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In Cambodia, corona’s economic effects take their toll

Zero COVID-19 deaths but severe economic consequences put Cambodia’s social protection systems on the spot

A poor family gets registered with the On Demand IDPoor App

So far, the Coronavirus sweeping the planet has not claimed a single life in the small South-East Asian nation - yet it has devastated the livelihoods of many. This has spurred the Cambodian government to take a number of measures - including seeking out German Development Cooperation’s expertise to implement rapid responses and address the burgeoning needs.

At first glance, the Kingdom of Cambodia’s experience with the coronavirus looks like a rare success story. While global powers such as the United States and the Russian Federation are continuing to record daily coronavirus cases in their thousands, the South-East Asian nation has not recorded a single pandemic fatality and since the virus emerged, and as of 10th June 2020, there have only been 126 confirmed cases

Yet having few corona cases does not mean that there will not be corona-related deaths, particularly in countries such as Cambodia where ordinary poverty levels are high and where the economic effects of the pandemic are already hitting hard.

Fearing debt collectors more than coronavirus

After three decades of genocide and war (1969-98) that cost millions of its citizens their lives, Cambodia has come a long way. Between 2006 and today the country’s official poverty rates have seen a reduction from 47.8% to 13.5%. Yet, these gains are fragile.The coronavirus outbreak has caused a sharp deceleration in Cambodia’s main engines of growth in the first quarter of 2020, notes the World Bank, leaving a weakened tourism sector and slowing construction. 

The country’s garment industry, which, along with tourism and construction, in recent years has been responsible for fuelling a bulk of the economic growth, normally contributes about 40% of Cambodia's gross domestic product - but recent World Bank forecasts for 2020 show the growth slumping. 

As a result, hundreds of thousands of employees are now without a sustainable income or jobs. 'The economic effects of the pandemic only exacerbate the myriad of issues that ordinary Cambodians have to cope with already', says Ole Doetinchem, Programme Manager of the IDPoor Support, implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on behalf of the Australian Department of Foreign Affairs and Trade (DFAT) and the German Federal Ministry for Economic Cooperation and Development (BMZ). ‘Due to the closure of the border to Thailand, for example, poor communities in the rural north and west can no longer seek work on the Thai side. Because of their debts many poor families are more afraid of debt collectors than of catching the coronavirus’.

As governments worldwide began to recognise that existing social protection mechanisms had to be mobilised and new ones had to be developed, the Government of Cambodia and GIZ built on and expanded their longstanding trustful collaboration in this field.

Fast-track identification of poor households: On-Demand IDPoor

One of the first steps was to mobilise an existing tool – IDPoor – and to adapt it to the new pandemic emergency.

The ‘Identification of Poor Households’ or ‘IDPoor’ programme combines a household means test with a participatory community-based selection process in order to identify the country’s most disadvantaged (see the case study “Leave no one behind” for a detailed description of the approach and its history). Today, IDPoor covers all 25 of Cambodia’s provinces and is designed to support the social assistance system as a whole. Those identified – today around 2.3 million – gain access to a range of essential social services, helping them overcome financial hardship. As of this month, an emergency cash transfer service is now being added to assist those suffering from the economic repercussions of COVID-19. ‘We have been working on this for more than 10 years,’ explains Doetinchem. ‘It takes time to build systems that function on this scale.’

Yet the system is based on data gathered over a three-year cycle – a long time to wait for those who suddenly find themselves deprived of livelihoods, says Boros Samheng, Cambodia’s Secretary of State of the Ministry of Social Affairs, Veterans and Youth Rehabilitation. To overcome this, the Cambodian government and GIZ have now fast-tracked  the roll-out of ‘On Demand IDPoor’. This mechanism, which is now operational, allows households to come forward at any time to explain how they qualify for government assistance.

A poor family gets registered using the On Demand IDPoor App

In the last ten 10 days of May, commune councils and villagers used the new On Demand IDPoor mechanism to interview members of over 50,000 households, identifying approximately 200,000 beneficiaries who will all qualify for the emergency cash transfer.

Tech solutions speed up responses

GIZ and UNICEF recently provided 1,700 Android tablets used in the communes to administer and record On Demand IDPoor cases as well as to process the cash transfers. ‘DFAT and BMZ quickly gave GIZ the green light to react flexibly to the crisis situation and to re-programme the existing resources,’ notes Doetinchem, adding that GIZ has already committed over 450,000 EUR of existing Australian and German support for the technical work needed.  To help handle the increased demand, UNDP is doubling the number of tablets to be used in communes.

In addition, On Demand IDPoor training sessions were held for community leaders in May, says Chan Narith, the Secretary General of the country’s National Social Protection Council. ‘We are gathering people in accordance to the WHO and MOH guidelines: everyone is washing hands, wearing masks, and there are no more than 35 people in a room, all of whom are socially distanced.’ Additional training is done digitally, he adds.

More needed than ever: The Social Protection Council

Another venture tackling social welfare issues has been the establishment of the National Social Protection Council in 2017, which BMZ supported with co-financing by USAID. The Council coordinates social protection schemes across ministries and agencies - particularly important during a pandemic when swift and decisive measures need to be implemented quickly. 

‘Today, coordination is much better,’ says Narith, adding that in the past coordination among institutions was patchy -  not just at the implementation level, but even in terms of policy and decision-making

‘Our painstaking efforts over many years to build institutions has resulted in competent institutional actors which can now work on responding to the shock,’ says Kelvin Hui, GIZ Team Leader within the Social Health Protection Project.

Yet many challenges remain, such as how to identify other population groups in need of help, particularly the populations on the brink of poverty, most of whom work in the informal sector. These are among the most vulnerable, says Narith, and the social protection schemes which cover poor households and formal sector workers nonetheless leave people in this sector exposed. ‘But even defining what is the informal sector is difficult -  never mind officially registering them,’ he explains.


Beyond the pandemic

This 82-year-old widow with IDPoor status collects bottles and cans for a living. Credits: GIZ / Conor Wall

While the government has used programmes such as On Demand IDPoor to put into action cash transfer programmes targeting the most vulnerable segments of the population, longer-term solutions are also necessary to work alongside such measures, says Bernd Appelt, manager of GIZ’s social health protection programme. The programme, co-financed by USAID, supports Cambodia’s Ministry of Health in setting up a system for external, independent quality checks to improve the quality of state health care facilities. To counteract the spread of the corona virus, the project also runs campaigns to counter misinformation online, while also providing support in conducting COVID-19 tests and research. Appelt and his team are working to link this assistance with social development measures. 

‘If you vaccinate someone against measles and then he dies of hunger, or can’t go to school, you are not achieving what you set out to achieve - economic development without promoting social development is useless,’ he says. ‘Social assistance programmes are designed to help people in times of drought, flood, fire storm - whenever there is a catastrophe you need to be supported. But what government policies have not yet touched upon are the people who are structurally poor, who can’t lift themselves out of poverty even in times of economic growth of 6-7%,’ he points out, citing an example someone with disabilities who may not be able to take advantage of the available work opportunities as a result. ‘So what do you do? Feed them all the time?’

Governments need to provide social protection and opportunities

‘Many countries confuse social protection with social assistance and welfare with development – and I think this is where countries like Germany can actually share their experience of a well-functioning social security system,’ says Appelt, citing examples from the 2008 financial crisis when Germany recovered quicker than others. ‘Making someone healthy without providing opportunities is in the end meaningless.’ 

According to Doetinchem, ‘German development cooperation is not about providing quick fixes. It is about accompanying countries over time and with sound technical advice to build sustainable systems.' And Kelvin Hui adds: ‘The current corona crisis strengthens the case for Universal Social Protection. It brings out clearly why countries need strong solidarity-based social protection systems. By investing in them in times of peace and prosperity, governments can ensure that in times of crisis no one is left behind.’

Inna Lazareva, June 2020


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