A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress.
Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10-year period, with almost two million people escaping poverty, according to the World Bank’s Poverty Assessment Report subtitled "Toward a More Inclusive and Resilient Cambodia".
Since 2020, the rate has increased by 2.8 percentage points, indicating that around 460,000 people have fallen below poverty income thresholds once again – erasing some, but by no means all – of the previous decade's progress.
According to the report, between 2009 and 2019, Cambodia experienced a decade of growth and widespread income gains. Rapid economic expansion, combined with structural changes, led to rising wages and higher standards of living.
The report found that rising non-farm earnings, for example in the tourism, textile and construction sectors, contributed the most to poverty alleviation.
Trade and investment-led growth supported structural transformation toward more productive sectors, creating better-paying manufacturing and services jobs. Workers were able to move out of low-paying agriculture work into better-paying sectors of the economy, thereby boosting their earnings.
At the same time, living conditions and access to basic services such as electricity, water supply, sanitation, healthcare and education improved for broad segments of the population. These improvements narrowed the standard-of-living gaps between rural and urban households.
“Efforts to accelerate Cambodia’s structural transformation have helped reduce poverty. However, despite this impressive success, many households remained vulnerable, with few savings or safety nets. This meant Covid-19 dealt a setback for the country’s progress in combating poverty as employment and wages diminished," said World Bank country manager Maryam Salim.
The report suggested that Cambodia could consider a range of public actions to support a more inclusive and resilient recovery from the pandemic and the economic shocks that came with it.
These include targeted cash transfers, steps to strengthening social protections, investments in health and investments in education.
Ky Sereyvath, an economist at the Royal Academy of Cambodia, acknowledged that Cambodia's poverty rate had risen due to the Covid-19 crisis, which caused some people to lose their incomes and jobs despite the government’s efforts to restore the economic system.
He noted that poverty is still occurring now in 2022 due to some of the same factors, but at a decreased rate as compared to the height of the pandemic in 2020 and 2021, and that government programmes to provide cash assistance to poor and vulnerable households had helped considerably.
Sereyvath added that crises such as the Russia-Ukraine conflict have continued to fuel inflation and food insecurity, along with the rising value of the US dollar, which has negatively impacted poor and developing countries in particular.