Research | Cambodian Rural situation

According to the World Bank database, approximately 80 percent of Cambodia’s population lives in rural areas and 71 percent is primarily dependent on agriculture (largely rice) and livestocks for their livelihoods.

Poverty in Cambodia is overwhelmingly rural, with poverty head-counts ranging from a low of 10-15 percent in Phnom Penh to 40-45 percent in the rural areas, reaching 70-80 percent in some areas around the Tonle Basin. The poorest ones are particularly dependent on access to common property resources – fisheries and forestry – for example, eating and selling fish, eating mushrooms, and selling logs – so called “pickers”.

Agricultural growth had shown steady improvement, averaging 2 percent annually over the decade prior to 2005, when the sector had unusual high growth of 16 percent. However, agricultural production and general rural economic growth remain far below their potential because of low productivity, high vulnerability to weather, constrained access to land, forests, fisheries and markets, and lack of adequate infrastructure such as roads, water supply, electricity and communications networks.

Due to the large rural population and high potential for improvement, the government has highlighted promotion of agricultural development as the primary strategy for achieving higher growth and poverty reduction.

Although there have been impressive achievements, many challenges still remain to be addressed. The world Bank emphasize five key problems:

1. Declining access to land, forests and fisheries due to appropriation by other interests – landlessness is estimated to be 20 percent in rural Cambodia
2. Technology gaps compared to neighboring countries in production, transport, storage, processing and marketing
3. Limited, long-term agribusiness investment due to a weak investment climate. – There are needs for better businesses, taxation, regulations to facilitate trade and improvements in the legal system governing contractual and property rights.
4. Inadequate public services on agriculture – research, extension, market information and phytosanitary services
5. Little development of production and marketing organizations

As a response to some of these challenges, in alignment with the Cambodian government's development plan, and after consultation with other donors to ensure the greatest impact, the World Bank has developed a strategic plan with the following objectives:

• Improving the climate for private sector investment – particularly trade facilitation.
• Strengthening public service delivery – particularly through public financial management and seeking opportunities to support public administration reform.
• Increasing the access of local communities to natural resources and their participation in management – particularly for land and forest resources.
• Supporting greater social accountability – particularly through supporting and strengthening the activities of local government and civil society

The Bank is providing fund for projects that are aligned with these objectives as following: Land Allocation for Social and Economic Development (US$ 13 million), Avian and Human Influenza Control and Preparedness Emergency Project (US$ 11 million), Land Management and Administration Project (US$ 24.3 million), Rural Investment and Local Governance Project (US$ 58.24 million), Biodiversity and Protected Areas Management Project (US$1.91 million IDA; US$ 2.75 million GEF Grant), and Community Forestry Japan Social Development Fund Grant (US$ 1.76 million). In total, more than US$ 100 million.

According to some internal sources, however, more than 2/3 will be lost during the process due to corruption. We ponder the opportunity price of the fund noting that it might only make the gap between the haves and the have-nots greater and greater.
–Reference

World Bank. [http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/CAMBODIAEXTN/0,,menuPK:293861~pagePK:141159~piPK:141110~theSitePK:293856,00.html], retrieved Apr 24, 2010.