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Helping to reduce poverty

A woman and her son wash dishes on the side of a dirt road at Srah Chak commune in Phnom Penh’s Daun Penh district
A woman and her son wash dishes on the side of a dirt road at Srah Chak commune in Phnom Penh’s Daun Penh district in June. It is estimated that in 2011, about 20 per cent of Cambodians were living in poverty. Hong Menea

Helping to reduce poverty

Strong economic growth has helped reduce poverty in Cambodia dramatically in recent years, from 53 per cent in 2004 to about 20 per cent in 2011.

Cambodia has exceeded the Millennium Development Goals for poverty reduction, cut poverty by more than half and become one of the best global performers in poverty reduction. With economic growth projected around 7 per cent in 2013, poverty is expected to continue falling. This is good news.

At the same time, almost three million Cambodians were still poor in 2011. Ninety per cent of them live in rural areas. The incomes of many Cambodians who moved to urban areas to find jobs have not matched rising rents and prices.

Nearly 40 per cent of children under the age of five suffer from malnutrition and 28 per cent in the same age group were underweight in 2010. This is Cambodia’s key challenge, and also its key opportunity: to improve the lives of those children and their families and lift them out of poverty.

How can Cambodia reduce poverty further? By investing in its people, its human capital, for improved health, education, skills and jobs and better access to finance along with investments in critical infrastructure – and that’s where Cambodia’s development partners, including the World Bank Group, can help.

Khoun Samon, a patient treated at 16Makara Hospital in Preah Vihear province said: “My family is poor and we wouldn’t have been able to afford it. All expenses for our treatment here are covered.”

Samon is one of 1.17 million poor people who benefited from the Health Equity Fund since 2002.

Cambodia and the World Bank Group have been partners in development since 1970. The World Bank Group has provided analyses, advice and financing to Cambodia – to both the public and the private sector – in areas ranging from education and healthcare to infrastructure, energy policy, clean drinking water and access to finance for rural micro-borrowers and small and medium-sized businesses.

The World Bank Group has now begun working with Cambodia on the next phase of our partnership by preparing a two-year Interim Strategy Note. Our focus will be on addressing the critical needs of the Cambodian people, especially those who have been left behind.

This Interim Strategy is to become the first phase of a new Cambodia-World Bank Group partnership in investing in creating more opportunities for people.

The road forward will build on our record of delivering results. World Bank Group funding and Trust Funds administered on behalf of other development partners have provided advanced health care clinics across Cambodia, especially in remote areas.

In Preah Vihear, for example, a new healthcare facility is providing rural families with better access. World Bank grants and credits over the last couple of years have built critically needed drinking water systems for urban populations including in Phnom Penh and other projects are improving agriculture and providing vital roads, bridges and transportation links.

IFC, the member of The World Bank Group focused on private sector development, has invested in infrastructure and to support the development of Cambodia’s microfinance industry, including establishing Cambodia’s first credit bureau and its first moveable asset collateral registry.

World Bank Group support has also helped create jobs and raise incomes for people by promoting trade opportunities, facilitating businesses’ access to outside markets and helping Cambodia simplify trade regulations, improve licensing and inspections, reduce paperwork for imports and exports and establish a commercial, non-judicial arbitration mechanism for the private sector to resolve disputes.

Private Cambodian agro business firms in the rice sector, for example, have become more competitive with World Bank Group financing and advice.

The World Bank Group will consult with all stakeholders in Cambodia including government, development partners, the private sector and civil society, so we support programs that meet the needs of the people.

The World Bank Group’s global twin targets aim to end extreme poverty by 2030 and build shared prosperity of families, communities and working people in every country.

New initiatives and additional resources will be part of our expanded and increased effort to assist Cambodia in bringing people out of poverty.

We will be Cambodia’s partner in finding a path forward for the Cambodian people – especially those children, families and communities held back by unemployment, low incomes, health concerns and lack of income prospects.

Education, improved health care, better skills and training can improve incomes for families and working people. We are committed to building on our historic partnership with the people of Cambodia to help them build a better future.

Ulrich Zachau is the World Bank Country Director for Southeast Asia (Cambodia, Lao PDR, Myanmar, Malaysia and Thailand) and Sérgio Pimenta is the IFC’s Regional Director for East Asia and the Pacific.

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