of gross domestic product (GDP) in 2020 and is likely to rise to 22.5 percent by the end of 2025.

Official Development Assistance was estimated at around 7.9 percent of GDP but the report found that its composition has shifted towards loans with less concessional terms.

Covid-19 has led to losses in funding of around $3.6 billion, accounting for 19.8 percent of the total for 2020. Domestic revenue, foreign direct investment and private domestic investment have been hit hardest.

The UNDP called on the government to come up with a series of financing policy innovations to boost the capacity of the state to manage public finances and continue to secure high levels of private funding.

UNDP Cambodia Resident Representative Nick Beresford said financing will improve once the pandemic has passed.

“This is the first time a complete picture of all Cambodia’s expected financial inflows has been modelled with such precision. Once we are able to ease Covid-19 restrictions, we can expect a strong growth in development finance flows. Within those flows, domestic sources are becoming increasingly important,” he said.

“Cambodia can expect to graduate from Least-Developed-Country status towards the end of the 2020s. The time to prepare new sources of financing is now, as this report makes clear. For example, being able to issue bonds in Khmer riels, is an option being considered and one strongly supported by UNDP,” Beresford added.

The Secretary of State at the Ministry of Economy and Finance Ros Seilava welcomed the report.

“It is another contribution of UNDP to provide evidence-based policy recommendations for the RGC Royal Government of Cambodia),” he said.

Seilava said the government is working on a post-Covid economic recovery plan, covering the next three years. It will be financed by public resources while also considering mobilising additional resources from other financing options, he added.

• Tags: Development, financing