Technical Assistance Consultant s Report

Transcription

1 Technical Assistance Consultant s Report Project Number: Regional Capacity Development Technical Assistance (R CDTA) August 2012 The Kingdom of Cambodia: Updating and Improving the Social Protection Index (Cofinanced by the Republic of Korea e-asia and Knowledge Partnership Fund) Prepared by Chey Tech For Asian Development Bank This consultant s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project s design.)

2 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank AusAID Australian Agency for International Development BETT Basic Education and Teacher Training CARD Council for Agricultural and Rural Development CBHI Community Based Health Insurance CDC Council for the Development of Cambodia CDCF Cambodian Development Cooperation Forum CDHS Cambodia Demographic and Health Survey CESSP Cambodia Education Sector Support Project CHES Children s Empowerment through Education Service CMDG Cambodian Millennium Development Goal CRC Cambodian Red Cross CSES Cambodian Socio-Economic Survey DAC Development Assistance Committee (OECD) DMC Developing Member Country DP Development Partner ECD Early Childhood Development EEQP Enhancing Education Quality Project EFA EFG Education For All Employment Guarantee Fund FFW Food for Work FTI Fast Track Initiative GDCC Government Donor Coordination Committee GDP Gross Domestic Product GNI Gross National Income HEF Health Equity Fund HIES Household Income Expenditure Survey HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome IDPoor Identification of Poor Households ILO International Labour Organization IWG-SSN Interim Working Group on Social Safety Nets M&E Monitoring and Evaluation MAFF Ministry of Agriculture Forestry and Fishery MDG Millennium Development Goal MEF Ministry of Economy and Finance MoEYS Ministry of Education, Youth and Sports MoH Ministry of Health MoI Ministry of Interior MoLVT Ministry of Labour and Vocational Training MoP MoRD MSW Ministry of Planning Ministry of Rural Development Ministry of Social Welfare MoSVY Ministry of Social Affairs, Veterans and Youth Rehabilitation MoWA Ministry of Women s Affairs NCDM National Committee for Disaster Management NPA-WFCL National Plan of Action on the Elimination of the Worst Forms of Child Labour

3 NP-SNDD National Program on Sub National Democratic Development NPRS National Poverty Reduction Strategy NSDP National Strategic Development Plan NSPS-PV Cambodia National Social Protection Strategy for the Poor and Vulnerable NSSF National Social Security Fund OD Operational District ODA Official Development Assistance PTR Poverty Targeting Rate RGC Royal Government of Cambodia SESDP Second Education Sector Development Project SP Social Protection SPI Social Protection Index TB Tuberculosis TOR Term of Reference TVET Technical and Vocational Education and Training WB World Bank WFCL Worst Forms of Child Labour WFP World Food Program WI Winrock International

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5 CONTENTS I. INTRODUCTION 1 A. Background 1 B. The Definition of Social Protection 1 C. Report Structure 3 II. COUNTRY OVERVIEW 4 A. Geography 4 B. Demographic Profile 4 C. The Economy 4 D. Poverty Profile 5 E. Labour and Employment 6 F. Education 7 G. Health 7 III. SOCIAL PROTECTION ACTIVITIES AND PROGRAMS 8 A. Data Collection 8 B. Social Assistance 8 C. Social Insurance 10 D. Labor Market Programs 11 IV. SOCIAL PROTECTION INDEX AND ITS DISAGGREGATION 13 A. Basic Statistics 13 B. Social Protection Expenditure and Beneficiaries 14 V. ANALYSIS OF THE COUNTRY RESULTS 17 A. Disaggregation by Social Protection Category 17 B. Disaggregation by Depth and Breadth 17 C. Disaggregation by Poverty 18 VI. CONCLUSION AND RECOMMENDATIONS 19 A. Structure of the SPI 21 B. SPI s Major Disaggregation 21

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7 I. INTRODUCTION A. Background 1. Asian Development Bank s (ADB) development of the social protection index contributed to the strengthening of social protection programs in developing member countries (DMCs). ADB continues its work on updating and improving the Social Protection Index (SPI). The SPI update addresses and incorporates lessons learned from two technical assistance projects 1 that developed the SPI for 36 countries in Asia and the Pacific and introduces new components and institutional arrangements to sustain the effective use of social protection indicators in policy analysis and formulation in the DMCs. 2. These initiatives implemented under the ADB commissioned regional technical assistance project 2 seeks to (i) improve the methodology in defining social protection for each DMC in order to ensure comparability among DMCs; (ii) improve data gathering for statistical analysis on social protection; and (iii) develop capacity of DMCs in monitoring the SPI and allow comparisons between countries and over time on implementation performance. 3. This country study provides updated information and data on social protection programs and calculates the SPI for Cambodia in view of the revised SPI methodology. The SPI can be updated periodically to assess progress in social protection arrangements in the country and analyse deeper aspects of targeting, coverage and expenditures on various social protection programs; for example, on the breadth (coverage) of social insurance versus social assistance or labour market programs, or on the depth (size of benefit) of various categories of social protection. The revised SPI methodology also provides scope to measure the gender responsiveness of programs, and poverty targeting of programs. 4. The primary objective of the Cambodia Country Report is to present the results on social protection programs and policies in Cambodia from relevant government agencies in Cambodia particularly the Cambodia Development Council, Council for Agriculture and Rural Development, and National Institute of Statistics; and, summarize quantitative information on these activities to enable the formulation of a national Social Protection Index (SPI). B. The Definition of Social Protection 5. Social protection is defined as the set of policies and programs designed to reduce poverty and vulnerability by promoting efficient labor markets, diminishing people s exposure to risks, and enhancing their capacity to protect themselves against hazards and interruption/loss of income. 6. This definition categorizes all programs under the traditional components of social protection as social insurance, social assistance and labor market programs. Microfinance as a form of social protection is excluded from the calculation of SPI since it does not involve a transfer in cash or kind and beneficiaries incur loans or debt instead of transfers. Thus, by eliminating microfinance from the coverage of social protection programs, three major programs 1 ADB Technical Assistance for Social Protection Index for Committed Poverty Reduction. Manila (TA REG); ADB Technical Assistance for Scaling Up of the Social Protection Index for Committed Poverty Reduction. Manila (TA 6308-REG).REG-TA 6120: Developing a Social Protection Index for Committed Poverty Reduction and REG-TA6308: Scaling Up of the Social Protection Index for Committed Poverty Reduction 2 ADB Technical Assistance for Updating and Improving the Social Protection Index. Manila (TA 7601-REG).

8 2 are left: (i) social insurance (i.e., the categories of old-age insurance, programs for the disabled, and health expenditure on insurance and pensions; (ii) social assistance (i.e., the categories of non-contributory health insurance, conditional cash transfers, child protection, and unconditional cash transfers; and (iii) labor market programs as shown in Table 1. Table 1: Social Protection Categories and Types of Programs Social Protection Category Type of Program Social Insurance Programs Pensions Unemployment Benefits Health Insurance - but not universal health insurance Other social insurance (maternity, disability benefits) Social Assistance Assistance for the elderly (e.g., non-contributory basic allowances for the elderly, old-age allowances) Health assistance (e.g., reduced medical fees for vulnerable groups) Child protection (school feeding, scholarships, fee waivers, allowances for orphans, street children initiatives) Family allowances (e.g., in-kind or cash transfers to assist families with young children to meet part of their basic needs) excluding any transfers through the tax system Welfare and social services targeted at the sick, the poor, the disabled, and other vulnerable groups Disaster relief and assistance Cash/in-kind transfer (e.g., food stamps, food aid) Temporary subsidies for utilities and staple foods - only if imposed in times of crisis and if targeted at particular vulnerable groups. General subsidies are excluded even if their rationale is to assist the poor Land tax exemptions Labor Market Programs Direct employment generation through public works programs including food for work programs Direct employment generation through loan-based programs included if loans are subsidized and/or job creation is an explicit objective of the program Labor exchanges and other employment services if distinct from social insurance and including retrenchment programs Unemployment benefits if distinct from social insurance and including retrenchment programs Skills development and training included if targeted at particular groups (e.g., the unemployed or disadvantaged children. General vocational training is excluded). Source: ADB The Revised Social Protection Index: Methodology and Handbook. Manila. 7. The Constitution of Cambodia 3 is the framework for the scope of social protection provision to all citizens. It covers the right of all citizens to obtain social security and other social benefits, as well as provide special provisions for social security in the formal sector. The Constitution also identifies particular groups that may require special assistance, such as poor 3

9 3 women and children, people living with disabilities, and the families of combatants who have died serving their country. 8. The Constitution of Cambodia addressed the various forms of social protection for Cambodian people, including rights of citizens and responsibilities of the Government which are related directly or indirectly to social protection. Article 36: Every Khmer citizen shall have the right to obtain social security and other social benefits as determined by law. Khmer citizens of either sex shall have the right to form and to be member of trade unions. The organization and conduct of trade unions shall be determined by law. Article 46: The commerce of human beings, exploitation by prostitution and obscenity which affect the reputation of women shall be prohibited The state and society shall provide opportunities to women, especially to those living in rural areas without adequate social support, so they can get employment, medical care, and send their children to school, and to have decent living conditions. Article 72: The health of the people shall be guaranteed.poor citizens shall receive free medical consultation in public hospitals, infirmaries and maternities. The State shall establish infirmaries in rural areas. Article 75: The State shall establish a social security system for workers and employees. 9. Government legislation also provides provisions that support social protection components; particularly labor market programs, social assistance, and social insurance. The Labor Law 4 (1998) complies with most of the International Labour Organization s conventions on core labor standards. The Law on Social Security Schemes for Persons Defined by the Provisions of the Labor Law (2002) entitles all workers defined by the provisions of the Labor Law to medical, disability and survivor benefits. Also, the Insurance Law 5 (2000) provides a legal framework for better regulation of insurance market activities. C. Report Structure 10. The Cambodia report is structured as follows: (i) (ii) (iii) (iv) (v) Chapter II contains a brief overview of the social and economic development in Cambodia. Chapter III describes the current SP activities and programs in the country using ADB s typology. Chapter IV provides an overview of the derivation of SPI and its disaggregation. Chapter V presents the analysis of the country results. Chapter VI discusses policy assessment and implications. 4 GoCambodia:Laws. Law on Labor. 5 Insurance Law of the Kingdom of Cambodia. Unofficial Translation.

10 4 II. COUNTRY OVERVIEW 11. This chapter presents a brief overview of the socio-economic characteristics of Cambodia, main features of the country s current developmental situation and recent trends. A. Geography 12. The Royal Government of Cambodia is a coastal country in a dynamic region in Southeast Asia, bordering the Gulf of Thailand, between Thailand, Viet Nam, and Laos. The country lies in the tropics and consists of rolling plains and landforms such as the Tonle Sap Lake and the Mekong River that traverses the country as it flows through the Mekong lowlands to the South China Sea. B. Demographic Profile 13. Emerging from almost three decades of conflict and instability, the country is continuing a process of regional integration and economic growth after the UN mandated resolution for a ceasefire and withdrawal of foreign forces under the Paris Peace Agreement in The total population estimate for Cambodia is about million in 2009 and million in with an estimated 1.2% annual rate of population change between There is an annual increase of 1.65% in 2009, with a slightly predominant female population of 51.4%. Cambodia also has a relatively young population with almost one-third (32%) of the population at 15 years old and below in Eighty percent of Cambodia s population lives in the rural areas although the trend of urbanization is increasing. Cambodia also has a relatively young population with approximately half of the population below 20 years of age, and about 250,000 youth entering the workforce each year The average household size in Cambodia is estimated to be 4.7. Furthermore, the estimated average population density is 81 persons per square kilometer. In terms of population distribution, over 83% of the population live in rural areas while 17% of population live in other urban areas. 16. Ethnically, the population consists of 95.7% Khmer, 2.4% Islam (Cham), 0.1% percent Chinese, 0.4% Vietnamese, and other 1.4%. In addition, Buddhist is the predominant religion in Cambodia, accounting for more than 90% of total population most of which is Khmer, followed by 5% Islam (Cham), and a small percentage of Christian and other spiritual beliefs. C. The Economy 17. The Cambodian economy has undergone structural transformation since 1991 as a result of greater integration with the global economy. There is a movement of jobs from agriculture to service sectors, demographic transition, and migration from rural to urban areas. Cambodia has enjoyed robust economic growth of about 11 % per annum from World Bank. World Development Indicators (WDI) and Global Development Finance (GDF). 7 United Nations Department of Economic and Social Affairs. World Population Prospects: The 2010, Volume II: Demographic Profiles. 8 National Institute of Statistics Cambodia Socio-Economic Survey (CSES). 9 United Nations Cambodia Common Country Assessment Cambodia.

11 5 Despite achieving a poverty reduction rate of 1.2% per year, 2009 poverty data reveal that around 27.4% of Cambodians (about 3.82 million people) still live below the poverty line. As a result of the consolidated peace process since early the 1990s, the country has transitioned from a centrally-planned to a free market-oriented economy. 18. Cambodia experienced a period of rapid economic growth for almost a decade. The economy performed strongly with an average 9.8% growth rate 10 prior to the 2009 global economic crisis although the economy recovered the following year. Despite the period of sustained growth, the economic benefits still have to reach most of the rural areas where the vast majority of the population resides. 19. The export-driven economic growth in the country led to infrastructure development and an influx of foreign-direct investment. Other direct sources of economic growth include tourism; industry and services, particularly construction; agriculture; and, the garment industry benefiting from preferential arrangements under the Multi-Fiber Arrangement (MFA), with quota agreements complying with core labor standards. In contrast, the agricultural sector experienced a period of stagnation due to severe flooding over the last 6-7 years. Cambodia is also highly dependent on aid. According to the Paris Declaration Survey 2011, official development assistance to Cambodia totaled $884.5 million 11. D. Poverty Profile 20. The rise in food and fuel prices in 2009 exacerbated the economic gains achieved in the last 10 years and contributed to the growing socio-economic inequality in the country. The global financial crisis caused job losses and decreased remittance flows to rural areas, affecting 30% of the population who still live below the national poverty line of $0.60 a day 12. A recent study by Cambodia s Ministry of Planning and the World Bank in 2009 suggest that Cambodia s poverty headcount has been reduced from 47% in to 27.4% in 2009, or around 1% per annum. Despite the progress in reducing poverty, the country still needs to identify further sources of economic growth in order to achieve its commitment to the Millennium Development Goals by 2015, which would require an average poverty reduction rate of 1.5% per annum. 21. The Royal Government of Cambodia s commitment in alleviating poverty through social protection is reflected in the Rectangular Strategy introduced after the formation of the new Government in July The strategy has been conceptualized as a structure of three interlocking rectangles, with the rectangles most closely linked to social protection consisting of: i) enhancement of the agricultural sector; ii) private sector growth and employment; and iii) capacity building and human resource development. 22. The Rectangular Strategy outlines the Government s poverty reduction strategy, operationalised by the National Strategic Development Plan (NSDP) that presents the key sector strategies for achieving the Cambodian Millennium Development Goals poverty reduction targets. The NSDP recognizes the need to address rural development including improving the livelihoods of the rural poor, creating jobs in the formal and informal sectors, ensuring improved working conditions, and providing social safety nets for the vulnerable and disadvantaged. 10 World Bank Cambodia: Sustaining Rapid Growth in a Changing Environment. Country Economic Memorandum Report No Washington, DC. 11 UNDP Annual Report 2010: Empowered Lives, Resilient Nations. Cambodia. 12 UNDP.

12 6 23. In response to Cambodia having one of the highest disparities between the rich and poor in Asia, the Government adopted the National Strategic Development Plan (NSDP) in April 2010 and engaged development partners in preparing the National Social Protection Strategy for the Poor and Vulnerable (NSPS) that will protect the rural poor against shocks and focus agricultural development as a source of sustainable livelihood. E. Labour and Employment 24. Between 2004 and 2009, the population in Cambodia increased by 1.3 million or 10.3% according to the Ministry of Planning in During the same period, the working age population increased almost as much as the population, from 6.7 million to 8.9 million or 16.8%. The increase of the working age population resulted in decreasing dependency ratio from 67% in 2004 to 58% in In contrast to the rapidly increasing working age population, the labor force participation rate fairly slowed by 2.7%. In Phnom Penh, the labor force participation rate remained unchanged. The labor force participation rate fell by 1.7% in other urban areas but increased by 3.5% in other rural areas. 26. According to the Cambodia Development Research Institute (CDRI) projection in 2010, about 3% are unemployed, while about 80%-90% are in the active labor force. Table 2 presents an overview of Cambodia s population and labor force. Table 2: Population and Labor Force, years (in %) Cambodia Phnom Penh Other urban Other rural Total population (000) 13,967 1,383 1,428 11,156 Total working age (000) 8,864 1, ,907 population Labour force (000) 7, ,055 Labour force participation rate (%) Both Sexes Women Men Employment rate Both Sexes Women Men Unemployment rate Both Sexes Women Men Source: Cambodia Socio-Economic Survey (CSES), Almost half of the population in Cambodia is employed as skilled agricultural, forestry and fishery workers. Nearly twice as many women than men are employed in the service and sales industries. In addition, the results of Child Labor Survey (2001) estimate that 2.3 million or 53% of children (aged 5 to 17) are considered to be economically active.

13 7 F. Education 28. Poor access to quality education is a source of vulnerability for young Cambodians. The lack of basic school facilities, shortage of textbooks, and inadequate supply of trained teachers are key constraints. Cambodia suffers in particular from a severe shortage of teachers in primary and secondary education. Dropout rates along with low educational outcomes remain a concern along with particular challenges in writing and mathematics. While enrolment rates are high in primary school (82%), attendance decreases sharply to 29% when students reach lower secondary schools, decreasing more considerably to 13% in upper secondary school. Children in rural areas are more than twice less likely to continue lower secondary school (25%) than children in Phnom Penh (61%). Table 3 shows the enrollment rates by gender. Table 3: Enrolment Rates and Gender Disaggregation (in %) Description Primary Schools (000) 6,635 6,685 6,785 Net Enrollment Total Boys Girls Completion Rate at Grade Lower Secondary Schools (000) 1,451 1,521 1,600 Net Enrollment Total Boys Girls Completion Rate at Grade Literacy years Source: National Strategic Development Plan Update , 2011 G. Health 29. Cambodians experience high costs of access and utilization of essential healthcare services. Total annual health expenditure is about US$119 per capita, which is 5.8 percent of GDP 13. Access to quality healthcare is limited for the poor due to inaccessibility and limited operational hours of health facilities; high transportation costs; and, lack of qualified health staff, equipment, and, medicine in remote facilities. Serious outcomes of poor access to quality health care are persistently high maternal and under five mortality rates. Children in the poorest quintile are almost three times at risk of dying before the age of five than those in the highest wealth quintile The negative consequences of health shocks are often detrimental to the poor and vulnerable and can drive near-poor households into irreversible and damaging poverty with serious, long lasting consequences. Health shocks affect poor households with higher prevalence of injuries and illnesses, lesser savings, and mostly trapped in a vicious cycle of high health care costs and debt. Once the cycle starts, it is very difficult to escape. Thus, it is important to prevent the poverty cycle by tackling high health care costs and out of pocket expenditures at the onset World Health Organization Cambodia s Millennium Development Goals Report CARD National Social Protection Strategy for the Poor and Vulnerable.

14 8 31. The elderly, people living with chronic illness, and the disabled often depend on assistance from communities and other poor relatives to survive. The elderly need special care given their limited ability to participate in economic life. Cambodia s elderly have lower health status than older adults in neighboring Asian countries. Even marginal reductions in wealth can result in substantial rises in health problems among the elderly. Elderly women are particularly vulnerable with 10% being sole adults in the household, compared to only 2% for elderly men. 32. Cambodians living with chronic illnesses have very little support to pursue independent and sustainable livelihoods. Children in these households are often at greater risk. According to the Cambodia Demographic and Health Survey (CDHS) in 2005, children with chronically ill parents are significantly less likely to have basic possessions (e.g., shoes, two or more sets of clothes, etc.). In a 2004 study, monthly per capita household income is 42% lower in HIVaffected households. Cambodia has the highest rate of prevalence of HIV/AIDS in the region and also ranks 21st among the countries with the highest burden of tuberculosis with an estimated 64% of Cambodians infected with M. tuberculosis. The twin burden of tuberculosis and HIV epidemics can have severe consequences on poor and vulnerable households. 33. Cambodians living with disability also have little assistance and often rely on limited family support to survive. Very few people living with disability have access to rehabilitation and basic services. Their vulnerability goes further than mere lack of financial resources at the individual or family level to encompass cultural and social barriers such as inadequate availability and access to education, health and rehabilitation services; lack of rights awareness; and economic dependency on employed members of the household. III. SOCIAL PROTECTION ACTIVITIES AND PROGRAMS 34. This chapter presents an overview of the data collection process, objectives, and current social protection activities in the Royal Kingdom of Cambodia including challenges and difficulties encountered during the course of the study. The two-fold objectives of this chapter is to present the main features of the social protection programs in the country and provide quantitative information that will serve as the basis for the formulation of the Social Protection Index. A. Data Collection 35. There are 9 major existing social protection programs in Cambodia. These programs are classified into three major social protection components: (i) social insurance; (ii) social assistance; and (iii) labour market programs. 36. The study used various data collection sources, such as literature and desk review, interviews of relevant government officials and project directors, and statistics and information from the Cambodia Development Council (CDC), Council for Agriculture and Rural Development (CARD), National Institution of Statistics (NIS), and international development agencies. B. Social Assistance 37. There are 3 major social assistance programs: (i) Food for Emergency Relief program; (ii) People Living with HIV/AIDS (PLWHA) program; and, (iii) Maternal and Child Health

15 9 program. Despite a strong commitment by the Royal Government of Cambodia to reduce poverty by targeting the most poor, the annual budget expenditure on social assistance is to some extent, limited. Most Government expenditure on social assistance are in-cash or in-kind transfers to the poor, channeled through the Ministry of Social Affairs, Veterans and Youth Rehabilitation and the National Committee for Disaster Management (NCDM). These benefits include food-aid relief and housing rehabilitation for the poor. In addition, the Royal Palace has also allocated some budget for social assistance, through His Majesty the King, although the amount of expenditure cannot be quantified. 1. Food for Emergency Relief 38. The Food for Emergency Relief program targets households affected by drought, resulting in crop damage and food insecurity. Many drought-prone areas in Cambodia require food relief assistance to address gaps in food access and availability. This program has provided economic support in preventing the sale of assets in order to supplement household income affected by natural disasters. The relief distributions were implemented in collaboration with the National Committee for Disaster Management (NCDM) 16 and NGO partners. In 2009, about 0.7 US$ million worth of rice was released to 84,205 beneficiaries. 39. The World Food Program (WFP) also provides food assistance to tuberculosis patients in Cambodia to supplement nutrition, offer incentive to complete treatment, and provide the needed income transfer during illness. The World Health Organization (WHO) classifies Cambodia as one of the 22 high burden countries with tuberculosis in the world 17. The disease is more severe in rural areas, particularly affecting the poor and vulnerable population. Food assistance programs help tuberculosis patients stay in medical care and complete their treatment. In 2009, about $2.9 million worth of rice was released to 38,268 beneficiaries. 2. PLWHA Program 40. The (People Living with HIV/AIDS or PLWHA program targets vulnerable groups affected by HIV/AIDS. The PLWHA program was established by the WFP and implemented in collaboration with the National Centre for HIV/AIDS, Dermatology STI (NCHARDS) of the Ministry of Health, and non-governmental organizations. In 2009, about $4.2 million worth of rice was released to 75,879 beneficiaries. 3. Maternal and Child Health Program 41. The Maternal and Child Health (MHC) program aims to reduce the number of underweight children under the age of five, increase awareness of child nutrition and health practices, and build the capacity of health care center staff and village health volunteers in program monitoring. About 63,000 pregnant and lactating women and children under the age of five received nutritional food supplements and health education to aid specific food and nutritional needs. The WFP also provided fortified blend food, rice, vegetable oil, and sugar to enhance the nutritional status of mothers and children, which are the target beneficiaries of the program. 16 CARD National Social Protection Strategy for the Poor and Vulnerable. 17 ADB (2011): Handbook for the Revised Social Protection Index

16 10 C. Social Insurance 42. The Royal Government of Cambodia has two major social insurance programs implemented by the Ministry of Social Affairs, Veterans and Youth Rehabilitation (MoSVY) and Employment Guarantee Fund. These programs are pension and health insurance. 1. Pensions 43. The Royal Government of Cambodia pays a pension to an extensive number of its retired civil servants, military, police, disabled people and dependents. The private sector, donors and NGOs also offer pensions to their employees in compliance with the Labour Law. This is normally in the form of a withholding percentage of salary that will be paid as a lump sum upon completion of contract or upon retirement. 44. In 2009, average payments by the Ministry of Social Affairs, Veterans and Youth Rehabilitation (MoSVY) to its civil servants, military, police, disabled people and military, and their dependents, is estimated to be about $ million; benefiting 119,807 persons. Table 4 shows the pension schemes and their beneficiaries. Type of Pensioners Table 4: Type of Pension Schemes and Beneficiaries Estimated Number of Beneficiaries Retired civil servants 19, Retired military 5, Disabled military (retired) 31, Disabled civil servant (retired) 5, Dependents of dead patriot military 54, Dependents of dead civil servants 4, Total Source: Annual report of MoSVY and CARD; and interviews, Social and Health Insurance Amount of Benefits (in million, USD) 45. There has been some success in piloting community social health insurance schemes, which have been recently operated and assisted by donors and non-governmental organizations. A few NGOs have operated this scheme targeting the rural poor and urban community. 46. There are a number of health reform proposals that have been adopted by the Government, including official user fees, sub-contracting government health services delivery to nongovernmental providers, and Community Based Health Insurance (CBHI). These approaches have tended to reduce the burden of the poor on public health services. As the result of these reforms, Social Health Insurance policies (SHI), led by the Ministry of Health (MoH) is being devised. This policy includes developing legislative and guidance Social Health Insurance (SHI) schemes; with substantial technical support from various donors including GTZ, the World Bank, ADB, and other development agencies. There are legitimate concerns that a mandatory SHI scheme for the private sector may raise labor costs that they could threaten or damage the competitiveness of the economy.

17 The establishment of SHI would possibly emerge from the Health Equity Fund (HEF), a new model for financing health of the poor, and microfinance institutions. The Ministry of Health (MoH) and NGOs have provided financial support for the HEF. The Ministry of Health, in collaboration with donors and NGOs, considered shifting HEF to be a Health Insurance Scheme (HIS). HEF aims to ensure financial sustainability, with the poor paying premiums as a member of HIS. All patients are identified and classified into poor or very poor households in the community and provided with health card certificates. This certificate of identification can be shown to provincial, district, and healthcare centers to receive subsidized or free services. Transportation costs and meals are covered. As of 2006, 33,122 people received consultation and 38,705 people received hospitalization benefits. 48. In the absence of a public health insurance scheme, a few NGOs have been operating Community Based Health Insurance schemes (CBHI) in Cambodia. These include the Cambodian Organization for Assistance to Families and Widows (CAAFW), which emerged from HEF, and microfinance schemes that operate in the Banteay Meanchey province, requiring each member to pay around $3 per annum as a membership fee ($1 being subsidized by the organization). Another example of a CBHI scheme is the Sky Health Insurance Project operated by a French NGO, Groupe de Recherche et d'echanges Technologique (GRET). The Sky Health Insurance Project prevents poor rural households from selling their productive assets, secures the income of rural Cambodian households by providing protection from large health expenditures caused by illness and accidents; and, facilitates access to appropriate quality health care. The project operates in two provinces, Takeo and Kandal, with sub-contracting to a referral hospital, district hospital, and a government health center. D. Labor Market Programs 49. The major labor market programs in Cambodia are the Vocational Training Program, Skills Training program, and the Food for Asset program. The three ministries working to generate potential employment opportunities for the poor in Cambodia are the (i) Ministry of Labour and Vocational Training (MoLVT); (ii) Ministry of Social Affairs, Veterans and Youth Rehabilitation (MoSVY); and, (iii) Ministry of Women s Affairs (MoWA). 1. Vocational Training Program 50. Majority of vocational training programs is under the jurisdiction of the General Directorate of the Department of Technical Vocational and Educational Training (TVET), and the Ministry of Labour and Vocational Training (MoLVT). There are currently 40 training centers that provide short-term and long-term training courses. The short-term training courses target poor households and are designed to be demand-driven, with a training period between one to four months. The Technical and Vocational Training (TVET) provides mobile training centers to poor communities. These short-term training courses include agricultural development, handicraft, industry, and services. In 2005, the Government supported 13,000 students who received shortterm vocational training in Cambodia, at $60 per student for two months. In comparison, longterm training courses provide training modules and an associate degree, which can take up to two years. 51. Vocational training programs are conducted through the municipal and provincial centers in collaboration with NGOs and other development agencies. Vocational training programs are based on labor market needs to expand the National Employment Policy in accordance with the policy on vocational training. Other NGOs and development agencies also provide capacity

18 12 building through vocational training and micro-finance to poor households, aiming to increase income-generating activities. The MoSVY also provides vocational training for disabled people that aim to improve income-generating activities of target beneficiaries. In 2005, there were 9 state-run rehabilitation centers that offered vocational training to 1,318 disabled persons, with 1,058 persons securing employment in industries such as the private sector. 2. Skills Training Program 52. The Department of Family Economic Development of the Ministry of Women s Affairs (MoWA) through Women in Development (WID) centers provides training skills for orphans, widows, and poor female head of households. Skills-training areas include make-up, sewing, handicraft, and services. The courses last an average of one and a half months. 53. There are 20 training centers, seven of which are under WID, and located in different provinces. The Government, development agencies, and private foundations provide financial support to these centers. In 2003, there were roughly 2,447 beneficiaries who received training skills from MoWA at an estimated $0.110 million. 3. Food for Asset Project 54. The World Food Program in 2009, provided rice through food-for-work in local communities under the Food for Asset Project. This program aims to reduce risk and impacts associated with natural disasters. The remuneration of work for vital food commodities provides villagers with a stake in the asset they are constructing (e.g., rehabilitated roads, constructed ponds, raised paddy field bunds, etc). The vast majority of beneficiaries are the poor that provide labor skills in a village project. Table 5 presents expenditures and beneficiaries of labor market programs in Cambodia. Table 5: Labor Market Programs Expenditures and Beneficiaries ( ) Expenditures (US$ millions) Beneficiaries (000s) SP Programs Male Female Male Female Short-term training course to the poor households Provide training skills for orphans, window, and poor female headed households Food for work Food for work (emergency food assistance project) Cash for work (emergency food assistance project) Source: Country sources Note: Figures derived based on 2009 Gender Target Rates

19 13 IV. SOCIAL PROTECTION INDEX AND ITS DISAGGREGATION 55. The revised Social Protection Index (SPI) is a unitary indicator that can be disaggregated for analytical purposes. 56. The revised SPI is calculated by Total Social Protection Expenditures per Total Potential Beneficiaries by 25% of the GDP per capita (representing average poverty line expenditures). In other words, the total social-protection expenditures spread across all potential beneficiaries are compared to poverty-line expenditures in each country. 57. The revised SPI can be disaggregated into two components, one for the depth of coverage and the other for the breadth of coverage of social protection programs. The first indicator is the Total Social Protection Expenditures divided by the Total Actual Beneficiaries (i.e., the average size of benefits actually received or depth ). The second indicator is the Total Actual Beneficiaries divided by the Total Potential Beneficiaries (i.e., the proportion of potential beneficiaries actually reached or breadth ). 58. The revised SPI can also be disaggregated by the major categories of social protection programs: social insurance, social assistance and labor market programs. When the total expenditures per total potential beneficiaries for each major program are weighted in population terms, the program SPIs add up to the total SPI. 59. Furthermore, the revised SPI can also be disaggregated by expenditures per potential poor and non-poor beneficiaries. Finally, gender-wise data allows the disaggregation of expenditure by gender. 60. The derivation of the SPI for poor and non-poor and the SPI women and men used poverty and gender targeting rates. The rates are based on the results of household surveys; administrative reports of social protection implementing agencies; and in some instances, on the professional judgment of the consultants. A. Basic Statistics Statistic GDP (current prices) GDP per capita (current prices) GNI (current prices) Table 6: Cambodia Basic Statistics for 2009 Unit Millions (US$) 2009 Value Source of Data Notes 6,917 Strategic National calendar year Development Plan (SNDP) Updated calendar year US$ 731 Strategic National Development Plan (SNDP) Updated Billion (Riel) 42,683 uments/books/key_indi cators/2011/pdf/cam.p df Total Population Millions 14 Cambodia Socio- Economic Survey 2009 Calculated to GNI Per Capita

20 14 Statistic Number of unemployed/ under-employed Population aged 60 years and over Employed Population Population living below national poverty line Disabled population Children aged 0 to 14 years Disaster affected population Per capita poverty line income (annual) Average 2009 Unit Value Source of Data Notes Millions 1.8 National Accounts 2008 Millions 0.5 National Census 2008 Mid-year population estimate Millions 7 National Accounts Millions 3.8 Strategic National Development Plan (SNDP) Updated Millions 0.3 Ministry of Social Welfare (MSW) Millions 4.9 Strategic National Development Plan (SNDP) Updated Millions Beneficiaries sheet US$ 468 Cambodia Socio- Economic Survey 2009 persons 4.7 National Census 2008 household size Exchange rate US$1= 4,148 Strategic National Development Plan (SNDP) Updated GDP = gross domestic product, GNI = gross national income Source: Country Sources, 2011 B. Social Protection Expenditure and Beneficiaries estimate from MSW Mid-year population estimate Year Average 61. The total expenditure on social protection activities in Cambodia for 2009 is about $68 million or roughly 1% of GDP. Social assistance programs accounted for almost 58% of government expenditure compared to 26% government spent on social insurance programs. Expenditure on the remaining components of social protection (i.e., labor market, social assistance and child protection programs) amounted to more than 16% of the total. Table 7: Social Protection expenditure by Category 2009 Annual Expenditure (million USD) Percent (%) Pensions Health Insurance 1.0 1

21 15 ALL Social Insurance Health Assistance Child Protection Disaster Assistance and Relief Other Social Assistance ALL Social Assistance Labor Market Programs Total SP Expenditure GDP (million USD) 6,917 SP Expenditure Indicator 1.0% Source: Country Sources, The largest social protection program coverage are the social assistance programs with more than 3 million beneficiaries, almost 15 times the number of the next largest category the social insurance programs with 398,000 beneficiaries. Labor market programs have 229,362 beneficiaries. Table 8: Expenditures and Beneficiaries of Social Protection Programs Social Assistance Program Implementing Agency Detailed Category 2009 Expenditure (Million USD) 2009 Beneficiaries (000s) Civil Service Pensions MSW PEN Health insurance for garment factory employees Medical allowance for AIDS patients EGF HI MoH HA Food assistance to Tuberculosis-TB patients MoH and MSW OSA Food assistance to people living with HIV/ AIDS Food to vulnerable groups affected by natural disasters and food insecurity MoH OSA MSW DA Short-term training course to poor households MoVLT LMP Providing training skills for orphans, widows, and poor female head of households MoWA LMP

22 16 Social Assistance Program Implementing Agency Detailed Category 2009 Expenditure (Million USD) 2009 Beneficiaries (000s) Child Labor Programs MoVLT OSA Emergency food assistance project (free distribution of rice) General food distribution (Ketsana) Maternal and child health and nutrition program Fast Track Initiative-FTI (grade 4-6) MEF OSA NCDM OSA MoH HA MoEYS CP Cambodia Education Sector Support Project-CESSP (grades 7-9) MSW CP Food for work MoRD LMP Food for work (emergency food assistance project) Cash for work (emergency food assistance project) Health Equity Fund-HEFs in 50 Ods MEF LMP MEF LMP MoH HA School - Feeding Program MoEYS CP Enhancing Education Quality Project-EEQP (grades 10-12) MoEYS CP Emergency food assistance project (grades 5-6 & 8-9) Emergency food assistance project MEF CP MEF OSA Total 29 2,889.0

23 17 Note: PEN-Pensions, HI-Health Insurance, UB-Unemployment Benefits, HA- Health Assistance, CP- Child protection programs, DA- Disaster relief and assistance, OSA- Other social assistance, LMP- Labour Market programs Source: Country Sources, Coverage rates for these target groups are obtained by aggregating beneficiaries from all programs of this target group. Beneficiaries from some programs can fall into more than one target group (e.g., recipients of civil service pensions can also be poor; and the school feeding program is both a social assistance and a child protection program). There can also be overlaps with children benefiting from school feeding programs also benefiting from educational assistance programs. Furthermore, some programs can be assigned to more than one target group; although overlaps need to be excluded. However, this is not a significant issue in Cambodia since coverage rates are generally low and there are few overlaps. V. ANALYSIS OF THE COUNTRY RESULTS 64. This chapter presents the results of the SPI calculations and its disaggregation into the three categories social insurance, social assistance, and labor market programs. Further disaggregation by depth and breadth of coverage, by poor or non-poor, and by women or men is also discussed. A. Disaggregation by Social Protection Category 65. The SPI represents the average expenditure per beneficiary as compared to the poverty line expenditures (set at 25% GDP per capita). For Cambodia, the overall SPI is 0.020, which implies that on the average the government expenditures on social protection are about 2.0% of the poverty line expenditures. As shown in Table 9, among the three categories, social assistance has the highest SPI at 0.012, while social insurance and labor market programs have and 0.003, respectively. These indices for social insurance, social assistance and labor market programs indicate that the per capita government expenditures are about 0.5% 1.2% and 0.3%, respectively of the poverty line expenditures. Table 9: Disaggregation by Category Social Insurance Social Assistance Labor Market Programs All SP Programs Total SP Expenditure (Million USD) Beneficiaries (000s) 398 3, ,133 Reference Population (000s) 7,536 9,061 1,750 18,347 25% of GDP per capita SPI Source: Consultant estimates, 2011 B. Disaggregation by Depth and Breadth 66. The depth refers to the average size of benefits received by beneficiaries of social protection while the breadth indicates the proportion of potential beneficiaries reached by social protection programs in Cambodia. The 2009 depth index is while the breath is These numbers imply that the average amount receive by beneficiaries is about 9.0% of the poverty line expenditures and these benefits reached about 22.5% of the targeted beneficiaries

24 18 in This suggests that there is wider coverage but the size of benefit received per beneficiary is relatively small. Table 10: Disaggregation by Depth and Breadth Social Insurance Social Assistance Labor Market Programs All SP Programs Depth Breadth SPI Source: Consultant estimates, 2011 C. Disaggregation by Poverty 65. The calculation of this indicator involves a series of assumptions on the poverty targeting rates (PTRs) for different social protection programs and an assessment of the extent of overlaps (i.e., people who benefit from more than one program). 67. In the absence of a comprehensive statistic showing the incidence of poor beneficiaries of the different social protection programs identified in this report, it is necessary to adopt an ad hoc estimation methodology. This involves the assignment of poverty targeting rates (PTRs) or the proportion of beneficiaries who are poor, to each social protection program. Information used to generate these PTRs are from survey data, interviews conducted with program officials, reviews of evaluation studies, and the consultants professional knowledge of these programs. 67. The disaggregated data shows that SPI for the poor is slightly lower (0.008), which means that the social protection expenditure on the poor is lesser compared to the expenditure on non-poor, whose index is The higher index for non-poor can be related to the social protection expenditures of social insurance, whose beneficiaries are employed and are not considered poor. Table 11: Disaggregation by Poverty Status Poor Non-Poor SP Expenditure (Million USD) Reference Population (000s) 18,347 18,347 25% of GDP per capita SPI Source: Consultant estimates, 2011 A. Disaggregation by Gender 68. The gender wise data allows the disaggregation of expenditure by gender. This does not show much variation for men and women for the Kingdom of Cambodia. The SPI for men (0.011) is slightly higher than for women (0.009). However, it should be noted that in the absence of gender disaggregated data, most of the gender targeting data of the programs are at best approximations.