The first shift is toward a more sustainable and green economic development model for accelerating inclusive growth, economic diversification, and human development.

The building blocks required to achieve concerted shifts include: (a) continued gains in human development and inclusion to expand opportunities for socio-economic empowerment, particularly for those at risk of being left behind; (b) trade and economic diversification to prepare for LDC graduation and increase economic competitiveness and resilience, and (c) accelerating the changeover from funding to financing in anticipation of decreasing ODA and changes in trade preferences following graduation. This work will be guided by UNDP Signature Solutions on Poverty and Inequality, Energy, and Gender Equality.

UNDP will contribute to removing structural barriers for socio-economic inclusion and empowerment of women and marginalized groups (e.g., youth, people living with disabilities, indigenous and other populations left behind), including supporting a care economy, expanding social protection coverage, strengthening health systems, accelerating mine clearance and releasing land for safe use, and supporting the future of work. Partners include the Cambodian Mine Action and Victims Assistance Authority (CMAA), Ministry of Health (MoH), Ministry of Labour and Vocational Training (MoLVT), Ministry of Planning (MoP), Ministry of Social Affairs, Veterans and Youth Rehabilitation (MoSVY) and the Ministry of Women Affairs (MoWA), alongside the Disability Action Council (DAC), National Social Protection Council (NSPC), ILO, United Nations Population Fund (UNFPA), United Nations Children’s Fund (UNICEF), United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), World Health Organization (WHO), World Food Programme (WFP), World Bank, and other development partners.

Achieving progress on trade and economic diversification will lay the foundation for graduation from the LDC category. UNDP will support trade and economic diversification by expanding value chains and markets, fostering innovation, entrepreneurship, business and human rights standards, and strengthening the business environment and policy framework for green and circular economy, energy transition and digital economy. Efforts will be augmented by supporting private sector development in partnership with the Ministry of Commerce (MoC), Ministry of Industry, Science, Technology and Innovation (MISTI) and Khmer Enterprise, addressing gender norms and unpaid care work issues that are barriers to women’s equal participation. Partners will also create new job opportunities for youth.

To expand financing for development, UNDP and the Ministry of Economy and Finance (MEF), Ministry of Environment (MoE), National Bank of Cambodia (NBC), Asian Development Bank (ADB), European Union, United Nations Capital Development Fund (UNCDF), and World Bank will pursue alignment of public budgeting and expenditure for the SDGs and further diversification of financing and investments. Pursuits include innovative public and private financing, financial inclusion, and risk insurance—and developing a modern revenue system that prioritizes progressive and gender-sensitive taxation to leverage critical investments for human development priorities.

Risks associated with this shift include rising private and household debt, tightening of fiscal space, and economic slowdown due to internal and external factors that put many people at risk of falling into poverty. The UNDP mitigation strategy involves prioritizing social protection support and enhancing economic and environmental resilience.