Cambodia: from poverty reduction to shared prosperity

Cambodia: from poverty reduction to shared prosperity

Thu, 5 November 2015

Axel van Trotsenburg

PPP

A student is administered a vaccine during class at Chaktomok school in Phnom Penh in 2013. Vireak Mai

Before I set foot in this beautiful country, I was told the story of Siv Mao and her newborn baby.

Last year, Siv Mao, a young woman from a village in northern Cambodia gave birth to a boy after an emergency Caesarean section at a new hospital in her province’s capital.

The boy was named Rith Samnang “Lucky” for a good reason: without the doctors and modern equipment in the new 16 Makara Hospital in Preah Vihear, he wouldn’t have been able to survive.

The traditional midwife had difficulty assisting the birth at her home, and other hospitals were far away.

Baby Lucky is a symbol of Cambodia’s development success in the last decade: the country has gone a long way in improving economic and social conditions for its people, especially the poorest.

The Cambodian economy grew on average 7.8 per cent in 2004-2014, attaining one of the fastest growth rates in the world during this period. Gross domestic product growth was driven by construction and exports, especially textiles, tourism and rice.

Cambodia’s membership in the 10-member Association of Southeast Asian Nations (ASEAN), has created significant opportunities for integrating into regional and global value chains.

The fast pace of economic growth has helped lift 5 million people out of poverty since 2004 and has made Cambodia a leader in poverty reduction, both in East Asia and across the globe.

Today, over 2 million people live below the national poverty line, down from nearly 7 million people. A small but growing number of residents are becoming middle class.

Along with improved per-capita incomes, Cambodians today enjoy longer life expectancy, higher literacy levels and easier access to immunisation, water and sanitation services, electricity and mobile phones.

Child mortality has declined by nearly two-thirds in the past decade, maternal mortality has fallen by half, and primary school enrollment increased significantly.

At the same time, Cambodia continues to face important development challenges. First and foremost, there is the challenge to further reduce poverty.

Continued strong and inclusive growth will be key to achieve this objective. In this context, it will be important to maintain a solid macroeconomic framework complemented by reforms to promote private sector investments and improve public service delivery.

In particular, concerted efforts will be needed to improve nutrition and education outcomes. For example, almost one third of children under five are stunted, more than one-third of second-graders can’t read, and the enrollment rate in upper secondary schools is below 15 per cent.

In addition, there remain challenges in the provision of basic economic infrastructure. More than 12 million people, over 80 per cent of the population, are still waiting to get access to piped water. More access roads are needed so farmers can get goods to markets and children can go to schools.

The World Bank Group is committed to supporting Cambodia in addressing these challenges. Our mission is to end extreme poverty by 2030 and boost prosperity among the poorest 40 per cent in low- and middle-income countries.

With the United Nations adopting the Sustainable Development Goals last month, there is a renewed global commitment to improving social and economic conditions around the world, and the World Bank Group is an integral part of this effort. In this context, we are focused on boosting inclusive economic growth, investing in people, and providing social protection for the poor and vulnerable, including when natural disasters hit.

During a nationwide dialogue we held with Cambodians this summer, we learned firsthand what Cambodians from urban and rural areas feel they need to improve their lives and reduce poverty.

Their expectation is that international institutions like the World Bank can help improve their economic and social prospects especially in areas such as agriculture, health, education and transportation.

Above all, we learned the Cambodian people are remarkably resilient and they have very clear ideas on how to shape their own destiny.

We are committed to accompanying Cambodia on its journey toward shared prosperity.

Axel van Trotsenburg is the regional vice president of the World Bank for East Asia and Pacific.