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Economic Development in Cambodia: Toward Pro-Poor?

Economic Development in Cambodia: Toward Pro-Poor?. By Heng Chou Cambodian Rehabilitation and Development Board Council for Development of Cambodia “Dialogue on Emerging Asian Approaches to Development Cooperation” New Delhi, 05-07 March 2012. A brief history of modern Cambodia.

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Economic Development in Cambodia: Toward Pro-Poor?

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  1. Economic Development in Cambodia: Toward Pro-Poor? By Heng Chou Cambodian Rehabilitation and Development Board Council for Development of Cambodia “Dialogue on Emerging Asian Approaches to Development Cooperation” New Delhi, 05-07 March 2012

  2. A brief history of modern Cambodia • 1991 Signing of the Paris Peace Accord • 1993 First UN-supervised elections • 1998 Peace fully achieved and national unity • 2003 Constitutional reforms ensuring political stability Young country, on fragile foundation, yet firmly moving forward

  3. Characteristics of Cambodia’s economic growth

  4. An unusual growth performance

  5. Income doubled during past decade

  6. Yet benefits unevenly distributed… Living standards improved but at different rates

  7. With growth, inequality increases

  8. Inequality driven by rural inequality

  9. This represents a development and legitimacy challenge for a democratic government

  10. Royal Government of Cambodia:Extending growth to the poor and the vulnerable

  11. Rectangular Strategy for Growth, Employment, Efficiency and Equity Phase 2 launched in 2008 • “Although we have managed to reduce poverty rate … through high economic growth and pro-poor policies … the rural poverty rate remains high. Furthermore the gap between the rich and the poor… remains a challenge.” • “RS II is a long term strategy based on the following fundamentals: ….Third—ensuring equitable distribution of opportunities and the fruits of economic growth.”

  12. Public Financial Management Reform Program 2004-2015 • Pre-PFM public finance: allocative deficiency • PFM: improve budget credibility and allocative efficiency

  13. Priority spending • Education • Health • Agriculture • Rural development

  14. Spending for agriculture (% GDP 2007-2009)

  15. Government capital spending (% of government spending 2007-2009)

  16. Social safety net for the poor? • Recognition of the need for a social safety net • Building blocks are still emerging and fragmented • Health equity fund for example; selectively implemented. • ID Poor (identification of the poor) • Limited coverage and finance • 2008 Cambodia Development Cooperation Forum: consensus yet need for more time and work

  17. Development cooperation: a tool for social redistribution? A changing landscape for development cooperation in Cambodia Marginalization of ODA?

  18. Growth and increased spending capacity

  19. Cambodia is an attractive FDI location

  20. Conclusion • Coherent pro-poor growth strategy is still emerging. • The core of pro-poor growth strategy must center around agriculture on which a majority of the population depends their livelihood. • If managed and allocated well, aid can be a useful tool in a pro-poor growth strategy.

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