Cambodia

Summary: Where Have All the Poor Gone? – Cambodia Poverty Assessment 2013

photo credit: Stuck in Customs
photo credit: Stuck in Customs

This is a brief summary of ‘Where Have All the Poor Gone? – Cambodia Poverty Assessment 2013’. There are related posts that have been already published on this website. One could also access those articles from the links below.

No Blind Spot? Cambodia Halved Poverty

  • Between 2004 and 2011, Cambodia enjoyed a GDP per capita increase by 54.5 %, which is one of the highest growth rates among the world (15th out of 174 countries). Even though the rest of the world has got greatly damaged by the 2008 economic crisis, the country had a relatively smaller negative impact on the economy.
  • During the same period, there was consistently 37.8% increase in average per capita consumption, from 6,399 riel to 8,815 riel. The report argues that improved access to services and increased ownership of consumer goods have contributed to the dramatic consumption growth.
  • The growth pattern was pro-poor: the percentage increase in the poor was higher than the rich. The consumption increase of the poorest 20% was 56.5%, followed by 51.6%, 45%, 38.4% and 26.8% for the richer groups.
  • Inequality has also shown a considerable improvement from 0.326 to 0.282 in Gini Index. But the actual gap has risen in absolute terms.
  • Thanks to the pro-poor growth, the poverty headcount ratio decreased from 53.2% to 20.5% within 8 years.
  • Yet, the most households who got out of poverty can be identified just above the poverty line. It implies that a small shock of 1,200 riel (US$ 0.3) would potentially cause the poverty ratio to double.

 

What Halved Cambodia’s Poverty?

  • The government policies in basic infrastructure improvement (roads, communication, rural irrigation); rice production (no price controls and no taxes; minimum wage in apparel manufacturing; and overall industrial policy helped the poor gain benefits from favourable economic environment.
  • In their simulation, drivers of poverty reduction were the increase in rice prices (24%), rice production (23%), rural wages (16%), income from non-farm self-employment (19%), and urban salaries (4%). The price increase in rice by 37.1% boosted agrarian’s income and motivated them to increase production.
  • Education (school access, literacy etc.) and health indicators (maternal/child mortality etc.) show a fair improvement. But not enough to catch up the other Southeast Asian countries.

 

Does Cambodia Need a National Nutrition Strategy?

  • Malnutrition is not improved even with high growth, poverty reduction and human development. The share of stunted children 0-60 months old decreased only from 42% to 40%, and under-weight children stalled at 38%, children with wasting increased from 8% to 11%. The report cannot identify the reasons for this adverse trend compared to consumption increase but call for actions on the quality of food intake, sanitation and so on.

 

Challenges in Human Development

  • The poor still tend to access private non-medical providers. They are the major consultation provider of health issues for 55.1% of the poor. It is much higher than the average rate, 17.9%.
  • The main problem in primary education is late entry. 40% of all students entering first grade enter 2 years late with high dropouts and low completion rate. The problem of overage is to miss a crucial time for cognitive development, which makes learning more difficult; and dropout rate significantly increases with age, which depresses secondary enrolment and retention.

 

Does Social Protection Work Well?

  • Social protection coverage (Health Equity Funds (HEF) and ID-poor programme) for the poor remains low. Only 20% of the poor seeking health treatment used free or subsidised treatment. Except for HEF and scholarship programmes, there are no major government-funded social protection schemes. The National Social Protection Strategy (NSPS) has not yet been implemented.

 

Policy Recommendations

  • Continue to invest in rural infrastructure such as rural roads, irrigation facilities, electrification, cleaner water provision and improved sanitation;
  • Improve productivity through rural extension programmes;
  • Avoid commodity price controls and unreasonable taxes to distort prices in the agricultural sector;
  • Continue to invest in human development;
  • Promote HEF coverage and utilisation for the poor and the vulnerable and maintain low user fees for public health care;
  • Control to ensure the quality of health care of private providers;
  • Take a multi-sector approach to reduce maternal and child malnutrition;
  • Enhance social protection system;
  • Increase social protection programmes coverage to the vulnerable as well as the poor; and
  • Apply the single labour standards in the garment factories to other industries and sectors.


Reference

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