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Supporting inclusive growth in Cambodia

Victoria Kwakwa's picture
A Cambodian farmer. photo by the World Bank
A Cambodian farmer. Photo: The World Bank

Today, Cambodia is among the world’s fastest growing economies. Its gross national income per capita increased by more than threefold in two decades, from $300 in 1994 to $1,070 in 2015.

Strong economic growth has helped lift millions of people out of poverty.

The Cambodian people have benefited as the economy diversified from subsistence farming into manufacturing, tourism and agricultural exports. Poverty fell to 10% in 2013, from 50% in 2004. Cambodians enjoy better school enrollment, literacy, life expectancy, immunization and access to water and sanitation.

Still, many Cambodians could be pushed back into poverty by new global, regional or domestic economic shocks. A recent World Bank study found that a small shock of 30 cents a day would double the nation’s poverty rate.

Cambodia has the opportunity to maintain robust growth and continue lifting people out of poverty and bringing prosperity to all its people. How can Cambodia achieve this goal?  

The key is to continue promoting inclusive growth through sound policies and critical programs and investments, in both the public and private sectors.

The World Bank Group is supporting such programs and investments in a strategy of full engagement with Cambodia set out in our new Country Engagement Note.

Cambodians helped us develop the strategy during countrywide consultations in mid-2015. They included officials from national and local governments, Parliament, civil society, the private sector, development partners and UN agencies.

Their diverse voices form the bedrock of our engagement and strategy.

Recently, Cambodia and the World Bank signed agreements for four projects to improve roads, manage fisheries, improve livelihoods from agriculture in rural communities and increase access to health care.

The projects are supported with $130 million from the International Development Association (IDA), the World Bank’s fund for the poorest. In addition, the International Finance Corporation (IFC), the Bank Group’s private sector development institution, is expanding its engagement in the finance, infrastructure and trade and competitiveness sectors, with the aim of fostering new employment opportunities.

How will the new programs benefit the people of Cambodia?  

For example, the Health Equity Funds supported by a new $30 million IDA-funded health project and $50 million trust fund from partners such as Australia, Germany and South Korea will help cover the costs of health services for three million poor people, reducing their out-of-pocket costs and providing reliable financing for health facilities.

Moreover, service delivery grants will improve the quality and coverage of health services.

A $15 million project aims to improve the management of fisheries and water resources and help reduce rural poverty in the Mekong River Basin in northeast Cambodia.

And a $60 million project seeks to improve 218 kilometers of roads to make them resilient to seasonal flooding, shortening travel times and provide better connectivity along national road corridors in Kampot, Preah Sihanouk, Tbong Khmom and Kratie provinces.

In designing the WBG program to support Cambodia, we listened to the ideas we heard from a range of stakeholder groups.

They told us having better roads, supporting poor villagers who depend on agricultural livelihoods and fishing and access to better health care are high priorities.

Through our full engagement, jointly with all development partners, we strive to contribute to improving the lives of all Cambodians, particularly the poor.  

A version of this article appeared in the Khmer Times.

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