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Dec. COVID19 Situation Cambodia 31122020

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Dec. COVID19 Situation Cambodia 31122020 COVID-19 Response in Cambodia Economic Policy and Enabling Environment Period: December 2020 Situation Report No: 05 Updated data: December 31, 2020 Sources: The Council for the Development of Cambodia (CDC), Cambodia’s Ministry of Health and other government agencies, WHO, UN agencies, local media in English and Khmer. Facts and Figure COVID-19 reported cases - New cases: 12 (Cambodian workers from Thailand) - New recovered: 01 - Active cases: 16 (female: 15; male: 01) - Deaths: 0 - Total recovered: 362 (female: 86; male: 276) - Total cases: 378 (female: 101; male: 277) - Total number of tests: 334,044 (19,883 per one million population) COVID-19 related Highlights - Cambodia’s Ministry of Health on December 27 lifted its restrictions by allowing all restaurants and shops that were ordered closed due to the “November 28 community incident” to operate as normal but must strictly adhere to the guidelines. - As of December 16, Cambodian Prime Minister has mobilized about $48 million in donations from 38,411 philanthropists in the country to purchase COVID-19 vaccine. - WHO’s COVAX has committed to providing vaccines for 20% of Cambodia’s population (around 3.2 million people) which will be available by March 2021 at the earliest. Prime Minister said on December 15 that Cambodia is prepared and ready to build a warehouse to store the COVID-19 vaccine with a temperature of -80 oC. - Cambodian government has implemented three rounds of cash payments to poor and vulnerable people affected by the Covid-19 pandemic and planned to launch the fourth round from January to March 2021 using a $200 million reserve fund. o First round June-July 2020: $49 million for 1,136,892 families o Second round Aug-Sept 2020: $56.8million for 1,306,349 families o Third round Oct-Nov 2020: $60 million for 1,377,738 families o Fourth round Jan-March 2021: $200 million reserve fund (plan) - Cambodian government introduced on 23 December the 7th round of the government measures to mitigate the socio-economic impact of COVID-19 through the reduction of withholding tax (WHT) on interest payments for the loans taken by banks and MFIs. The United Nations Resident Coordinator’s Office (UNRCO) in Cambodia translated the government measures into English as following: 1. Subsidized wage of $40 per month for each suspended employee in the garment sector, with factories/enterprises required to contribute an additional $30 per month for each employee (each employee will receive a total $70/month) from January to March 2021. 2. Subsidized wage of $40 per month for each suspended employee from January to March 2021 in the tourism sector such as hotels, guesthouses, restaurants and travel agents. Tourism businesses must contribute on a voluntary basis to the amount provided by the Royal Government, according to their actual ability. 3. Exempt from all types of monthly tax payments from January to March 2021 for hotels, guesthouse, restaurants and travel agencies in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet city, and Poi Pet city. 4. Deferring the implementation of pension for private sector until July 2021. 5. Exemption for the enterprises' contributions to the National Social Security Fund (NSSF) during the suspended operations. 6. Exemption for minimum tax for 3 months from January to March 2021 for the airlines that are established in Cambodia. 7. Deferring the aviation fee payments for airlines until March 2021 and permitting the airlines to settle the payments in installments after this exemption period. 8. Permitting enterprises to delay workers' seniority payments in the years before 2019, 2020 and 2021 to 2022. 9. Continuing the exemption of stamp tax for houses valued at or less than $70,000 until December 2021. 10. Continuing the implementation of cash transfers for poor households from January to March 2021. 11. Reducing withholding tax (WHT) on interest payments for borrowings from both resident and non-resident lenders: New loans: o Reducing withholding tax rate to 5% in 2021 on interest payments for the new borrowings by banks and MFIs from both resident or non-resident lenders. o Reducing withholding tax rate to 10% in 2022 on interest payments for the new borrowings by banks and MFIs from both resident or non-resident lenders. o Re-adjusting the withholding tax to a normal rate in 2023 to be compliant with existing laws and regulations. Existing loans: o Reducing withholding tax rate to 10% in 2021 on interest payments for the existing borrowings by banks and MFIs from both resident or non-resident lenders. o Re-adjusting the withholding tax to a normal rate in 2022 to be compliant with existing laws and regulations. Socio-Economic Trends - Cambodian upper house (Senate) unanimously approved the $7.62 billion for national budget in 2021, a half-billion decrease from this year’s total. While defending the draft budget law, Minister of Economy and Finance said that as per projection Cambodian GDP per capita will reach $1,771 by the end of 2021, up from $1,600 this year. - Cambodian Prime Minister on December 29 announced that Cambodia has begun extracting its first crude oil in Block A in the Gulf of Thailand, in a venture between Singapore's KrisEnergy Ltd and the Cambodian government. - Cambodia’s exports will be granted duty-free and quota-free access to the markets in the United Kingdom commencing in 2021. - National Bank of Cambodia (NBC) projected in late December that Cambodia’s real economic growth is estimated to recover by 4% in 2021 due to effective COVID-19 vaccines available. - ADB early December presented that due to the improved agricultural performance and an increased volume of non-garment manufacturing, Cambodia is well positioned for recovery in 2021 in terms of medium-term economic outlook. - World Bank’s latest economic update on December 16 projected that Cambodia's economy returns to four per cent growth next year owing to an improvement in economic activities and the effective implementation of the government’s intervention measures to keep the economy afloat amid Covid- 19. - Domestic tourism is one of the key sectors for Cambodia’s economy recovery. The latest World Bank report has provided five key recommendations: 1. Mitigating the impacts of COVID-19 on the ecotourism industry. 2. Strengthening regulatory frameworks for ecotourism. 3. Strengthening key institutions and partnerships for ecotourism development. 4. Strengthening ecotourism destination planning, management, and marketing. 5. Enabling and supporting the private sector in tourism. - Cambodia's total exports reached $16 billion this year (14% increase compared to 2019) despite the spread of Covid-19 and disruption to production and slowdown in global supply chain expansion. Yet, the country’s total trade volume has decreased from $36.7 billion in 2019 to $32 billion in 2020, based on National Bank of Cambodia (NBC) figures. - General Department of Customs and Excise revealed that Cambodia’s exports in clothes, footwear and travel goods decreased 9% for the first 10 months (between January and October was $8.215 billion) compared to the same period in 2019. The US market was the leading for Cambodian products, followed by the EU, Japan, the UK and ASEAN destinations. - Cambodian exported more than 1.5 million bicycles as of the end of between January and September this year totaling of some $400 million in revenue. The US, Germany, the UK and Belgium are the main markets. - Cambodia exported over 285,589 tonnes of dry rubber from January to November (22% increased year on year), earning $383 million (23% increased same period last year) as an average price of $1,341 per tonne, based on Cambodia’s General Department of Rubber. - Cambodia exported 8.55 million tonnes of its six most profitable agro-industrial crops (cassava, cashew nuts, mangoes, yellow bananas, peppercorn and Pailin longan), worth more than $2.32 billion this year as of December 15. Ministry of Economy and Finance reported that Cambodia exported $14.1 billion worth of goods in the first nine months of this year, up 20.07% from the same period last year. - Cambodian Prime Minister on December 15 decided that all grade 12 students pass their exam automatically without sitting for exam due to the COVID-19 pandemic. - Cambodian government on December 16 welcomed European Investment Bank (EIB) with $97 million to invest in water supply infrastructure and irrigation systems in rural Cambodia. Cambodian government, ADB, EIB and EU are collaborating to implement the project which is expected to benefit nearly 200,000 people in five provinces. - Cambodia’s upper house (senate) on December 21 approved on the draft law on Government Securities, allowing the government to prepare bonds to issue in the capital market to collect funds from the public for the country’s development. - Cambodian government’s relevant ministries on December 22 held a discussion on the potential collection of a digital services tax on business activities including social platforms, online advertising, search engines, e-commerce and mobile payment services. - The EU, Germany and France on December 21 pledged to invest $115 million to develop rural infrastructure in Cambodia under the agreement for the financing Rural Infrastructure Development Programme for Cambodia (RID4CAM). - From December 04-31, Facebook posts of the Council of the Development of Cambodia (CDC) revealed that 16 investment projects on the productions of garments, fabric, yarns, apparels, textiles, carton/boxes packaging, livestock equipment, wood furniture, lighting bulbs/component, mental processing, beer factory, and coal-fired power plant have been approved with the total capital investment of $1,165.9 million and job creations of 8,999. N.0 Company/Investments Industry Location Investment Job projects Capital (million creation USD) 1 Jiayuan Hengrun Int’l Garment Sangkat Svay Rolum, 6.6 1,929 Textile Co., Ltd.
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