Doubling down on Cambodia’s investments in human development to manage uncertain times

December 2, 2022
Manuth Buth/UNDP Cambodia

This piece is originally published on World Economic Forum.


The COVID-19 pandemic resulted in widespread challenges, which were compounded by the war in Ukraine. These shocks have largely stalled global recovery. In Cambodia, the latest macroeconomic outlook released by the Ministry of Economy and Finance and United Nations Development Programme (UNDP), estimates that the GDP will grow by 4.9 percent this year, compared to the original estimate of 5.4 percent due to the increase in cost of living associated with soaring prices of fuel, food, and other commodities. Further loss in growth has been mitigated by social protection and other stimulus measures.

Until 2020, the Human Development Index (HDI) – a measure of a nation’s wellbeing considering three basic aspects of human development, namely, health, education, and standard of living, has risen progressively since 1991 when the UNDP first started calculating it. It fell for the first time in 2020 and then again in 2021, with 90 percent of countries declining in either or both years, wiping out an average of five years of human development progress.

In Cambodia, there is a decline in the country’s hard-earned development gains and regression to its 2018 HDI level. Yet, the country made commendable improvements between 1990 and 2021, with its income per capita increasing fourfold to US$4,078, its life expectancy increasing by more than 14 years to surpass the age of 70, and its mean years of schooling growing by 2.4 years to 5.1 years on average. With these improvements in income, health and education, the country’s HDI increased by 56.9 percent, reaching the medium human development category, and putting Cambodia at the 146th rank among 191 countries. Cambodia’s decline to its 2018 HDI level compared to the global average decline to 2016, suggests that Cambodia’s response to the COVID-19 pandemic was effective in mitigating the losses. The Royal Government managed to roll out in a timely manner, with support by the Australian government and UNDP, a campaign in all the 1,646 communes in the country to identify and register poor and vulnerable families. These efforts led to the first ever cash transfer programme in terms of magnitude and reach in the country’s history. After 27 months and $806 million invested in nearly 700,000 households, the programme successfully mitigated impacts on GDP, poverty and unemployment.


Underlying challenges


The recently launched UNDP Human Development Report 2022 titled ‘Uncertain Times, Unsettled Lives: Shaping our Future in a World in Transformation’ identifies a new web of interconnected uncertainties, including climate and biodiversity crises, inequalities, political polarization and technological upheavals. This is happening at a speed and scale beyond what we have ever experienced before and is taking a heavy toll on our deeply connected societies.

At the same time, uncertainties are making people feel increasingly distressed. Stress, sadness, anger, and worry have been on the rise and are now reaching record levels. It is estimated that over 35 percent of the world population suffer from mental health and psychological problems – a startling 10 percent higher than a decade ago. According to the Transcultural Psychosocial Organization, this figure was 40 percent in Cambodia before the pandemic; it has likely increased since then. Suicide cases in Cambodia are also on the rise, with 242 cases reported by the Cambodian National Police in the first quarter of 2022. Suicide is ranked as the second leading cause of death among young adults aged 13 to 24 years old after road traffic accidents. The current mental health crisis is damaging human development and limiting people’s prospects and opportunities.


The way forward


As we look ahead, we can see for the first time a future in which our children may be worse off than previous generations. But this can be reversed. COVID-19 exposed the importance of building socioeconomic resilience. It has also reaffirmed that economic growth alone is not enough to tackle current challenges or manage the emergence of increasingly complex uncertainties. It is, thus, important to strengthen the country’s socio-economic preparedness to absorb future shocks, manage the uncertainty complex and harness the potential embedded in uncertain times. This would require concrete transformations that focus on investment, insurance, and innovation. Investment on renewable energy, preparedness for future pandemics and extreme natural hazards, nature-based solutions to ease planetary pressures, adaptation to climate change, and whole-of-society digital transformation. Insurance, including social protection, to help people navigate uncertainties. Innovation in its various forms (technological, economic, and cultural) to enhance people’s capacity to withstand uncertainty and unleash their potential to be agents of change.

Navigating uncertainty requires an open and inclusive dialogue to strengthen trust and enhance access and quality of social services and public goods. It also requires developing psychological resilience through expanding access to mental health services, which is often a privilege accessible only to some.

A great deal can be accomplished by working together to double down on investments in people through enhancing their freedoms, capabilities, and opportunities to thrive in peace, including with the planet. In a context of heightened uncertainties, one thing is sure: business as usual is not functioning. It is time to rethink the ground rules and assumptions, rekindle hope and rewrite our future.