Around 4 million people joined the middle class between 1990 and 2008, marking a 24 percent increase of Cambodia’s middle class, according to a report released by The Asian Development Bank yesterday.
The middle class grew 24 percent during this period, a growth rate that is roughly on par with the increase of the middle class in 21 other Asian countries the ADB surveyed. China’s middle class experienced the greatest growth of all with a stunning 61.4 percent increase, the report said.
In these 21 countries the middle class, defined as people earning between $2 and $20 per day, grew from 21 percent of the population to 56 percent and numbers an estimated 1.9 billion people in 2008, according to the ADB’s Key Indicators for Asia and The Pacific 2010 report.
The report did not include an updated figure on the relative share of the Cambodian population now considered middle class, but mentioned that in 2004 33 percent of all Cambodians were earning between $2 and $20 per day in 2004, with the majority of this group making between $2 and $4 per day.
CPP lawmaker Cheam Yeap, who heads the National Assembly’s Committee for Economy, Finance, Auditing, said the ADB’s findings were encouraging, but added he hoped the middle class could continue to expand faster.
“I am optimistic there will be much growth because the government has pushing investors to invest in Cambodia,” he said. “We have a plan to reduce poverty and reduce the inequality between rich and poor.”
According to an advisor to the National Committee for Subnational Democratic Development, the reported growth of the middle class in Cambodia had probably mostly occurred in urban areas, while in rural areas income had grown at “a glacial pace” during this period.
“It’s logical this growth occurred in urban areas where people have access to capital and resources,” he said, “It does not mean [growth] is widespread and affecting the rural poor.”
He also added inequality in terms of consumer spending had actually risen from 2004 to 2007 and only in the last two years income inequality decreased.
In Channy, CEO of Acleda Bank, said developments in finance sector indicated the middle class had continued to expand, as many more people were gaining access to credit.
Citing a recent UN Development Program report, Mr Channy, said since 2005 one million more Cambodians had been able to get financing, marking a 24 percent increase in access to credit for small and medium-sized enterprises.
“When they have access to finance their income can increase… and they can expand their business and this can create more jobs,” he said.