Poverty has fallen, yet many Cambodians are still at risk of slipping back into poverty, new report finds

February 20, 2014

Phnom Penh, February 20, 2014 —  Cambodia has exceeded the Millennium Development Goal poverty target and is one of the best performers in poverty reduction worldwide, according to a new World Bank Poverty Assessment Report. The poverty rate more than halved, from 53% (2004) to 20.5% (2011). Today, approximately two out of 10 Cambodians are poor, compared with five out of 10 in 2004.

According to the report, increased rice prices and increased rice production greatly contributed to poverty reduction, along with greater road access for farmers to markets, better access to market information through mobile phones, improved irrigation, and a liberal undistorted agricultural market.

"This is good news for Cambodia. The pace of poverty reduction surpassed expectations. When a similar poverty assessment was undertaken in 2006, the aspirational goal was for Cambodia to halve poverty by 2015. Cambodia already reached that goal in 2011,” said Alassane Sow, the World Bank’s Country Manager for Cambodia.

Cambodia Headcount Poverty Rate, 2004-2011
Source: "Where Have All the Poor Gone? Cambodia Poverty Assessment 2013," World Bank.

However, the report finds that Cambodia’s “near-poor”, those who live on less than $2.30 per day per person, may have escaped poverty but remain vulnerable to (even the slightest) economic shocks.

“Despite impressive reduction in poverty, these hard won gains are fragile. Many people who have escaped poverty are still at high risk of falling back into poverty,” said Neak Samsen, Poverty Analyst of the World Bank in Cambodia and the co-author of the Poverty Assessment Report. “For example, the loss of just 1,200 riel  (about $0.30) per day in income would throw an estimated three million Cambodians back into poverty, doubling the poverty rate to 40%.”

Poverty and Vulnerability in 2004 and 2011
Image Image
Source: World Bank staff calculations using CSES data.

To further reduce poverty and vulnerability, the report recommends policies and programs that can help the near poor and the poor, the majority of whom live in rural areas:

  • Improve and upgrade the quality of basic rural infrastructure such as roads, irrigation schemes, electricity supplies, and water and sanitation.

  • Support children in rural areas to start school at a younger age and broaden access to education among minority communities are keys to reducing poverty.

  • Expand scholarships, school feeding, targeted cash transfer and similar programs that have been shown to help reduce secondary school drop-out rates.

  • Promote an integrated program to reduce child malnutrition, with systematic monitoring of child growth by health facilities, promoting community-based programs to reduce open defecation, and improving feeding habits.

  • Increase the coverage of the Health Equity Fund – a scheme that provides free access to health care for the poorest – and raise public awareness of the importance of reducing child malnutrition.

  • Impose tighter controls on private providers and suppliers of medicine outside the public health system to combat counterfeit drugs and improve health care safety.

  • Promote programs to enhance the profitability of rice production by providing improved seeds and more effective rural extension services to help farmers shift from subsistence to commercial farming.

“We might come up with different views on some directions of Cambodia’s socio-economic development, but I firmly believe that we all fundamentally agree that the success of Cambodia’s next stage of poverty reduction will be determined by continuing high levels of inclusive growth based on economic diversification and increased productivity,” said Deputy Prime Minister Keat Chhon, chief of Economic and Finance Committee.

"Reducing poverty further and helping families who have just escaped poverty to stay out of poverty is possible," said Ulrich Zachau, World Bank Country Director Manager for Cambodia and Southeast Asia. “The World Bank is a partner with Cambodia in its efforts to reduce poverty and promote equitable growth and development that benefits all Cambodians.”

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