UNDP Launches 2022 Economic and Social Impact Assessment of COVID-19 and War in Ukraine on Cambodia

Phnom Penh, 23 November 2022 – Policy Brief on the 2022 Economic and Social Impact Assessment of COVID-19 and War in Ukraine on Cambodia

A policy brief on the 2022 Economic and Social Impact Assessment of COVID-19 and War in Ukraine on Cambodia was launched today by the UN Development Programme (UNDP), the Ministry of Economy and Finance (MEF), the Ministry of Social Affairs, Veterans and Youth Rehabilitation (MoSVY), and the UN Joint SDG Fund. The assessment uses a computable general equilibrium (CGE) model with real economic data to simulate shocks and examine the reaction of the economy considering the impact of rising fuel, food, and fertilizer prices, in addition to the global economic slowdown and its impact on demand for Cambodian exports, the tourism sector, and construction sector investments.

Findings

• Cambodia’s 2022 GDP is expected to decelerate from the pre-war in Ukraine estimation of 5.4 percent to 4.9 percent, taking into account the positive effect that social protection and other mitigation measures have on the economy.
• Increases in the poverty rate were also found to be mitigated by the implementation of social protection measures. The poverty rate is estimated at 15.2 percent, slightly higher than the pre-war estimation of 15.0 percent but 0.5 percentage points lower than the projection with no social interventions. This translates to the prevention of around 85,000 people from falling back into poverty.
• Due to the contraction of the economy, the model estimates 1.25% of unemployment in 2022 as compared to 1.12% in the pre-war estimation. The unemployment rate may increase to 1.45% without social protection measures.

“Although Cambodia is recovering from the pandemic, the recovery is slowed down by uncertainties driven largely by external shocks,” commented Ms. Alissar Chaker, UNDP Resident Representative in Cambodia.

Policy Recommendations

• Focus on building the socio-economic resilience of the country and enhancing its preparedness for absorbing future shocks.
• Double down on investments in human development.
• Optimize and expand social protection.
• Foster a just energy transition and green economy.
• Manage energy security.
• Accelerate an inclusive and whole-of-society digital transformation.

H.E. Tep Phiyorin, Under Secretary of State, MEF, acknowledged the value of updating the CGE model for Cambodia, as it “serves as important policy input to support the Royal Government of Cambodia in formulating responses to overcome the impacts of the pandemic and additional shocks that the country is now facing.”

“The modelling revalidates the importance of developing the social protection system in Cambodia,” said H.E. Samheng Boros, Minister attached to the Prime Minister and Secretary of State, MoSVY. “It clearly shows that social protection measures have a central role to play in protecting the Cambodian economy and its people from unforeseen challenges like the COVID-19 pandemic and war in Ukraine.”

In addition to its technical assistance, UNDP is supporting the delivery of a training programme on modelling tools, including CGE, to professional economists at MEF. This will support the development of institutional and individual capacities and systems to produce traditional and innovative data, as well as to strengthen reporting mechanisms. With this data, up-to-date information can be provided to planners and policymakers to advance integrated development solutions that accelerate the achievement of the Sustainable Development Goals and Cambodia’s development ambitions.

Ends

For media inquiries

Please contact Mr. Im Samruol, UNDP Cambodia’s Communications Analyst at samruol.im@undp.org

UNDP is the United Nations’ global development network and is the leading United Nations organization fighting to end the injustice of poverty, inequality, and climate change. Working in 170 countries, we help nations to build integrated, lasting solutions for people and the planet. Learn more at https://www.undp.org/cambodia or follow us at @UNDPCambodia.

SDGs, Targets, and Indicators

1. SDG 1: No Poverty

   • Target 1.1: By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day
   • Indicator 1.1.1: Proportion of population below the international poverty line, by sex, age, employment status, and geographical location (urban/rural)

2. SDG 8: Decent Work and Economic Growth

   • Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value
   • Indicator 8.5.1: Average hourly earnings of female and male employees, by occupation, age group, and persons with disabilities
   • Indicator 8.5.2: Unemployment rate, by sex, age group, and persons with disabilities

3. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.2: Promote inclusive and sustainable industrialization and foster innovation
   • Indicator 9.2.1: Manufacturing value added as a proportion of GDP and per capita

4. SDG 10: Reduced Inequalities

   • Target 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality
   • Indicator 10.4.1: Labour share of GDP, comprising wages and social protection transfers

5. SDG 11: Sustainable Cities and Communities

   • Target 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated, and sustainable human settlement planning and management in all countries
   • Indicator 11.3.1: Ratio of land consumption rate to population growth rate

6. SDG 13: Climate Action

   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries
   • Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population

7. SDG 16: Peace, Justice, and Strong Institutions

   • Target 16.6: Develop effective, accountable, and transparent institutions at all levels
   • Indicator 16.6.1: Primary government expenditures as a proportion of original approved budget, by sector (or by budget codes or similar)

Table: SDGs, Targets, and Indicators

Analysis

1. Which SDGs are addressed or

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   Source: undp.org

    

   

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