Hanoi (VNA)ꦍ – The World Bank’sBoard of Executive Directors on December 20 approved a financing of 274 millionUSD to support reforms that will boost growth and strengthen Cambodia’sresilience, the World Bank announced on December 21.

According to a statementby the lender, the operation supports reforms that will streamline thebusiness registration processes, promote competition, and expand access tofinance for small and medium enterprises. Other reforms will enhancefiscal resilience, including by improving the management of Public PrivatePartnerships and facilitating the issuance of government debt in the domesticmarket. The operation will alsofacilitate the timely provision of relief to a broader set of vulnerablehouseholds in the event of a natural disaster or economic shock. Cambodia’s economy wasbadly affected by the COVID-19 pandemic, with GDP contracting by 3.1% in 2020,the country’s first recession in 30 years. Simulations show that thepoverty rate increased by 2.8 percentage points, pushing about 460,000individuals into poverty. The Cambodia’s governmentresponded quickly and effectively to the pandemic, assisting business andvulnerable families, but the associated rise in spending has meant that fiscalconsolidation will be required in the period ahead. Maryam Salim, World Bank Country Manager forCambodia, said that while Cambodia’s ‘Living with COVID-19’ strategy has helped rebuild theeconomy, the country remains vulnerable to downturns in external demand anddisruptions in global supply chains. “Thisnew operation will help Cambodia boost private sector competitiveness,strengthen its fiscal position, and provide assistance to its most vulnerablepeople,” he said. Theoperation is anchored in the government’s post-pandemic Economic Recovery Plan,which has three broad objectives of recovery, reform, and resilience, andbuilds on the 200 million USD CambodiaRelief, Recovery, and Resilience Development Policy Financing operationapproved in 2021. The financing provided bythis operation will help to alleviate some of the fiscal pressures that thegovernment is now facing, having run relatively large deficits in recent years.The 274 million USD credit is provided by the International DevelopmentAssociation (IDA), the World Bank’s fund for the poorest countries./.