COVID’s Longtail Economic Fallout: Concerns Among Young Urban Professionals in Cambodia
In January and February of 2021, Havuta, in association with partner organisations, conducted a study among young tertiary-educated working-age urban Cambodians from low-income backgrounds about their attitudes towards COVID-19 and the economic impact they experienced due to coronavirus-related lockdown measures and restrictions.
Cambodia, prior to the virus threat that prompted this year’s harsh April lockdown in Phnom Penh, had been relatively spared of significant COVID presence among its population. It was quick to close its borders to ensure there would be minimal coronavirus spread from abroad.
It has long been considered one of a handful of countries to have dealt with the coronavirus pandemic effectively and quickly, acting aggressively to control the import of the virus to protect the public.
However, the Cambodian economy has suffered from a loss of tourism revenue and in the wake of recent lockdowns and the various restrictions the government put in place throughout 2020.
So while direct health impacts have been limited in Cambodia, the economic longtail effects of the pandemic have not spared the southeast Asian nation. To explore the full impact of those effects, Havuta wanted to capture the plight of a critical portion of the Cambodian economy: urban (Phnom Penh-based) working-age youth from low-income backgrounds who have achieved a tertiary education.
As an emerging economy, Cambodia relies on a growing number of urban professionals to help it propel standards of living in the country. As the World Bank reported in 2019:
“Of the 8 million jobs in Cambodia, 37 percent are wage jobs, many of which offer higher earnings and more protections to workers. However, the other 63 percent of jobs remain more traditional. Such jobs on family farms or in household enterprises are weakly integrated in the modern economy and offer workers lower earnings.”
Given the critical role urban professionals play in Cambodia’s economic development, and particularly focused on professionals from lower income background, Havuta wanted to gain insights into how the COVID-19 pandemic has impacted them, especially in light of Cambodia’s relative success in dealing with the associated health implications.
Participants by Sector
90 percent of the participants in the study had graduated from university, with the remainder having completed secondary school and/or studying at university part-time. Almost half of the respondents work in the education sector. Retail represented six percent of the participants, and roughly 30 percent described themselves as “office workers.” Smaller numbers represented other sectors such as healthcare, hospitality, and the NGO or development sector.
All of the respondents were currently working. In 2020, one in five changed jobs. Of those who changed jobs, only three percent attributed the change to coronavirus factors such as the economic slowdown or restrictions. There were no statistically significant differences between men and women.
Those results suggest that among urban working professionals, the job market remains healthy and competitive despite the restrictions brought about by the pandemic.
However, around a quarter of respondents said that their financial situation and/or their life in general was worse than it was in 2019. The reasons given for those deteriorations were entirely related to the coronavirus pandemic. Some respondents cited family members being laid off from work. Others identified lower incomes and benefits due to coronavirus-related slowdowns. Others discussed financial strains and their direct relationship with COVID-19 suppression measures. Others still pointed to broader economic impacts.
The respondents for whom life and finances were worse in 2020 identified that, even though they may not have been directly affected, members of their community were impacted by job losses, by a deterioration in life quality due to lockdowns, and by company closures or slowdowns.
In fact, 70% of respondents said they knew people who had lost their job in 2020, with half of those saying they knew of more than ten people who had suffered job losses.
Of the one-third of the respondents who answered that they were in debt, 50% said they were in more debt in 2020 than in 2019, with 43% saying their debts were at worrying levels.
Despite Cambodia’s relative success with keeping the coronavirus at bay, over 80 percent of respondents said they were worried about the pandemic. 65% of them listed ‘economic reasons’ for their concerns. That contrasts with a quarter who identified the lifestyle deterioration as one of their concerns. 69 percent cited potential health risks as cause for concern.
These findings suggest that irrespective of the amount of virus in a community, the health scare coronavirus presents remains present. There may also be a mental health strain on populations who do not directly experience coronavirus outbreaks. The fear that an outbreak is inevitable or imminent could be impacting community mental health notwithstanding the lack of a known virus presence.
They also speak to the global nature of the pandemic: even where the virus was largely kept at bay, many people remained concerned. It is worth noting that the study participants largely kept their jobs, had high education levels, and were working professionals. One may imagine the impact of coronavirus-related fears — health, economic, or otherwise — would be higher among unemployed or recently unemployed or among those with less marketable skills.
Key Takeaways:
- The job market for education, urban Cambodians remains resilient.
- Despite that resilience, there is downward pressure on wages and benefits.
- The impact of COVID-related restrictions on the economy is broad, with many working subjects seeing family members, friends, and colleagues laid off.
- Debt levels are a concern, and have worsened during the pandemic. While more studies are required, it is possible that more Cambodians are taking on debt to survive the pandemic period, even if they remain in employment.
Concerns — economic, health, and life standard — are high in a country that was largely unaffected by the health impacts of the virus at the time of the study. Coronavirus anxiety may relate to the country’s less developed healthcare system.
The study suggests that insecurity over the future remains a concern even among those less affected than others in a population by either COVID-19 itself or the economic slowdown resulting from public health measures.
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