PHNOM PENH: Before the Covid pandemic, social-protection mechanisms in Cambodia were minimal. In 2020, however, the government rapidly put in place a system for emergency cash transfers, building on an existing scheme developed with the United Nations Development Programme.

More than 700,000 households amounting to 2.8 million people got digital cash transfers in 2020, under the new Cash Transfer Programme for the poor and vulnerable households. These averaged about US$45 a month — equivalent to about a third of monthly household income for people in that income bracket. Its known as ID Poor, the scheme was adapted to target transfers to households considered absolute priorities or with significant challenges.

The Ministry of Social Affairs, Veterans and Youth Rehabilitation, has managed the new scheme, which upgraded an existing system for pregnant women and vulnerable groups. Under the Covid programme, the ministry sent SMS alerts to beneficiaries to show ID cards at Wing agents to withdraw cash.

“The cash-transfer system introduced in 2020 has provided crucial support to the poor, and is likely to have been very effective at tackling extreme poverty, especially in rural areas,” the International Monetary Fund (IMF) said in its annual assessment of the Cambodian economy released Thursday.

The IMF has highlighted World Bank research showing that cash-based transfers were the most common new measure to address Covid among Asia-Pacific countries last year. About three quarters of countries in the region adopted such schemes with utility and financial support being the second most popular measure. Fewer than half the countries chose wage subsidies. Three months after the February 20 incident earlier this year — when community transmission of the SARS-CoV-2 virus began snowballing in Cambodia — the Ministry of Social Affairs has extended the programme.

“Support is now provided to low-income families residing in lockdown areas, families whose members died from Covid-19, and families whose members have Covid-19,” the IMF report noted. And on top of aid already received, eligible households can also get one-time only cash transfer to ease payments for food, water, and electricity.

In June, the government has announced a new Family Package of Integrated Social Assistance Programme to boost the ability of households to cope with shocks, enabling investment in human capital and lasting prosperity.

According to the IMF, the new package would “considerably expand” social protection in Cambodia. “The whole life cycle would be covered, by emergency support, health care, social care, child protection, child benefits and feeding, and disability and old-age allowances,” it said.

The plan is to deliver aid by combining cash transfers — for emergencies pregnant women and young children, persons with disabilities, the elderly, and students on scholarships — with social and complementary in-kind services. Moreover, the IMF said the package “explicitly cites goals to be sensitive to gender, disability, and HIV/AIDS factors.”

As the package is put into place over the next five years, “the first step is to build on the ID Poor system, refining the mechanism to identify at-risk households,” the IMF said. “The following steps will be registration and enrollment of those falling into at-risk groups, development of electronic-delivery mechanisms, and monitoring of risks and compliance.

The IMF has welcomed the new package as an evolution in social protection, noting that the cash transfers launched last year may have effectively tackled extreme poverty in rural areas but not necessarily urban areas.

“A large section of the urban workforce might yet be unprotected, especially households who may have fallen into poverty in 2020,” it said, pointing to its earlier study on labour market vulnerability in Cambodia. "To that end, the authorities’ plans to replace the emergency cash transfers introduced in 2020 with a broader system of social​ protection that allows finer targeting to vulnerable groups are welcome.”