ADB set to loan $800M over the next five years
The Asian Development Bank announced yesterday it would provide Cambodia with over $800 million in loans over the next five years to help the Kingdom reduce poverty.
Eric Sidgwick, ADB country director for Cambodia, said the next round of funding will run from 2014 to 2018 and centre on helping Cambodia’s most vulnerable citizens.
Aside from building up infrastructure and improving the public sector, the plan aims to increase agricultural productivity and improve labour market skills by investing in vocational training.
The ADB funding will focus on fewer – but larger – projects, said Sidgwick, noting that the Cambodian government said the bank had “too many small projects”.
“The average of our projects is going up to $35 million. A few years back it was around $19 to $20 million,” Sidgwick said.
According to ADB economist Jan Hansen, Cambodia is expected to graduate to a lower-middle-income country “this year or the next year at the latest”.
A country is considered lower-middle income once its citizens’ per capita annual income is over $1,045. In 2013, Cambodia’s was $950, said Hansen.
As Cambodia gets wealthier, it is expected to lose some advantages accorded to least-developed countries, such as the concessional loans it receives from the ADB and preferential trade schemes from the United States and the European Union.
“Nobody’s sure when that will happen – we will only know once we cross the threshold,” said Sidgwick.
ADB projects aim to enhance the Kingdom’s investment attractiveness so that when advantages such as trade preferences are lost, Cambodia remains competitive with its more economically developed neighbours, Sidgwick added.
“There’s a very clear understanding now across government that more needs to be done, and some areas need to move faster than they have done in the past,” he said.
Vocational training and skills development are among the areas the government was seeking to prioritise, Sidgwick went on to say.