Cambodia Investment Review
Fair Finance Cambodia (FFC) released a comprehensive study, focusing on the Asian Development Bank’s (ADB) role in financing Cambodia’s economic recovery in the aftermath of the COVID-19 pandemic. The study specifically assesses the impact of the ADB-supported infrastructure project, Road #23/312, and aims to identify policy gaps in Cambodia’s approach toward a green and sustainable economy.
The study offers seven key recommendations for both the ADB and the Cambodian government to consider. The first three recommendations underscore the importance of implementing an Involuntary Resettlement Policy at the project’s early stage, promoting economic empowerment for women, and enhancing their access to financial assistance.
The other four recommendations call for developing a consensus on legal and technical terms related to a green economy and sustainable finance. These also include strengthening relevant institutions by integrating long-term institutional knowledge and skills, developing tools for conducting environmental and social impact assessments, and addressing the limited knowledge and skills of policymakers and practitioners in the field of sustainable finance.
Recognized The Need For Such Infrastructure Initiatives
Local communities largely favor road improvement projects, the study found. The communities have accepted the impact assessment results, recognized the need for such infrastructure initiatives, and identified several resulting benefits, such as improved access to schools, markets, hospitals, and farms. However, the study also noted concerns raised by the communities regarding the compensation schemes for those who would be affected by the development projects.
In a statement, Ms. Sophoan Phean, National Director of Oxfam, emphasized the need for introducing a resettlement plan early on. “It is imperative that we provide affected households and communities with an accepted compensation scheme and a clear timeframe,” she said. She further urged for the implementation of the ADB’s Safeguards Policy Statement with a focus on involuntary resettlement and specially tailored procedures for the needs of vulnerable groups like women and children.
Ms. Sin Putheary, Executive Director of the Cooperation Committee for Cambodia (CCC), commented on the emerging trends of Environmental, Social, and Governance (ESG) criteria and Sustainable Finance. She stated, “These concepts are socially and economically constructed and contribute to equitable, inclusive, and sustainable development in Cambodia.” Putheary suggested that the study’s findings should serve as a guide for creating various policies and legal frameworks that promote green growth and sustainable development in Cambodia.
Ensuring A Balanced Consideration Of ESG Impacts
The study concludes that the ADB’s road improvement project complies with existing legal and policy frameworks, thereby ensuring a balanced consideration of environmental, social, and economic impacts for the communities involved. It also provides several policy recommendations intended to guide engagement and influence the policy agenda on green economies and sustainable finance, as well as to enhance inclusivity and maximize the positive impacts for communities.
This research study, co-published by the CCC and FFC, was launched at an event in Phnom Penh, Cambodia, supported by Oxfam in Cambodia. Approximately 50 participants attended, representing a range of stakeholders such as banks, microfinance institutions, civil society organizations, ADB, the Ministry of Public Works and Transportation, and young people.
The report serves not only as an in-depth analysis of ADB’s involvement in Cambodia’s post-pandemic economic recovery but also as a roadmap for policymakers, providing actionable recommendations for fostering a more sustainable future.
