Cambodia Investment Review

ADB Unveils New Country Partnership Strategy 2024 – 2028 Aligned With The First Phase Of The National Pentagonal Strategy

ADB Unveils New Country Partnership Strategy 2024 – 2028 Aligned With The First Phase Of The National Pentagonal Strategy

Cambodia Investment Review

The Asian Development Bank (ADB) has introduced a new country partnership strategy for Cambodia, set to span from 2024 to 2028. This strategy is closely aligned with the first phase of the national Pentagonal Strategy for the same period and aims to foster a sustainable, inclusive, and resilient economy in Cambodia.

The 5-year strategy focuses on collaborating with the government and other partners to accelerate private-sector-led economic diversification, advance human development, and enhance climate resilience. The comprehensive plan also integrates crosscutting priorities to address climate change, strengthen governance and institutional capacity, improve gender equality, promote digitalization, and deepen regional cooperation and integration.

Growth And Opportunity In Cambodia’s Development Journey

“Shaped in close collaboration with diverse stakeholders, ADB’s new country strategy is a partnership with Cambodia for its prosperity, its people, and the planet,” said Scott Morris, ADB Vice-President for East and Southeast Asia and the Pacific. “It heralds an exciting new chapter of growth and opportunity in Cambodia’s development journey, one that aims to set the country on the path to high income status in the decades ahead.”

Read More: ADB Report Urges Cambodia to Scale Up Green Investment for Sustainable Growth and Climate Resilience

A significant component of the strategy is economic diversification, with a particular emphasis on the private sector’s role in driving sustainable growth. This involves enhancing high-quality, climate-resilient infrastructure to attract private sector investments and creating a favorable business environment, especially for micro, small, and medium-sized enterprises.

Jyotsana Varma, ADB’s Country Director for Cambodia.

The strategy also focuses on ensuring inclusive access to quality and affordable services, such as education, skills development, healthcare, and clean water supply and sanitation services. ADB aims to enhance digital service delivery by subnational administrations and improve food security and nutrition for those most in need, thereby boosting economic productivity.

In alignment with ADB and the Cambodian government’s climate commitments, the strategy aims to bolster climate resilience through targeted climate adaptation initiatives across agriculture, water resource ecosystems, and urban infrastructure. Additionally, it prioritizes expanding renewable energy sources and mobilizing concessional climate finance to support a greener and more resilient future for Cambodia.

Importance Of Scaling Up Green Investment In Cambodia

A recent report by ADB emphasizes the importance of scaling up green investment in Cambodia to unlock growth potential and build climate resilience. The report highlights Cambodia’s vulnerability to climate change, weak governance, and reliance on climate-sensitive sectors as factors that necessitate enhanced climate resilience for sustained economic growth.

Read More: Opinion: Reality Tempers Cambodia’s Renewed Economic Optimism in 2024

“Cambodia ranks 149th among 182 countries in the 2022 Notre Dame-Global Adaptation Index, indicating a need for significant improvement in climate resilience,” the report states. The country is particularly prone to floods, with the report noting that “Cambodia scores 9.5 out of 10 in the 2023 global risk index for humanitarian crises and disasters.”

ADB 2024 Economic Outlook at ADB Headquarters on April 11, 2024.

The report warns that if left unaddressed, climate change could significantly hinder Cambodia’s long-term growth, potentially reducing its GDP by about 10% by 2050 due to lost labor productivity from extreme weather events and rising temperatures. Agriculture and tourism are cited as the most vulnerable sectors.

Economy Is Forecast To Grow At 5.5% In 2023 And 6.0% In 2024

Despite these challenges, the report suggests that reducing its carbon footprint presents new growth opportunities for Cambodia. As global demand for environmentally sustainable products and services rises, transitioning to a net-zero economy could create higher-quality jobs and attract global investors interested in green investment.

“Despite weaker global demand, Cambodia’s economy continued to perform well in 2022 led by ongoing tourism recovery,” said Jyotsana Varma, ADB Country Director for Cambodia. “Cambodia’s economic outlook is positive with robust growth, a shrinking current account deficit, and moderate inflation in 2023.”

Cambodia’s economy is forecast to grow at 5.5% in 2023 and 6.0% in 2024, driven by a stronger tourism recovery and higher growth in the services sector, according to the ADB report.

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