Transparency to Historic SDRs to Support Global and Cambodia’s Recovery from Covid-19

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) in early August, to boost global liquidity. Cambodia will receive a portion of 0.24 billion, according to a press release from Oxfam today.

“New SDRs will help developing countries including Cambodia to cope with the impact of Covid-19 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 programme 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 organisations to ensure that this additional debt-free financing is used to benefit all Cambodians affected by Covid-19, for example, prioritise it in universal health care and social protection investments that can reduce inequalities for a fairer and more sustainable recovery from the pandemic,” Ms. Solinn Lim, Cambodia Country Director of Oxfam.

Informal sector has now represented 87.5 percent 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.

“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 programme, 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,” Ms. Solinn Lim underlined.

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

Source: Agency Kampuchea Press