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IMF approves $240M grant for pandemic recovery fund

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A woman selling Khmer cake walks her bicycle at Orussey Market in Phnom Penh’s Prampi Makara district on July 5. Heng Chivoan

IMF approves $240M grant for pandemic recovery fund

The International Monetary Fund (IMF) has approved a $240 million grant to Cambodia to rehabilitate its economy and recover from the affects of the Covid-19 pandemic.

“The Board of Governors of the IMF has approved a general allocation of the largest Special Drawing Rights (SDRs) in history equivalent to $650 billion (about SDR 456 billion) on 2 August 2021, to boost global liquidity. Cambodia will receive a portion of US $0.24 billion,” Oxfam said in a press release seen by The Post on August 11.

SDRs are an interest-bearing international reserve asset based on a basket of international currencies created by the IMF in 1969 to supplement other reserve assets of member countries. SDRs can be held by Cambodia on account with the IMF as part of its foreign reserve assets or exchanged with other IMF member countries for regular currencies.

SDRs are used by the IMF as stimulus for the global economy. They are not a loan that needs to be repaid and their use is decided by the receiving countries.

Oxfam Cambodia country director Lim Solinn said: “New SDRs will help developing countries including Cambodia to cope with the impact of Covid-19 and restore its economy.”

The government has made “great efforts” to contain the virus transmission and support vulnerable populations coping with their livelihood loss with its historic cash transfer programme that is built on its developing a social registry system, she added.

Solinn suggested that the government continue working transparently and with civil society organisations to ensure that this additional debt-free financing is used to benefit all Cambodians affected by Covid-19. For example, it could be used to prioritise universal health care and social protection investments that can reduce inequalities for a fairer and more sustainable recovery from the pandemic.

The press release cited the International Labour Organisation’s findings in 2021 which indicated that the informal sector now represented 87.5 per cent of Cambodia’s economy.

The press release also cited the Ministry of Planning’s findings which warned that six million workers in the informal economy are at risk of losing their livelihoods altogether as the pandemic persists.

“Thus, it is imperative that the RGC puts a special focus on its relief programme supporting informal economy workers and micro, small and medium size businesses that are the backbone of Cambodia’s economy,” noted the press release.

“We commend the RGC for its efforts to ensure that vulnerable groups such as women and girls facing sexual and gender-based violence, pregnant women, children, people with disabilities, indigenous people and ethnic minorities, people living with HIV/AIDS, homeless persons, and migrant returnees, are beneficiaries of their Covid-19 relief programme,” said Lim Solinn.

Ministry of Economy and Finance spokesman Meas Sok Sensan did not comment on the matter on August 11, saying he was busy in a meeting.

Oxfam further requested that the government take advantage of this SDR to make its pandemic intervention historically inclusive because the Cambodian people and especially the most vulnerable groups will remember this legacy.

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