Poverty in Cambodia is one of the highest in Asia. Despite
\nthe country\u2019s very impressive GDP growth in the last decade or so, poverty
\nremains pervasive specifically in the rural areas. The food and economic crises
\nalong with the idiosyncratic shocks of the recent years put the plight of the
\npoor and near-poor at even greater risk. The Poverty Dynamics Study (PDS), as a
\nlongitudinal monitoring exercise, helps shed light on the extent, determinants,
\nand nuances of the face of Cambodian poverty against the impacts of major macro
\nand micro developments. Employing a mixed methods approach, the quantitative
\naspect involved statistical analyses of the panel data on 897 households from
\nnine villages representing different geo-climatic regions in the country. This
\ndata was generated from CDRI\u2019s Moving Out of Poverty Study (MOPS) in 2001, the
\nMOPS in 2004\/5 and the PDS survey in 2008, with financial and technical support
\nfrom the World Bank. The qualitative aspect, on the other hand, drew upon
\nanalyses of the results of focus group discussions (FGDs) and semi-structured
\ninterviews (SSIs) with households and individuals from the same nine study
\nvillages. Based on the results of the PDS presented in this report, policy
\nrecommendations have been formulated in the hope of helping tailor the
\ngovernment\u2019s poverty reduction policies and advance their implementation. Addressing
\nPoverty Remain the Top Priority of Development Policies Poverty is a multidimensional phenomenon. It is an outcome
\nof interlocking problems that operate at different levels and contexts. In
\nCambodia, the incidence of poverty has been consistently high albeit this has
\nbeen decreasing in recent years and can be explained by countrylevel, sectoral
\nand micro-level factors. At the national level, Cambodia\u2019s legacy of conflict, repression
\nand isolation stands as a central explanation to why the country has become one
\nof the world\u2019s poorest. This legacy lingers in key broad determinants of
\npoverty, particularly the low levels of physical and human capital and poor
\ngovernance. The impressive growth period between 1998 and 2008 also witnessed
\nthe impact on poverty of economic and non-economic shocks. At the sectoral
\nlevel, the narrow economic base of growth and the under performance of the
\nagricultural sector highlight poverty in Cambodia as a mainly rural phenomenon.
\nAt the micro-level, poor asset ownership, limited access to public goods and
\nfinance, low levels of education and nutrition, and idiosyncratic shocks
\njointly resulted in communal, household and individual poverty. Cambodia achieved a
\nsuccessful economic and social restructuring between 1998 and 2008 that spurred
\neconomic growth and poverty reduction. In time, the Royal Government of
\nCambodia (RGC) declared poverty alleviation as its single most important long
\nterm goal, recognising that poverty reduction is integral to social
\nreconciliation and key to maintaining political stability. The fulfilment of
\nthis mission rests on what has been formally called the Rectangular Strategy.
\nThis strategy\u2019s core component is improvement in governance and its four
\npillars are as follows: enhancement of agriculture; private sector development
\nand employment generation; human resource development; and infrastructure
\nbuilding. This strategy has borne fruit, sustaining the progress in expanding
\nthe economy and diminishing poverty. However, poverty reduction has not matched
\nthe pace of economic growth, suggesting gaps in the translation of policy into
\naction. Poverty
\nDynamics and Socio-economic Trends: Community Perspectives The rural study villages have different experiences in
\nchanging poverty headcount and income. This demonstrates that income growth may
\nhave been a necessary but certainly not a sufficient condition for poverty
\nreduction. The PDS suggests that poverty headcount declined in many rural
\nvillages between 2004\/5 and 2008, a period that had substantial increases in
\naverage real per capita income and consumption. Average real per capita income
\nrose significantly for almost all the study villages but this did not hold for
\nconsumption. Ultimately, using the consumption approach, some villages
\nexperienced a decline in poverty, but its incidence in some villages increased.
\nIncome growth appeared to be strongly, positively related with asset ownership
\nand other welfare improvement. However, the experience of the nine study
\nvillages varied greatly in terms of sustainable food and non-food consumption
\nand depended on their starting base in 2001. It is important to note that most
\nstudy villages experienced consumption deficits in relation to the 2008 village
\npoverty line. Successful agricultural villages have experienced significant
\nreduction in poverty headcount or low poverty incidence. Land sales and
\ntransaction was viewed as a key factor in improvements in well-being and poverty
\nreduction in some village. The study villages were grouped into six strongly and three
\npoorly performing villages based on the ability and capacity of each to exploit
\nsocial, economic and political developments for the purpose of augmenting
\nincome and consumption, especially between 2005 and 2008. Chief of these
\ndevelopments included (1) agricultural growth; (2) enhanced access to common property
\nresources (CPR) for subsistence and commercial purposes; (3) food price
\nescalation in 2007 and then deflation by the middle of 2008; and the (4) real
\nestate boom between 2005 and July 2008. These developments had direct and
\nindirect positive impact on household welfare in the study villages. However,
\nsome gains tended to be unsustainable for such reasons as the illegal nature of
\nthe CPR access and the landlessness caused by real estate transactions. For example,
\nincreased CPR access as a result of the fisheries and forestry reform and its
\npolitical implications before the national election in July 2008 contributed
\ngreatly to the remarkable rise of total average per capita income and helped
\nboost agricultural growth in the CPR villages. These villages however
\nexperienced uneven change in poverty headcount. That is because increased
\nincome in the natural resource development villages stemmed mostly from the
\nillegal conversion of forest and flooded forest for cultivation between 2004\/5
\nand 2008, but such an increase cannot be sustainable. Wage labour became an
\nimportant source of income for landless households and some villages, but this
\nincome tended to sustain improvements in livelihoods and the mitigation of
\npoverty. The sample rural households seem to have benefited from
\ninfrastructure development and increased availability of microcredit services.
\nHowever, this improvement was not enough to raise the capacity of rural
\nhouseholds to cope with social and economic shocks or to sustain their
\nconsumption above the village poverty line to avoid sliding into poverty.
\nConsumption and poverty reduction also proved unstable in those villages where
\nmost households depended heavily on the cultivation of wet season rice, wage
\nlabour and access to CPR. There were increased efforts to grow more cash crops
\nand raise livestock in addition to rice production but the lack of know-how and
\ninadequate extension services undermined progress. These findings highlight the
\nneed to speed up infrastructure development, provision of adequate effective extension
\nservices, and agricultural diversification.Empirical
\nAnalysis: Chronic and Transient Poverty in Nine Villages The empirical analysis uses three separate years of unique
\npanel data on 827 households to measure transient and chronic poverty based on
\nreal total expenditure per capita as a welfare indicator. The results show that
\n44 percent of the sample households experienced transient poverty while chronic
\npoverty affected 15 percent. There are high levels of chronic and transient
\npoverty in the Tonle Sap and Plateau regions. Using multinomial logit regression
\nto identify the causes of transient and chronic poverty, the econometric
\nevidence shows that transient poverty is associated with household composition,
\nthe gender of the household head and marital status. Household composition,
\nnumber of dependent household members, males aged 15\u201364, education of the household head and ownership of
\nnon-land assets are important factors in chronic poverty but are not
\nsignificant in transient poverty. The number of females aged 15\u201364 increases both chronic and transient poverty. The asset approach to measuring chronic and transient
\npoverty found that the largest numbers of households were transient poor,
\nconsistently with the findings of the consumption approach; however, the asset
\nmeasure offers new important and more telling insights into the key
\ndeterminants of chronic and transient poverty. Households experiencing
\ntransient poverty account for 40 percent of the sample and chronic poverty for
\n30 percent. The Tonle Sap and plateau regions have lower chronic poverty and
\nhigher transient poverty than the coastal region. Male adults aged 15\u201364 years, household head characteristics such as educational
\nlevel and occupation, agricultural land, non-land assets and livestock are
\nimportant factors for chronic poverty but are not significant determinants of
\ntransient poverty. Transient poverty is negatively associated with non-land
\nassets. Using either of the consumption or asset approach, the empirical
\nresults suggest that different policies will be needed to address chronic and transient
\npoverty and for each agro-climatic region. Policy
\nimplications A number of pro poor policy directions can be drawn from the
\nkey findings of this micro study. These policies are advanced to support both
\ncommunity growth and poverty reduction and respond to transient and chronic
\npoverty through support for both farm and non-farm employment for poverty
\nreduction. These policies need to be integrated into an agricultural and rural
\ndevelopment policy framework and upcoming development interventions. Such
\npolicies and interventions can be effective if they harness existing synergy of
\ncommunity growth and economic opportunities generated along with structural
\nchange in order to build the capacities of the poor. This will not only
\nincrease productivity but also pave for stronger capacity to cope with socio
\nand economic shocks\/crises. Coordination of pro-poor policies and interventions
\nhas to be done through strategic sectoral planning and define the roles of
\nnational and sub-national bodies within the D&D reform structure. The
\nprivate sector and civil society have important parts to play in highlighting
\nmajor technical, administrative and political challenges to policy design and
\nimplementation. However, promoting structural change from an agricultural to a non-agricultural-based
\ngrowth requires large-scale and long-term investments. Supporting
\nCommunity Growth for Poverty Reduction 1.
\nPro-poor strategic development framework should be integrated and coordinated
\nin development interventions in order to build the capacities of the poor. These
\nshould focus on rural infrastructure; generating labour demand; technical
\nchanges for productivity gains; and, access to stable input, output and
\nfinancial markets to support such technologies. These factors should enable the
\npoor to benefit from widespread technology adoption in response to labour
\nmarkets and the need to diversify in the face of risks of falling grain prices.
\nThe process encompasses structural change that requires careful targeting of
\npolicies, strategic planning and coordination mechanisms to address the
\ndifferent endowments and needs of the poor in rural areas and the differences
\nbetween the chronically and transient poor. 2. Pro-poor agricultural
\ndevelopment policy for poverty reduction should enhance the capacity and
\nproductivity for income generation of small landholding farmers. Strategic
\nmechanisms should be in place for the small farmers to address their problems
\nand needs so that they can increase productivity and diversification. Intensifying and diversifying
\nagricultural activities to increase income of small farmers has been supported
\nby recent market developments in both strongly and poorly performing villages. This development, however, has been
\nconstrained by a lack of know-how, ineffective agricultural extension services
\nand inadequate savings and irrigation systems. At the same time, migration has
\nbecome an alternative coping strategy for the growing labour force while the
\nagricultural landless and land concentration has risen. 3. Pro-poor agriculture should
\naddress the needs of poor, rural agricultural households, especially existing
\nconflicts over land and water access for small farmers. Conflicts
\nover CPR access (land and water) for subsistence and commercial agricultural
\nand related activities remain unresolved and have further inhibited
\nagricultural development and employment creation in rural areas. This should be
\naddressed through land distribution and security, agricultural modernisation
\nand diversification and public goods (infrastructure and agricultural extension
\nservices) delivery for small farmers. A key priority should speed up land
\ntitling processes and social land concession to address inequality in land
\nownership and target frontier areas that are prone to land and water conflicts
\nor conflict between subsistence and commercial interests. Agricultural
\nmechanisms, infrastructure, irrigation, reliable agricultural loans and
\nextension services for small farmers must be set in place to improve land
\nproductivity and promote agricultural intensification and diversification to
\ninduce investments in modern equipment and systems. With such policy interventions,
\nsmall farmers gain a better capacity to cope with shocks and exploit
\nopportunities generated by increased market connections. 4. Bolster crisis response that
\nprotection schemes are required for ex-ante and ex-post crisis responses that
\nshould establish and build the community capacity of crisis responses as part
\nof poverty reduction strategies. The government is in the process of
\nestablishing a comprehensive social safety net system. Three aspects of this
\nare particularly important: funding sustainability; programme design (targeting
\nand type of schemes, with public work programmes and cash transfers vital); and
\nunified administration. Ex-ante strategies, which seek to enhance income
\nsustainability, are longer in term that can diversify economic base. 5. Enhance advanced
\ncommunity-based CPR management to secure pro-poor property rights access for
\nfisheries and forestry. Increasing community ownership of the commons not only formally
\nentitles local villagers to the benefits of CPR access but also formally endows
\nthem with the responsibility to ensure resource sustainability. Collective
\naction has been shown to sustain successful CPR management, but is subject to
\nthe satisfaction of several conditions. First, it has to be based on a
\nwell-defined and context-appropriate property rights regime, with the
\nboundaries under management both clearly laid out and also congruent with the ecosystem
\nand local administrative structures. Second, cost-benefit sharing arrangements must
\nbe as equitable as possible, as key factors in the sustainability of
\nparticipatory resource management are the distribution of dividends and
\ndecision-making power. Third, the success of CPR management hinges on the
\nquality of local governance. Reneging on obligations and free-riding and
\ncheating the system can occur, and it is important to devise cost-effective
\nmonitoring, enforcement and sanctioning systems. Fourth, capacity building is a
\nprerequisite for the success of participatory schemes, and technical assistance
\nto enhance the capacities of local communities should be provided. Sustainable
\nnatural resource use requires a blend of modern and indigenous knowledge of
\nconservation and utilisation. This should be supported
\nthrough consultative discussions to avert conflict and through technical assistance
\nto communities. 6.
\nContinue aggressive implementation of educational strategies and effective
\npro-poor scholarship schemes. Human
\ncapital for both transient and chronic poor through higher educational
\nattainment and appropriate life skill levels can be promoted by simultaneously increasing
\neducation budgets (a priority sector) and enhancing the quality of spending. Access
\nto primary education, already widespread, can be further improved through
\ntargeted spending on education quality. Problematic areas also include low
\nteacher competencies and school retention rates. At the secondary and tertiary
\nlevels, low enrolment ratios must be improved, and budgets for secondary
\neducation must be increased to make access more affordable. In terms of
\nworkforce skills, there is a mismatch between present levels of skills and the
\nrequirements of the private sector, which prevents labour movement into more productive
\nsectors. The lack of management skills is an oft-cited reason for the limited number
\nof Cambodians with managerial positions in the garment sector. The private
\nsector has to be encouraged to take up the slack in offering and funding
\nvocational and technical training opportunities. Pro-Poor
\nPolicy Responses to Chronic and Transient Poverty Two different sets of specific policy responses are needed
\nfor the chronic and transient poor, groups which encounter different livelihood
\nproblems. Policies
\nfor the chronically poor: The chronically poor have been inactive participants and
\nbeneficiaries from the recent growth and developments. They lack financial and
\nproductive assets. They have weak human and physical capital, with low
\neducation levels and chronic health problems. Most chronically poor are self-employed
\nor daily wage workers within the village, which are opportunities that are
\nmostly insecure and with lower wages. A number of key strategies should be
\nspecifically created to improve the capacity of the chronically poor to move
\nout of poverty. 7.
\nExpand pro-poor scholarships and free health care services to target the
\nchronically poor. All poor households have benefited from pro-poor health
\nservices in recent years through the ID Poor card from the Ministry of
\nPlanning. However, only some households have benefited from the universal
\neducation policy and the school feeding programme; other households have had to
\nforce their children to withdraw from school at an early age to help in earning
\nincomes or foraging for food. This study supports the expansion of the pro-poor
\nscholarship programme and free health care services along with non-farm income generation
\nprogrammes for parents as paths out of poverty for the chronically poor. 8.
\nCash transfer programmes for small business creation and non-farm activities
\nare an effective tool to help the chronically poor. The
\nstrategic design of these kinds of interventions should be linked to the
\nbroader market demand and appropriate vocational training and understanding of
\nmarket chains in order to maximise profits. Special arrangements for cash transfer
\nprogrammes supported by vocational training and saving schemes or rural credit
\nfor small business creation is the best option for this section of the
\nchronically poor, especially for female-headed households without male labour. 9.
\nEnhance support for development services for both chronically and transient
\npoor. Single female-headed households often consider alternative
\nincome generation activities such as poultry and pig rearing but suffer from
\nlack of knowledge as to how to protect their animals from infectious diseases.
\nThis problem is not specific to the chronically and transient poor but relates
\nto livestock production in both strongly and poorly performing villages. It can
\nbe addressed by increasing and strengthening agricultural extension services
\nfor the poor.Policies
\nfor the transient poor:Transient poor households have a different set of problems compared
\nwith the chronically poor, often relating to their inability to cope with
\nincome shocks. They have assets for sale to cope with shocks, but during the
\nrecent crises the demand for and price of assets fell and, without formal
\ncredit, they became more vulnerable to sliding into poverty. This group of the
\npoor could benefit from formal insurance and social protection schemes. The
\nfollowing strategies are worth considering in helping the transient poor. 10.
\nFormal protection schemes are needed in response to crises, such as food for
\nwork and employment creation programmes to provide work for the unemployed
\nand\/or dismissed workers on labour-intensive government projects.
\n11.
\nBuild community risk reduction mechanisms such as saving groups. Saving
\nschemes and rice banks were made available to the poor by NGO-led development
\ninitiatives to sustain their consumption in times of need, but these community
\nbased efforts have not been strong enough to cope with the magnitude of the
\nimpact of income shocks. The transient poor have often had to rely on
\ntraditional coping strategies such as loans from moneylenders with high
\ninterest rates and sales of farm outputs to merchants\/traders who willing to
\noffer them credit in times of need but for lower than normal farm-gate prices.
\nThis has further eroded their capacity to recover from income shocks. The
\ntraditional buffer of CPR used for coping with food shortages is no longer
\navailable; the only alternative has been migration to secure earnings
\nelsewhere. This is possible with households that have a labour surplus but less
\nso for single female-headed transient poor households, which are left with
\nlimited options. <\/p>\n
12. Promote linkages between social protection and
\npro-poor agricultural development. Agricultural productivity
\ncan be supported by well-designed social protection programmes. Productive
\ncapacities can be enhanced through the expansion of quality public services for
\ntechnical transfers to the poor, and such social protection can enhance
\nresilience in the face of threats, limit disinvestment, reduce risk and promote
\ninvestment by the poor. Crop and livestock insurance schemes through market
\ninterventions by the government are important in times of economic crisis, and
\nagriculture should be subject to more social protection, and protection which
\nis sensitive to impacts on production. The experience of the recent economic
\ncrises shows that allocations of national insurance funds need to be well-planned
\nand implemented. For the purposes of poverty reduction, however, this study suggests
\nsocial protection interventions be given priority in the plateau, Tonle Sap and
\ncoastal regions, where concentrations of transient poor are highest,
\nparticularly since the recent economic crises.<\/p>\n","protected":false},"excerpt":{"rendered":"
Poverty in Cambodia is one of the highest in Asia. Despite the country\u2019s very impressive GDP growth in the last decade or so, poverty remains pervasive specifically in the rural areas. The food and economic crises along with the idiosyncratic shocks of the recent years put the plight of the poor and near-poor at even greater risk. The Poverty Dynamics Study (PDS), as a longitudinal monitoring exercise, helps shed light on the extent, determinants, and nuances of the face of […]<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[5],"tags":[],"class_list":["post-33096","publications","type-publications","status-publish","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n