Cambodia's Relative Peace Brings the Challenges of Growth

Workers scale one of the skyscrapers under construction in Cambodia.

Last Sunday, more than 8 millions Cambodians were called to vote. This is already the fourth general elections since the 1991 Paris Peace Agreement. Many – including me before I moved to our Phnom Penh office last summer – still connect Cambodia first to what we learned in history classes. The splendor of the Angkor civilization and the atrocities of the Khmer Rouge regime probably come on top of the list. And there is some truth to that. Angkor Wat and its neighboring temples remain magnificent. The Khmer Rouge regime has left deep stigma for the people and for the society. The Khmer Rouge tribunal is attracting a lot of international attention as well. Most landmine fields have been cleared, although there remain some in more remote areas.

But, for all this, this connection more and more misses a key fact: over the last couple of years, Cambodia has achieved a relative peace that has enabled dramatic social and economic change.

Consider this. The income per capita was less than $200 after the Paris Agreement (in today’s terms) – it is about to reach $600 this year. Almost 8 out 10 were living out of agriculture – and 2 of those 8 now live out of industries or services.

These changes are for all to see when you visit Phnom Penh: traffic jams have been invented here as well; construction is booming; skyscrapers are said to be coming off the ground… These changes are also visible for the visitors of Angkor Wat, some of whom must already miss the time when Angkor Wat was a “happy few” destination. These changes must also be evident to the foreign investors who have set foot in Cambodia in recent years.

These trends are barely beginning to address the widespread poverty in Cambodia. They also come with their flipsides. They don’t address all the issues faced by Cambodians as land rights remain particularly weak and governance issues deep. But, as the Growth Commission put it, economic growth is a “necessary condition for the achievement of a wide range of objectives that people and societies care about”. And sustaining the rapid growth Cambodia has been enjoying – almost 10 percent per annum for 10 years – will be difficult.

 With my colleagues from the World Bank and other development partners, I am now working with the government on understanding these past sources of growth and outlining how to sustain such rapid growth. I will put some notes about this work on this blog in the next couple of weeks. In the meanwhile let me know your ideas about where Cambodia sources of growth lie.