Causes of Poverty in Cambodia: Maintaining Growth

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PHNOM PENH — Cambodia’s recent development is the result of more than two decades of economic growth and efforts to reduce poverty. For many economists and politicians, Cambodia is a success story as a country that went from a low-income to a lower-middle income status. The official distinction between different statuses is based on Gross National Income (GNI) per capita with low-income being less than $1,025 and lower-middle income being between $1,026-$4,035.

Causes of poverty in Cambodia were largely due to ineffective and oppressive governments, which failed to lift Cambodia out of poverty after the civil war between 1959 and 1975. The country struggled for many years even into the early 2000s with political unrest and turnover. However, with international aid and support as well as the slow integration of governmental elections, Cambodia has seen growth and stabilization of its economy.

Poverty fell from approximately 50 percent to 20 percent between 2007 and 2012, and since then has fallen even more. Cambodia’s significant progress meant that it surpassed the Millenium Development Goals poverty target, becoming a symbol of economic rehabilitation for many Southeast Asian nations.

Now, the economy is dominated by garment-making and labor, but the Cambodian government has made efforts to use tourism as a means of bolstering the economy. It also hopes to develop its technology and attract foreign investors to extract offshore oil and gas resources, but struggles due to territorial disputes with Thailand.

Despite the economic growth Cambodia has enjoyed, its economy is still fragile, and its people are at risk of falling back into poverty, with at least 70 percent of Cambodians living on less than $3 a day. Many of its 14.5 million people live as subsistence farmers in rural areas, a lifestyle which is largely reliant on suitable and reliable weather. Now, causes of poverty in Cambodia predominantly lie upon these farmers being unable to support themselves as the result of poor yield.

With approximately 90 percent of the population living in the rural areas, efforts to address the causes of poverty in Cambodia will be through sustainably urbanizing these areas to provide easy access to necessities, such as clean water and healthcare services. Furthermore, ensuring children remain in education will also be a priority in preventing Cambodia from dipping back into a low-income status country.

In efforts to continue economic growth and ensure stability in Cambodia, the Asian Development Bank (ADB) has partnered with the country in a Country Partnership Strategy, which started in 2014 and is due to end in 2018.

Thus far, Cambodia has made notable strides in eradicating poverty and pulling itself up into a lower-middle income status country. The priority now is to maintain this growth and successfully do this in a sustainable manner, which also respects the human rights of its people.

Sydney Nam
Photo: Flickr

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