Watching the devastation of years of war in Cambodia inspired Chan Sophal to become an economist and poverty specialist, he said. The 35-year-old Phnom Penh native is now a senior research manager for the Cambodia Development Resource Institute, founder of the Cambodian Economic Association and is currently studying regional trade, labor markets, labor migration and poverty reduction.
In his role as president of the CEA, he spoke with The Cambodia Daily’s Tim Sturrock and Kay Kimsong.
Q: What is the future of Cambodia’s economy over the next 10 to 15 years?
A: The economy will keep growing at a high rate over the next five years. However, beyond that very much depends on how the government will deal with the rule of law and making sure that growth—that people will have enough purchasing power to participate in the market and everyone will then have more income and it will be growth for everyone. That will be important to fuel growth further over the next 10 to 15 years.
Q: What specifically does Cambodia need to do to ensure that the economy continues to grow?
A: Growth so far is based a lot on the exploitation of cheap labor, of natural resources and our national treasure Angkor Wat. I can see it’s a stage of resource exploitation which will not be sustainable. To have sustainable growth we need to make sure that the gains from resource exploitation will be transformed into development capital. This means social capital and human resources and infrastructure capital that will increase production and efficiency in the long run.
Q: What infrastructure issues does Cambodia need to deal with and improve.
A: Both institutional and physical infrastructure. Infrastructure has to do with the rule of law, institutions that are respected by all players in the economy. Institutions are very important in making sure there is a level playing field for all economic actors.
Physical infrastructure is fundamental in transportation, in trade and in generating growth in agricultural production-all sorts of production. There’s a need for good infrastructure in terms of roads, bridges, construction, irrigation.
Q: Do you have much faith that the commercial court will make a difference in fairness in courts for business disputes.
A: It will be an important element, but given the overall context, I don’t hope so much that they will deal with everything.
Q: Why not?
A: Again, it’s to do with the power structure in the country. Like the courts today—reform in courts has been among the slowest reforms. Why do we expect that a commercial court will be very different?
Q: How capable is Cambodia of making the necessary changes?
A: I’m optimistic that things will change positively, but I’m not very optimistic about the speed of change. I think it will take time.
Q: What sector of the economy will be the next to expand?
A: Obviously agriculture will expand…. Productivity of rice can still be increased, but I see a lot of new areas that can be used for cash crop production and then that will feed into a growing industry which is extremely limited in the country. So, if the issue of [disputed] land is dealt with effectively you can expect to see higher growth in cash crop production and agro-industry.
Q: Why do some Cambodian farmers migrate to farm in Thailand?
A: I’ve visited the farms in Thailand myself… In Thailand they have [crop] rotation, the crops are grown every month year round. So it gives jobs to people year round. In Cambodia they still follow the tradition to grow the crops in March and harvest in November.
Q: Will this change?
A: It can be like in Thailand. There is no reason why we cannot learn from Thailand and make it better.