Cambodia grade 12 Economic development

1. OVERVIEW OF CAMBODIA

  • Population: 15.4 million
  • Agriculture = 90% of GDP and 80% of workforce in 1985
  • Nowadays, more than half of the population is still working in agriculture
  • In the last decade, agriculture grew by 5.3% (one of the highest in the world)
  • Rice is the principle commodity
  • Tourism has been an increasing means of foreign currency

Cambodia follows an open market system, and over the last decade its economy has experienced a lot of economic growth. In 2015, the country had achieved the lower-middle-income status, with GNI per capita reaching US$1,070. Cambodia's GDP is $15.4 billion in 2013 and $4.66 billion in 2003. Even though Cambodia achieved the Millennium Development Goal in 2009 by halving poverty, in 2012, 17.7% of the population still lived in poverty, most of them living in the countryside.

Important areas for development:

  • 32% of children under 5 are stunted
  • 79% do not have access to piped water supply
  • 58% do not have access to improved sanitation
  • Weak public service delivery
  • Inefficient management of land and resources, environmental sustainability, and good governance

Improvements

  • Poverty halved in 2009
  • Maternal mortality rate decreased per 100,000 from 472 in 2005 to 170 in 2014
  • Under five mortality rate decreased from 83 deaths per 1,000 in 2005 to 35 per 1,000 in 2014
  • Net primary school admission increased from 81% in 2001 to 95.3% in 2014
Comparing Levels of Development

2. Comparing Development

Domestic Factors and Economic Development

Education

  • Scholarships for 63,000 poor secondary-school students since 2005.
  • Education for tourism market helped economic growth
  • Literacy rate have improved to about 78 percent among those aged 15 years or older.
  • In 2008, only 5 percent of the population had working knowledge of the English language.

http://asiafoundation.org/2013/04/24/elevating-education-for-cambodias-growth/

Property Rights

  • Cambodia was ranked 121th out of 177 economies for ease of registering property in the 2016 World Bank Doing Business Report.

https://www.export.gov/article?id=Cambodia-protection-of-property-rights

  • Exports from the important garment and footwear industry rose by 9.4% in the first half
  • Tourist arrivals rose by 3.4% in January-July, marking deceleration from growth at 4.9% a year earlier.

https://www.adb.org/countries/cambodia/economy

Women’s empowerment

  • The Cambodian Young Women's Empowerment Network (CYWEN) was formed in 2009 following a JASS movement building training process in Cambodia in order to strengthen young women’s voice and political participation in Cambodia through leadership training and awareness-building activities and action.

http://www.justassociates.org/en/ally/cambodian-young-womens-empowerment-network-cywen

International Trade and Economic Development

Why does trade matter?

  • Helps the country to utilise resources better
  • International trade has a strong positive relationship with investment
  • Positive effects on knowledge and technology transfer
  • Enhances productivity

Cambodia's trade policy transition 2004

  • Trade policy focused on (1) enhancing participation in sub-regional, regional and global economic cooperation; (2) fostering export diversification; and (3) facilitating and encouraging investment for export.
  • Most government reform programmes and development partners’ assistance concentrated on putting in place a transparent and predictable legal framework, and addressing trade facilitation issues and improving the investment climate.

https://www.cdri.org.kh/webdata/download/wp/wp81e.pdf

Favourable Macroeconomic and Financial Environment

  • Banking has grown rapidly, the total number of banks increasing from 19 in 2005 to 30 in 2008.
  • In 2008, total loans grew four times from 200, reaching USD 2,401 million or 34 per cent of GDP; total deposits rose to USD 2534.9 million from USD 958.6 million in 2005
  • Liberalisation affects financial development by: (1) facilitating capital inflows, (2) spurring domestic financial institutions to improve quality, innovation and efficiency, (3) increasing competition, (4) introducing international practices and upgrading standards of accounting and auditing and (5) intensifying pressure on government to improve legal, regulatory and supervisory systems (World Bank 2008; Francois & Schuknecht 1999; Mattoo et al. 2001; Levine 1996; King & Levine 1993).

Improved Business and Investment Climate

  • After negative feedback from investors and private sectors, the government has started to work on improving the investment climate. They have already passed more than half of the 73 laws and regulations of WTO accession.
  • Some of the significant achievements of this reform include: (1) introduction of a single administrative document in 2006; (2) development of a risk management strategy for the clearance of imported and exported goods; (3) passage of the new customs law in 2007; (4) the computerisation of customs clearance through ASYCUDA (Automated System for Customs Data) in 2009 at five border checkpoints and expansion to the remaining 17 international border checkpoints in 2011; (5) the elimination of pre-shipment inspection in 2009; and (6) continued implementation of customs valuation transaction.

https://www.cdri.org.kh/webdata/download/wp/wp81e.pdf

Growth and Development Strategies aimed at Increasing Trade

Liberalisation

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