• Society

COVID-19 Costs $2 Billion of Public Funds

• By Ou Sokmean
• and Sam Sopich
• May 23, 2022 7:52 PM

Protecting people’s lives and balancing the negative economic impacts of the pandemic ate State’s hard-earned money: PM

PHNOM PENH – Over the past two years, the government has spent more than $2 billion to protect the lives of people and moderate the impacts of the COVID-19 crisis on key sectors of the economy.

Speaking at a meeting with the Cambodian community in Zurich, Switzerland, on May 21, Prime Minister Hun Sen said that more than $2 billion of State's savings were spent to protect people’s lives and livelihoods by creating jobs, supporting poor and vulnerable families, as well as helping weak or struggling businesses during the two-year COVID-19 crisis.

 “The government spent about $40 million a month to help affected people during the Covid-19 crisis,” he said. The rest (approximately $1 billion) was spent on buying 28.5 million doses of vaccine, partially maintaining garment workers’ wage during the 2021 lockdown, and supporting small and medium enterprises.

“COVID-19 ate our hard-earned money, which is equivalent to eating a bridge or [any other project] we planned to build,” Hun Sen said.

Toch Channy, spokesperson for the Ministry of Social Affairs, said that for the past 22 months, from June 2020 to April 2022, the government has spent $653.26 million on the ID Poor program, to support 686,773 families (which represent around three million people).

He said that this emergency intervention has helped ease the burden on the lives of the poor and vulnerable households who hold the ID Poor card in both urban and rural areas across the country.

Every month, some families get $50, some $100 and some $150 depending on their situation. Even if the COVID-19 ends, the ministry will implement another project to continue to support them based on the study and evaluation. 

“This program will continue until the end of COVID-19,” said Channy. “But, as we don’t know exactly when the pandemic will end, the beneficiaries will still get the money until further notice.”

With COVID-19 impacting people’s livelihoods, the government had to financially support its citizens. But this money has to be used in the most profitable way possible, like planting vegetables or investing in their small business, Channy suggested.

Vongsey Visoth, secretary of state at the Ministry of Economy and Finance said that prior to the pandemic crisis, the government had saved about $3.5 billion. But since the onset of the COVID-19 outbreak in 2020, the state has been wasting its savings.

In a public forum on "Macroeconomic Management and Budget Law 2022" on Feb. 18, Vongsey Visoth said that in 2020, the state spent $246 million while in 2021, public spendings went up to $1.38 billion, due to the pandemic.

Being the ASEAN chairmanship in 2022, Cambodia will have to spend an additional $40 to $50 million, on top of the ongoing fight against COVID-19. The organization of commune elections, which will take place on June 5, are believed to cost the State around $70 million.

“In 2022, we plan to spend another $500 million, so our past savings [$3.5 billion] are starting to dwindle,” Visoth said.

 Despite Cambodia's high public spendings, Visoth remains optimistic as the government didn’t have to borrow money from abroad, while other countries, with less public savings, didn’t have any other financial option to cope with the COVID-19 crisis, mechanically increasing their external debt.