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Poverty reduction report card 'probably best ever'

Poverty reduction report card 'probably best ever'

The World Bank Poverty Assessment, released on February 8, says Cambodia has made

progress in ameliorating poverty over the last decade and will, if able to overcome

some key obstacles, meet the Millennium Development Goal of halving poverty by 2015.

"No survey anywhere is flawless, but this one is good," said Tim Conway,

World Bank Poverty Specialist. "This is probably the best survey Cambodia has

ever had."

Prime Minister Hun Sen, speaking at the launch of the report, said that since 1994

there has been a decline of at least 1 percent per year in the number of people living

below the poverty line.

"This assessment can help to clarify the misconception by some members of the

international community that Cambodia's rapid growth over the past decade did not

contribute to poverty reduction in the country," he said.

Overall growth rates in Cambodia over the last decade have averaged an impressive

7 percent per annum. To a certain extent, this economic performance is explained

by the emergence of peace and stability:

"If you take the weight off an economy, if a situation of conflict ends, then

you would expect to see growth. But the question is 'What are you going to do for

the next ten years?' What drove growth over the last decade might not be what drives

it over the next," Conway said.

Equipped with the World Bank report, the government will be better able to determine

the future direction of Cambodia's economic development, said Nisha Agrawal, World

Bank Country Manager:

"For too long Cambodia has been trying to formulate poverty reduction policies

and strategies without good data on national trends and patterns in poverty,"

she said.

The World Bank Poverty Assessment draws on a number of sources using both qualitative

and quantative data to gain an understanding of the dynamics of poverty within Cambodian

society.

"This allows one to ask questions such as, Are 'the poor' the same people from

one decade to the next?" Conway said. "This is very important as 'chronic

poor' are very different from 'transitory poor' and will need different policies

to help them."

Agrawal said identifying policies that could help Cambodia's poorest citizens benefit

more from economic growth emerged as a primary concern for both the Cambodian government

and the World Bank.

"The income of the richest group grew by about six times the rate of the poorest,"

she said. "This has led to a very rapid rise in inequality in Cambodia."

"If Cambodia is to meet its goal of halving poverty by 2015, it will need to

ensure that the poor - including the very poor - benefit more from growth in the

coming decade than they did during the last," she said.

Both the government and the World Bank agreed that Cambodia needs to develop strategies

to ensure a more even distribution of wealth. The inequitable distribution of the

fruits of economic growth has led to increasing polarization along urban/rural and

rich/poor fault lines.

"Significant progress in reducing poverty requires a more pro-rural, pro-poor

pattern of growth," Agrawal said.

In his speech Hun Sen said, "We need to widen the reach so that the poor gain

more from each point of GDP growth. Our first priority is to create conditions that

allow agriculture to grow."

But the report highlights some serious obstacles blocking agricultural development.

"Below-potential agricultural and rural growth can be explained primarily in

terms of poorly defined property rights, inadequate and degraded infrastructure for

water control and transport, and a combination of low levels of human capital and

high levels of household-level vulnerability," the report said.

Hun Sen said that to address these issues the government will focus on resolving

land disputes, building rural infrastructure and improving the quality of education

and affordable health care.

Both the government and the World Bank emphasised the need to diversify the economy:

"[Currently] the foundations of the economic growth are very narrow - garment

manufacture, tourism, and construction," Conway said. "Any problems with

one of these key areas could produce a real shock which would be difficult for Cambodia

to deal with."

The importance of agriculture, however, was the central message of the poverty assessment.

"Industry and services do matter, but, at the moment the case must be made overwhelmingly

for agriculture. The vast majority of Cambodia's poor are farmers. Over the next

five years if we are to reach the poor we need to do something about agriculture,"

Conway said.

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