Cambodia Launches Stimulus Package For Poor Hit by Coronavirus Outbreak

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cambodia-homeless-phnom-penh-covid-19-june-2020-crop.jpg A homeless man lays on the ground as a couple wearing face masks walks past in Phnom Penh, June 23, 2020.

Cambodia’s government on Wednesday launched an emergency cash transfer program for impoverished families hurt by the coronavirus pandemic, drawing the support of international donors, but criticism from observers who said the package is too small to be of much help.

In announcing the country’s first cash-transfer package, Prime Minister Hun Sen said it will provide funding to 562,686 families—or some 2.3 million Cambodians—who are classified as poor and vulnerable by the Ministry of Planning.

According to Hun Sen, the first round of the cash transfer will be distributed in the fourth week of the month in both June and July, at which point a government assessment will determine if it is still required, based on the situation of the outbreak in the country. If it is no longer deemed necessary, the remainder of the budget will be used to improve the economy, he said.

The government is expected to distribute around U.S. $25 million per month via the transfer, he said, but the public should not expect to rely on handouts forever.

“I would like to remind you that the stimulus package is for helping the poor who are being affected by the … pandemic, but we need to avoid creating a habit in which people solely rely on the government,” Hun Sen warned.

The prime minister said he is plans to spend U.S. $30-40 million to register the poor “to make sure that no one starves to death,” without elaborating.

The eligible recipients are made up of families classified as level 1 and 2 of the Ministry of Planning’s Identification of Poor Households (IDPoor) Program, who are further divided by whether they are urban or rural residents.

Level 1 families are from the suburbs of the capital Phnom Penh and will receive U.S. $30, including an additional U.S. $10 per family member and another U.S. $10 for any children under the age of five, people with disabilities, senior citizens, or those who are HIV/AIDS positive.

Level 2 families are from within Phnom Penh municipality and will also receive U.S. $30, with an additional U.S. $7 per family member from the remaining categories.

Level 1 and 2 families from rural areas will each get U.S. $20 per household and U.S. $6 and U.S. $4 for family members from the remaining categories, respectively.

Donors welcome package

In a joint statement, Australia and Germany welcomed the initiative through the IDPoor program, which the two governments donate funds in support of through German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), calling the launching of the country’s first large-scale cash transfer program “a historic moment for Cambodia.”

Pablo Kang, Australian Ambassador to Cambodia, said Canberra is committed to working with a broad range of partners to improve the lives of all Cambodians.

“We congratulate the Royal Government of Cambodia for utilizing the IDPoor database, which Australia has helped to establish over the past decade, in order to target cash transfers towards those most in need,” Kang said.

German Ambassador to Cambodia Christian Berger applauded Cambodia’s government for having “successfully managed the health crisis” of the coronavirus outbreak, which has led to only 130 confirmed infections, and turning its attention to its socio-economic impact.

“The planned cash-transfer is a very effective instrument: It targets those in need and at the same time accelerates consumption, which helps the overall economy,” he said.

“I am proud that with support from Germany and Australia the Cambodian Government has now a system in place to assist directly poor and vulnerable people.”

Hun Sen said earlier this month that the economy was expected to contract by 1.9 percent in 2020, as the pandemic hit garment and footwear exports, as well as tourism, construction and agriculture. International Monetary Fund (IMF) figures show Cambodia’s nominal Gross Domestic Product (GDP) per capita was U.S. $1,620 in 2019, ninth among the 10-nation ASEAN group.

Too little, too late

However, critics of the cash transfer program said the government’s action had come too late to be of use to the public.

Vorn Pao, president of the Independent Democracy of Informal Economy Association (IDEA), told RFA’s Khmer Service that the government should have begun assisting people in March, when the outbreak began causing factory shutdowns and layoffs.

Additionally, he said, the money will do little to help people cover their monthly expenses, noting that residents of Phnom Penh need at least U.S. $300 to meet their needs while those in rural areas require at least U.S $190.

He also condemned Hun Sen for warning the public against depending on the government to provide financial assistance.

“Cambodia is not like the U.S. and the EU, which provide unemployment benefits [ to their citizens],” he said.

“So far, the people have had to rely on their hard work because no one will support them.”

Mu Sochua, deputy president of the opposition Cambodia National Rescue Party (CNRP), told RFA that Hun Sen waited until the last minute to provide people with just enough help to ensure that “they don’t die.”

“Hun Sen is giving the people a drop of water at a time,” she said.

“The money isn’t Hun Sen’s—it is part of the government budget.”

Reported by RFA’s Khmer Service. Translated by Samean Yun. Written in English by Joshua Lipes.


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