European Union aid

The EU Ambassador to Cambodia, Carmen Moreno, shook hands with Prime Minister Hun Sen at Peace Palace on December 2, 2019. Photo from Prime Minister Hun Sen’s Facebook page.

European Union (EU) has been one of Cambodia’s biggest trading partners and a major development partner since the early 1990s, and this partnership has benefited Cambodia’s development and its integration into the international community.1 Since 1992, Cambodia has received $4.2 billion (19% of total cooperation financing) from the EU partners, 10 EU members, and the Swiss Confederation.2 The EU has partnered with the Royal Government of Cambodia (RGC), civil society organizations, and the private sector to implement sustainable development goals, reduce poverty and inequalities, foster green growth and decent jobs, promote EU values, and improve regional and global integration.3

The EU’s grant aid

The EU programs in Cambodia cover a wide range of areas, namely education and skills, agriculture and natural resource management, governance and administration, human rights, gender equality, public finance management, private sector development, and climate change and the environment. The cooperation activities between the EU and Cambodia have benefited millions of Cambodians.4

On 18 May 2022, European partners (Belgium, Czech Republic, the EU, European Investment Bank, France (with AFD), Germany (including GIZ and KfW), Hungary, Ireland, Sweden, and Switzerland) presented the Joint European Strategy for Development Cooperation with Cambodia 2021 - 2027 to the RGC. H.E. Mr. Jacques Pellet, French Ambassador to Cambodia, said that the strategy aligns with the Rectangular Strategy Phase IV and European partners’ global priorities, contributes to the 2030 Agenda and Sustainable Development Goals, support Cambodia to achieve higher connectivity with ASEAN, and improves regional and global integration.5 The EU commits to spending a total budget of over €1.43 billion (more than $1.5 billion) to implement the strategy by focusing on six interlinked priority areas.6

  1. Strengthening democratic accountability
  2. Fostering democratic participation
  3. Supporting human development
  4. Enhancing Cambodia’s competitiveness in regional and global marketplaces
  5. Managing sustainable green development
  6. Supporting Cambodia’s cultural heritage

Multi-annual Indicative Programme (MIP) 2021-2027 for Cambodia is a tool to implement the Joint European Development Cooperation Strategy. It is expected to have $500 million to further strengthen the cooperation between the two nations by focusing on three priority areas: green growth and decent jobs, education and skills development, and good governance.7 MIP 2021 - 2027 is set to divide into two phases of implementation for the priority areas and support measures, which the first phase is from 2021 - 2024. The allocation budget for 2025 - 2027 will be defined by the result of the first phase implementation and decided by the EU, which should also include a dialogue with Cambodia’s authorities and relevant stakeholders in the country.8

Everything But Arms (EBA)

EBA is a preferential tariff scheme under the EU’s Generalised System of Preferences (GSP), which grants the least developed countries, as defined by the United Nations, duty-free and quota-free when exporting to the EU. As a member of the World Trade Organization since 2004 and a least developed country, Cambodia received a lot of benefits from EBA.9 In 2021, the exports of bicycles, textiles, footwear, processed food, and vegetable products cover 94.2% of the overall exports to the EU, which approximately 93% of them in 2020 were eligible for the preferential duties of EBA.10

According to Annex VIII of the GSP regulation, trade preferences may be suspended when there is serious and systematic violation of principles.11 On 12 August 2020, the EU withdrew 20% of the trade privileges under the EBA trade scheme because of the severe and systematic violations of human rights based on the International Covenant on Civil and Political Rights, which affects the garment, footwear, travel goods, and sugar sectors.12

The EU’s response to COVID-19 in Cambodia

The EU signed an ASEAN-level contract with the World Health Organization (WHO) to invest €2.8 million for the next three years to strengthen the RGC’s capacity to respond to COVID-19 and build a resilient health system for any future health security threats in Cambodia.13 As a lead contributor to the UN’s COVAX Facility, the EU member states delivered over 1.1 million doses of vaccines to Cambodia as of June 2021.14

In 2022, the EU, in collaboration with UNICEF, ILO, and Oxfam, committed €7.4 million ($8.4 million)15 to support Cambodia in strengthening its social protection system. The EU Support to Social Protection Reforms program serves as a response to the pandemic and the implementation of the National Social Protection Policy Framework through two projects including the Fostering an Inclusive and Shock Responsive Social Protection System in Cambodia project (FIRST), led by Oxfam, and the Advancing Social Protection in Cambodia project, steered by the National Social Protection Council of Cambodia and implemented by ILO and UNICEF.16

Related to European Union aid

References

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