Cambodia is a rapidly developing country that has seen vast improvements in its economic and social development over the years. While the number of Cambodians living in extreme poverty has dropped from 36.7% in 2014 to 16.6 % in 2022, multidimensional poverty remains at the forefront of life for many, specifically those living in rural areas. Although much of the population of Cambodia is not classified as living in extreme poverty, almost “three-quarters of the population still live on less than $3 a day” and 90% of those hovering just above the poverty line are located in rural areas.

There are many explanations as to why poverty exists in Cambodia, many of which trace back to the country’s troubled history during the Khmer Rouge regime in the ’70s. Pol Pot’s regressive regime exacerbated poverty, condemning developments and modern advancements that would allow individuals to train in skilled, higher-income jobs. Coupled with inadequate funding for education, health and transport and an unfair distribution of wealth, poverty in Cambodia continues to run rife. However, here are some ways governments, foreign aid and nonprofit organizations are working to improve the situation in Cambodia.

National Poverty Reduction Strategy in Cambodia

In 2002, the Cambodian government introduced the National Poverty Reduction Strategy (NPRS), which established a vision with objectives and measures to tackle the issue of extreme poverty. Poverty mapping was the first step in the program, allowing policymakers to identify areas with the highest levels of poverty and coordinate their antipoverty efforts more efficiently. The NPRS also focused on providing social protection and equity to civilians, ensuring equal access to land, basic amenities and economic resources.

Focusing antipoverty efforts on boosting non-farm earnings and developing growing industries like tourism, garment manufacturing and construction has been a critical driver of poverty reduction in Cambodia. Providing workers with training for more skilled, higher-paying jobs has facilitated a shift away from low-wage farming, further promoting trade and investment-led growth in the country. Moreover, by opening its borders to international trade and investment, Cambodia has attracted foreign direct investment (FDI) to support these growing industries and to expand the economy further.

Between 2013 and 2022, “the average annual value of FDI rose to 12.1% of gross domestic domestic (GDP),” with garment and electronics industries dominating the flow of inbound FDI. In 2023 alone, FDI created more than 307,000 jobs through 268 approved investment projects.

Cash Transfers

The COVID-19 pandemic introduced a myriad of problems and setbacks for Cambodia, reversing prior poverty reduction efforts and pushing approximately 460,000 individuals into poverty. The closure of factories and markets led to job losses. Additionally, the shutdown of borders diminished income from tourism and trade. As a result, Cambodia’s GDP contracted by 3.1%. However, its government responded swiftly, introducing cash transfers to deliver emergency aid and support to those most vulnerable.

Building on the success of previous cash transfer programs, these new transfers were influential in the post-pandemic recovery strategy. They helped people experiencing poverty accumulate savings and purchase necessities for their survival. In total, 700,000 impoverished households have gained access to the cash transfer program, benefiting approximately 2.8 million people living in poverty.

Habitat for Humanity

Habitat for Humanity is just one of the nonprofit organizations helping to alleviate poverty in Cambodia, “focused on long-term development, aid and poverty alleviation.” The organization operates in six provinces, where poverty is most abundant, building safe and durable shelters for those living in impoverished and unsanitary conditions. Thus far, it has helped more than 22,000 families to create long-lasting shelters with new standards of hygiene in its water and sanitation interventions.

Habitat for Humanity not only focuses on building housing for low-income families but also provides education and training in financial literacy and livelihoods. The organization collaborates with various partners, including authorities and microfinance institutions worldwide. Through their collective expertise, they offer technical guidance in housing solutions and well and latrine construction. They also provide micro-loans to help communities initiate these projects.

Final Note on Poverty Eradication in Cambodia

While much remains to be done to eradicate extreme poverty in Cambodia permanently, the important steps outlined in government plans and the remarkable efforts of nonprofit organizations, such as Habitat for Humanity, serve as a model for ongoing positive change.

– Sofia Bowes

Sofia is based on the Isle of Skye, UK and focuses on Good News for The Borgen Project.

Photo: Flickr