by
Nisha Agrawal, Country Manager,
The World Bank
Phnom Penh, Cambodia, Feburary 16, 2006 At the Joint Royal Government of Cambodia,
World Bank, ADB, DFID and UN Conference to
Launch the Cambodia Poverty Assessment 2006
Samdech Prime Minster,
Excellencies, Ladies and gentlemen,
Good morning. Today we are most honored to have Samdech Prime Minister Hun Sen here amongst us to deliver a keynote address to this joint conference to launch the Cambodia Poverty Assessment 2006. On behalf of the World Bank, ADB, DFID and the UN, I would like to extend my warm welcome to the Prime Minister, and to all the other distinguished participants, to this launch of the Cambodia Poverty Assessment, which has been organized jointly with the Royal Government of Cambodia. This new Poverty Assessment is a very important report, and I hope that the discussions here today will help promote meaningful and sustained dialogue on poverty issues between the Royal Government, civil society, the private sector and external development partners. For too long, Cambodia has been trying to formulate poverty reduction policies and strategies without good data on national trends and patterns in poverty. With the Cambodia Socio-Economic Survey data that was collected by the National Institute of Statistics in 2004, we finally have a good basis on which to formulate better, more informed policies and programs. The new Poverty Assessment finds that in the past decade, Cambodia has made significant progress in reducing poverty. The proportion of the population living below the national poverty line fell from an estimated 47 percent ten years ago to 35 percent today. Poverty has fallen in the countryside as well as in the towns, though progress has been more rapid in urban areas. This improvement in the lives of poor people is reflected in many other indicators of welfare. For example amongst comparable populations: for the poorest of the poor (that is, for the bottom 20 percent of the population), access to energy from modern sources has increased from 2 to 28 percent; ownership of radio has increased from 24 to 32 percent, and ownership of TV has increased from 3 to a surprisingly high 36 percent. For the same poorest 20 percent of the population, the use of thatched roofing materials has declined from 74 to 29 percent, and instead, the use of iron or aluminium for roofing has increased from 6 percent to 31 percent. There are many other indicators that confirm the story of improved welfare: for example, schooling and health care have also improved significantly. Samdech Prime Minister: In your speech at the annual workshop of the Ministry of Land Management on February 6th, you said that Cambodia was moving from war to peace; from a culture of conflict to a culture of compromise; and from a culture of confrontation to a culture of dialogue and reconciliation. This Poverty Assessment documents the positive impact that the first decade of peace and stability, after many decades of conflict, has had on people’s lives. Participants in research conducted for this Report by CDRI consistently emphasized how the end of armed political conflict has lifted the burden of fear and opened up livelihood opportunities. Today, Cambodians can save money and accumulate assets, invest in improving their homes and businesses, and travel in search of opportunities. At the national level, the move to peace and democracy cleared the way for Cambodia to rejoin the international community, to receive support from its development partners, and to pursue regional and global opportunities for investment and trade by joining ASEAN and the WTO. Today’s conference provides an opportunity not only to look back over the last decade, but also to look forward – first, to the next five years of the National Strategic Development Plan (NSDP), and then to the next decade till 2015, during which Cambodia has committed to meeting its Millennium Development Goals. The 2015 goals will also be the subject of an upcoming international conference in London in March, entitled “Asia 2015” at which leaders from Cambodia and the rest of Asia will discuss and debate what is needed to end poverty in Asia. Today’s conference has been deliberately designed to discuss the same set of issues in Cambodia that will feature in the Asia-wide conference later in March in London. Looking ahead to the next decade, the challenge for Cambodia is not only to sustain the rate of poverty reduction seen over the last decade, but to significantly accelerate it. Instead of lifting roughly one percent of the population out of poverty every year, which is what happened during the last decade, is it possible for Cambodia to lift two or three percent of its population out of poverty every year, like some of its neighbors are doing? For that to be possible, Cambodia will need to tackle head on the challenge of rising inequality. During the last decade, while the per capita consumption of the richest 20 percent of the population grew by 45 percent, the consumption of the poorest 20 percent grew by only 8 percent—in other words, the income of the richest group grew by about six times the rate of the poorest. This has led to a very rapid rise in inequality in Cambodia—both between rural and urban areas but also within rural areas. 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 much more from growth in the coming decade than they did during the last decade. We understand that this is also now the key issue on the minds of senior policymakers in Cambodia. This Report offers some suggestions of what is needed to ensure a better distribution of income and wealth, leading to faster poverty reduction, in Cambodia. Its main message is that since the poor rely mainly on agriculture for their livelihoods, in the coming decade, Cambodia will need to create an additional engine of growth—namely, a more vibrant agricultural sector --instead of relying only on its more traditional engines of growth –the garments and tourism sectors alone. The Report argues that Cambodia has the potential to achieve and surpass its poverty reduction goals, but this will require some significant changes in policies and programs to address some key challenges. Firstly, the Poverty Report presents evidence that secure legal title to land can make a significant difference to agricultural production and incomes. Without a title, farmers hesitate to invest in improving their land, and landowners hesitate to rent out idle land, for fear that the renter might claim ownership. At present, about 20,000 titles are being granted every month. Samdech Prime Minister: At the same speech on February 6th at the Land Meeting, you asked the Ministry of Land officials whether this could not be accelerated and whether 50,000 titles could not be issued every month, instead of 20,000? I would just like to repeat your question at this workshop. Secondly, Samdech Prime Minister, you also raised the very troubling issue of the growing numbers of landless rural families coexisting with large amounts of land that go unfarmed. In accordance with the new sub-decree on Economic Land Concessions, we believe that existing economic concessions need to be thoroughly reviewed, and those which are not functioning could be canceled and redistributed in an orderly manner to poor landless households. We are very pleased to see that the Government’s Social Land Concession program is starting to take shape and we believe that this is a high priority for accelerating rural poverty reduction in Cambodia. Thirdly, the Report presents evidence showing that small farms are clearly more productive than big farms in Cambodia. This isn’t surprising – the same is true in most countries in Asia, where small family farms produce more crops (and employ far more people) than do plantations. We believe that Government policy should prioritize helping smallholders, both on “social” grounds (that is, on grounds of poverty reduction and equity) but also on “economic” grounds of raising total agricultural growth and total yields. Fourthly, the Report highlights some broader issues to do with service delivery and economic management as a whole. Significant progress in reducing poverty requires a more pro-rural, pro-poor pattern of growth, combined with further improvements in health and education. Problems with the business climate and difficulties in focusing public resources on service delivery in turn reflect underlying institutional weaknesses. Ultimately, consolidating and accelerating poverty reduction calls for fundamental reforms of systems for public financial management, private sector regulation, and civil service pay and organization. Significant progress is being made in the Public Financial Management Reform Program; more recently, the trade facilitation reforms are also taking off. If this success could be replicated in the building of strong institutions of governance in other areas, we believe that the results would be striking. Finally, to successfully reach the goal of halving poverty by 2015—the Report argues that stronger partnerships will be needed between all players—between the government and its development partners, with civil society and with the private sector--in order to harness the energies of all players towards a common goal. Without the support of all players who are contributing to the growth and development of Cambodia, these challenging goals will be difficult to reach. In conclusion, I would like to say that we are pleased to launch this report in collaboration with our partners and we would like to thank all those in Government, in particular the SNEC team who gave generously of their time, research institutes, NGOs and other donor agencies who have provided excellent inputs and feedback during the drafting process. Once again, I would like to thank you for your participation in this workshop, and I look forward to a stimulating discussion today.
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