Cambodia: Economic Development Assignment

Cambodia: Economic Development Assignment Words: 1062

Ariana Ruela POSC 340 Dr. Adams October 5, 2011 Advancing Poverty Reduction Progress in Cambodia After Vietnamese occupation of Cambodia was brought to an end in September of 1989, the country attempted to rid itself of a corrupt government and of poverty. With the help of the Association of Southeast Asian Nations (ASEAN), Cambodia was able to hold elections and begin a journey of economic development and poverty reduction.

While on the surface the coalition government, a multiparty democracy under a constitutional monarchy, seems to be working well, Cambodia still continues to suffer from many of the same problems as most third world countries do: widespread violence, poverty, poor economic development, drug and sex trafficking, income disparities, and a weak judicial system (Sodhy, 2004, p. 157). The most important of these issues in Cambodia is that of poverty and economic development. Nonetheless, Anders Engvall et al. researchers for the Stockholm School of Economics, state in their article that “newly released poverty estimates for Cambodia show unexpectedly strong progress with a decline in poverty rates from about 47 percent of the population in 1994-1997 to about 35 percent in 2004” (2008, p. 74). Despite this progress made, Cambodia still remains one of the poorest countries in the region of Southeast Asia. What is hindering Cambodia’s advancement in order to shed the “developing country” status?

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Besides being one of the poorest countries in the region, income growth and poverty reduction are unevenly distributed. Moreover, poverty in Cambodia is characterized by low educational attainment, low access to health care services, high population growth, and a decline in the agricultural sector to name a few. While there has been a large increase in the standard of living in urban areas, progress in rural Cambodia has been significantly less. As a result, poverty in Cambodia today seems to be a predominantly rural issue. Engvall et al. lso go on to mention that “about 90 percent of the poor are found in rural areas” (2008, p. 75). Consequently, in order to understand poverty in Cambodia, one needs to understand its rural conditions and how to improve them. Due to the high concentration of the country’s population, labor force, and poverty in rural areas, “the agricultural sector is crucial to its economy and to poverty reduction” (USAID Assessment, 2007, p. 32). In this sector, two things need to be addressed. First, it is necessary that improvement be made to the productivity of the agricultural sector.

Second, it is also important that Cambodia begins to create jobs for the rural population. Already, “agriculture employs three-fifths of the labor force and accounts for one-third of Cambodia’s GDP” (Engvall, 2008, p. 76). Despite this, the rural population does not exactly work in agriculture for a living due to limited land access, insufficient resources such as seeds, fertilizers, and livestock, and lack of irrigation systems. As development continues to lack in the agricultural sector, income inequalities continue to widen.

This not only poses a threat to the “sustainability of Cambodia’s impressive growth, but also points to an immediate need for more pro-poor growth programs” (USAID Assessment, 2007, p. 8). With the issue of the agricultural sector/rural population brought to the forefront, how should Cambodia’s government go about this? Cambodia’s government needs to provide infrastructure improvements to the rural areas. In order to obtain such resources, Cambodia should continue to work with bilateral and multilateral donors such as the World Bank and the IMF(CIA Word Factbook, 2011).

With the aid and expertise given by donors, the government should attempt to invest in developing the agricultural sector and creating more jobs whether that be in agriculture (to make it more efficient as it employs a majority of Cambodia’s population) or in creating industry and service sector jobs outside of its urban areas. While agricultural productivity has increased and accounts for 34. 2 percent of Cambodia’s GDP, industry remains the most efficient sector accounting for 39. percent (CIA World Factbook 2011). Therefore, pursuing this idea of increased productivity in agriculture is worthwhile as it will possibly reduce income disparities, increase food security (as malnutrition occurs in 30 percent of the population), and attempt to lift the rural population/areas out of poverty (USAID Assessment, 2007, p. 9). Many critics of economic development strategies may disagree with the idea of developing the agricultural sector before investing in Cambodia’s human capital through education.

It is fair to say that human capital is a very important part of economic growth and development. By providing a better education system to its population, Cambodia would allow for the acquisition of skills, which in turn provides access to higher income employment opportunities in order to bring some of the rural sector out of poverty. However, just providing more schools does not improve education. The population needs to be interested in it and demanding the need for it. Nonetheless, surprisingly Cambodia’s youth literacy rates are strong accounting for 83. percent of the youth population who can read (USAID Assessment, 2007, p. 29). Therefore, for now Cambodia is taking the necessary steps to improve its education for as much as its population demands. As a result, human capital is being invested in as much as necessary, but it is the agricultural sector and rural populations that need to be advanced in order to reduce poverty. Nonetheless, Cambodia has made substantial progress in its economic development over the past decade while also significantly reducing its poverty rate.

However, while it has succeeded in developing its urban areas which only account for about 10 percent of its population, Cambodia has a vast share of the rest of the population living under poverty. Therefore, it remains a poor country. In the past, the most important change taken on by Cambodia was growth in urban incomes. Today, it is important that Cambodia’s government turn to its rural sector and engage in poverty reduction by stimulating its agricultural sector and rural population with hopes to achieve yet another strong decline in its poverty rate in the coming decade. Bibliography Central Intelligence Agency. 2011. The World Factbook: Cambodia. ” https://www. cia. gov/library/publications/the-world-factbook/geos/cb. html (September 30, 2011). Engvall, A. , Sjoberg, O. , & Sjoholm, F. 2008. “Poverty in Rural Cambodia: The Differentiated Impact of Linkages, Inputs, and Access to Land. ” Asian Economic Papers, 7(2): 74-95. EBSCOhost (September 30, 2011). Sodhy, P. 2004. “Modernization and Cambodia. ” Journal of Third World Studies, 21(1): 153- 174. EBSCOhost (September 30, 2011). United States Agency International Development. 2007. “Cambodia Economic Performance Assessment. ” http://pdf. usaid. gov/pdf_docs/PNADK762. pdf (September 30, 2011).

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