Press release: Transparency to historic SDRs to support global and Cambodia’s recovery from Covid-19

Frontline informal economy workers are the most vulnerable who need the most support during the pandemic of Covid-19. Photo: Oxfam

Click HERE to download the press release in Khmer

The Board of Governors of the IMF has approved a general allocation of the largest Special Drawing Rights (SDRs) in history equivalent to US$650 billion (about SDR 456 billion) on 2 August 2021, to boost global liquidity.​ Cambodia will receive a portion of US$0.24 billion.

Ms Solinn Lim, Cambodia Country Director of Oxfam, said: “New SDRs will help developing countries including Cambodia to cope with the impact of Covid19 and restore its economy. The Royal Government of Cambodia (RGC) has made great effort to contain the virus transmission and supported vulnerable populations coping with their livelihood loss with its historic cash transfer program that is built on its developing social registry system. More needed to be done, and we ask the RGC to continue working transparently and together with other civil society organizations to ensure that this additional debt-free financing is used to benefit all Cambodians affected by Covid-19, for example, prioritize it in universal health care and social protection investments that can reduce inequalities for a fairer and more sustainable recovery from the pandemic.”

Informal sector has now represented 87.5% of Cambodia’s economy (ILO, 2021) and the Ministry of Planning has warned that 6 million informal workers are at risks of losing their livelihoods altogether as the pandemic persists. Thus, it is imperative that the RGC puts a special focus of its relief programme on supporting informal economy workers and micro, small and medium size businesses that are the backbone of Cambodia’s economy.

Ms Lim added: ‘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 Covid-19 relief program, and we encourage the RGC to take advantage of this SDR to further this support and make its pandemic intervention historically inclusive. Cambodian people especially the most vulnerable groups will remember this legacy.’

SDRs are a form of global currency that can be pumped into the global economy, with non-repayable allocations afforded to each International Monetary Fund (IMF) member country. They are not a loan that need to be repaid and their usage is decided by receiving countries.

The new SDRs will become effective on 23 August 2021. They are distributed based on a country’s quota/share in the IMF. The $650 billion SDR issuance will deliver almost $400 billion in added reserves to the world’s richest economies, $230 billion to middle-income countries, and $21 billion to low-income countries.

Oxfam was one of the first organizations to call for a new SDR issuance as part of a broader economic rescue plan when the crisis hit in 2020. In an open letter, Oxfam and more than 200 other civil society groups urged the G20 to back a significant issuance of SDRs to help countries weather the COVID-19 pandemic.

Cambodia’s and global economic outlooks are daunting, and the recovery road ahead is long and winding for years to come, but Oxfam believe that Cambodians and the RGC will overcome this unprecedent challenge.