Sunday,2007-07-08: Economics Big and Small

Posted on 9 July 2007. Filed under: *Editorial*, Week 515 |

The Mirror, Vol. 11, No. 515

The economic picture of the country of Cambodia has been very positive for several years, with growth rates close to or more than 10 percent. When the economic situation of the Cambodian population is considered, however, the picture is quite different. According to the World Bank report “Sharing Growth: Equity and Development in Cambodia,” published in June 2007, the benefits of the overall economic growth have been spread very unevenly:

  • “Rural inequality of consumption rose during the last decade, driving up aggregate inequality in Cambodia, while urban inequality remained unchanged…
  • In contrast to consumption inequality, inequality in non-consumption measures of living standards such as school enrollment… rates have fallen over time.
  • Inequality in rural and urban areas comes from two sources: the gap between the richest 25 percent and the rest, and inequality within the richest quarter of the population. Rising rural inequality was mainly the result of rising inequality among the richest quarter.”

Considering these findings, the report suggests a number of policy priorities for Cambodia’s response to inequality concerns:

  1. “There is a need for continued effort in economic reform and improvement of investment climate…
  2. Priority in land policy should be to accelerate and intensify systemic titling, extending it throughout the country, including to remote, more conflict-prone areas. Land policies within the agricultural strategy should give priority consideration to household farming, including by redistributing idle plantation land to landless poor households.
  3. More needs to be invested in building and then maintaining basic infrastructure to connect up remoter parts of the country to economic opportunities and improved social services… There is also a pressing need for increased investment in improved water supply and sanitation in rural areas: the rural-urban gap in access to these facilities remains extremely wide.”

The World Bank Country Manager for Cambodia, Nisha Agrawal, added to this general analysis some additional points of explanation, saying, “While the standards of living of the poorest 20 percent of Cambodians have risen on average by 8 percent over the last decade, the standard of living of the richest 20 percent have risen almost six times as fast, by 45 percent, according to World Bank.”

The current week brought some special reports related to new economic activities. It is difficult, however, to see how these relate to the important strategies the World Bank suggests – particularly that “agricultural strategy should give priority consideration to household farming,” land titling and the redistribution of idle land to poor landless households, and the extension of basic infrastructure for improved water supply and sanitation in remote areas, offering the people living there improved social services.

Below is a collection of headlines from this week, illustrating a variety of new initiatives and old problems which touch on economic questions. We highlight questions they raise, and we would appreciate comments about how these relate to the social challenges of peaceful and equitable economic development, especially for those people living at the lower end of the ever growing income gap.

  • Big Businesspeople from France Will Come to Invest in Cambodia – how will their goal to achieve profits relate to the focus on poverty reduction?
  • Mukh Kampul: More Than 60 Families from Bak Khaeng Commune Accuse Hero King Company of Mr. Ly Yong Phat of Taking Their Land – which agricultural strategies will prevail?
  • War for Land Recurs in Kien Svay – how will the concern for household farming be upheld?
  • Japanese Economist Affirms that Three Factors Would Make Cambodia Progressive [use of human resources, especially graduates from foreign countries; using opinions from successful friendly countries; and daring to borrow money from big banks in the world] – how will such friendly advice be accommodated when there have been recent declarations to restrict international advice, for example on future oil revenue, and some feeling expressed against official development assistance with conditions on good governance, and instead preference expressed for “no conditions imposed” on loans (except repayment)?
  • Creation of Anti-Corruption Law Is Necessary for Progress of National Economy
  • Siem Reap Court Issues Warrant to Summon Ing Bun Hoaw, President of AZ Company [to explain about land dispute] – how will powerful personal interests in conflict with the public interest be handled?
  • Kranhoung Wood Transported Throughout Krakor District; Relevant Officials Happy with Money Extortion – how long can authorities look away, when illegal activities are publicly identified and described in detail?
  • Cambodia Welcomes Expansion of Financial Sector of South Korea in Cambodia – how to assure that financial sector interests do not override public sector interests?

In the past, specific economic policies have received far less attention than issues of political parties and reports about leaders and personal relationships and loyalties. We hope that, in the future, there will be more discussions about economic models and options in the press, and less discussion about personal, non-programmatic issues in politics.

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