Poverty in Cambodia
In May 2016, the World Bank Board of Executive Directors approved a $130 million grant to help reduce poverty in Cambodia and improve the lives of poor Cambodians.

The Royal Government of Cambodia and the World Bank signed an agreement on June 9, 2016. This agreement details the four major projects funded by the International Development Association (IDA), the World Bank’s lending arm for the world’s poorest developing countries.

There are 3 million Cambodians living in poverty. However, poverty in Cambodia has steadily decreased over the past 8 years. Currently, 17.7 percent of the Cambodian population is living below the poverty line, compared to 34 percent in 2008.

Needless to say there is still work to be done in Cambodia. The World Bank agreement has created projects that target four specific areas of development to help alleviate poverty in Cambodia.

Health Equity and Quality Improvement ($30 million)

Life expectancy in Cambodia is 68.2 years, while the average life expectancy of developing countries in East Asia and the Pacific is 74.

The Health Improvement plan has two primary focus areas for funding Cambodia’s health care system. The Health Equity Fund helps to provide reliable financing for health facilities as well as cover costs for low income families, in order to reduce out-of pocket spending.

The second focus area applies to redesigned Service Delivery Grants working to improve the quality of health services. It places an emphasis on bettering health-facility management and staff in addition to enhancing coverage of health services.

Mekong Integrated Water Resources Management ($15 million)

Some of the most intensive freshwater fisheries are located in Cambodia. Fishermen catch 2.6 million metric tons of fish in the Mekong basin annually. However, Cambodia’s growing population and overfishing are causing the depletion of fish stocks in Cambodian waters.

The Water Management project aims to improve the oversight of fisheries and water resources specific to the Mekong River Basin.

Road Asset Management ($60 million)

Road condition surveys conducted in 2005 indicated that 60 percent of roads in Cambodia are in poor or bad condition.

This infrastructure development project is projected to supplement 218 kilometers (135.459 miles) of roads. They will also install flood resistant measures. The road improvement will allow for faster travel and better connectivity between the Preah Sihanouk, Kampot, Tbong Khmom, and Kratie provinces.

Land Allocation for Social and Economic Development Project ($25 million)

Agriculture has become increasingly vital for the Cambodian economy and fight against poverty.

Over the past decade, positive developments in agriculture have lifted 4 million people out of poverty. However, as farmland diminishes and global food prices decline, Cambodia is in need of new pathways to promote future agricultural growth.

The Land Allocation Project will provide more than 5,000 land-poor or previously landless families across five provinces with agricultural livelihood support. This project will also include the education and implementation of better farming practices.

In a World Bank press release article Ulrich Zachau, the Country Director of the World Bank for Southeast Asia, made a statement on the day of the signing: “The four projects signed today all contribute to improving the lives of poor Cambodians, and we are glad to support them.”

Kristyn Rohrer

Photo: World Bank

Absolute poverty in Cambodia fell from 53 percent to 20.5 percent in seven years, far exceeding the Millennium Development poverty target. The initial development goals aimed to halve poverty in developing countries by 2015. Cambodia surpassed these expectations in 2011.

However, concerns over the sustainability of this economic upturn plague Cambodia and the world of development.

To address these concerns, experts first study the factors driving this rapid growth. In the Phnom Penh Post, Ulrich Zachau highlights the reasons being “increased rice prices and increased rice production.” Coupled together, these shifts in agriculture raised the salaries of farmers and the wages of their workers. In total, the increases in cost and production accounted for nearly half the poverty reduction.

A number of improvements in the environment allowed for this increase in rice production. As technology advances, more farmers communicate and access information on the agriculture market. Improvements in basic infrastructure also helped the market. Moreover, increased access to roads allows farmers to transport products to the market. On the farms, improved irrigation led to greater quality and quantity of rice.

These environmental successes, though minor, allowed farmers respond efficiently to increased prices.

Zachau voices the growing concerns of Cambodians: “While they are benefiting from the country’s rapid economic growth, Cambodians say they are hoping for a more prosperous future which isn’t based on cheap labor.”

In 2004, five out of 10 Cambodians lived in poverty, but by 2011, this number fell to two. When these shifts in agriculture lifted millions from poverty, where did they land?

Not far, the World Bank reports.

In 2011, nearly 8.1 million of those living on the edge of the poverty line were classified as “near-poor.” In contrast, 4.6 million lived on less than $2.30 per day in 2004. Living on the fringes of prosperity, these men and women face the constant threat of poverty.

As a high-risk population, the “near-poor” remain vulnerable to “the slightest income shock.” A loss of 30 cents per day could risk forcing three million Cambodians to return to poverty thereby doubling the current poverty rate.

The World Bank offers the following recommendations to support the “near-poor” and those in poverty:

  • Further innovation in rice farming and improving the quality of seeds. Ideally, these innovations allow rural farmers to progress from subsistence to commercial farming.
  • Funding advancements in electricity and irrigation, which would yield farmer expansion through an upgrade of rural infrastructure.
  • Investing in child health and education to protect human capital. In terms of education, the World Bank plans to support early childhood education and broaden access to marginalized groups.
  • An expansion of the Health Equity Fund to address health disparities. This initiative offers free coverage to those in poverty, as well as education on child malnutrition.

This early success of the Millennium Development target requires Cambodia to combat poverty on two fronts: protecting the “near-poor” from an economic shock and lifting the remaining 20 percent from poverty.

The increase in rice production offered rapid relief. Yet to enact long-lasting change, development must address the underlying social and economic forces shaping the lives of Cambodians.

Ellery Spahr

Sources: World Bank, Rural Poverty Portal
Photo: Boston