Give people the means to sell their products and they will pull themselves out of poverty.
Simple? Maybe. But this marks a major shift in terms of development, said Sok Siphana, secretary of state for the Ministry of Commerce. And accomplishing it “is not as easy as it sounds,” he said.
For many years, aid to developing nations has focused on countrywide, long-term goals such as education, health or rural development, he said. “Trade was a distant cousin” and private business was hardly involved, Sok Siphana said.
Now Cambodia is serving as a pilot country in a new approach to poverty reduction and development. The first step has been an analysis looking at ways to help Cambodia develop its economic sectors and highlight the technical assistance it would need to accelerate the process.
Findings of the Integration and Competitiveness Study will be discussed today and Tuesday during a workshop organized by the Ministry of Commerce.
The study is part of an effort by six international agencies to help the 49 least developed countries benefit from global trade.
The six agencies—the World Trade Organization, the International Monetary Fund, the International Trade Center, the UN Development Program, the UN Conference for Trade and Development, and the World Bank—call their effort the Integrated Framework Program. Cambodia, Madagascar and Mauritius were asked to serve as pilot countries.
Cambodia accepted readily. Although the country has made progress toward economic stability, it needs technical assistance to move forward, Commerce Minister Cham Prasidh said. In some sectors, the government would like to conduct studies to see how Cambodia could compete in international markets, he said.
Research shows the least developed countries have not fully benefited from global trade because, in many cases, they lack market access and the means to meet international requirements, said Ataman Aksoy, economic adviser for the World Bank who is in charge of country studies for the new program. Technical assistance is key to this approach to fighting poverty.
In March 2001, the Integrated Framework Program sent a team of specialists to assist an inter-ministerial committee chaired by the Ministry of Commerce.
The study identified who and where poor people are in Cambodia—usually large families in rural areas, supported by a farmer with little or no education.
With this in mind, the committee analyzed some sectors in which poor people might be able to earn a living beyond the survival level. If the goal is to reduce poverty, Aksoy said, “you should make it easy for people to produce and make it profitable for them.”
The committee studied rice and agriculture, fisheries, garment industry, handicrafts, tourism, marketing and production, and labor services.
The study looked at problems, remedies and suggested agencies that may provide these remedies. For example, talking about unofficial customs-clearance charges that makes it prohibitive for small business people to trade, the report suggests simplifying and standardizing tariffs, thus limiting arbitrary decisions and fees, with the International Monetary Fund providing technical assistance.
The committee in charge of the study looked at what it would take to support trade, from roads to marketing agencies, with the goal of creating a program with concrete steps, said Sandy Cuthbertson, team leader for the study.
Today and Tuesday, the Ministry of Commerce will present the study to organizations involved in Cambodia’s economic development—ministries, international agencies, donor countries, the private business sector and NGOs—to get their input.
“We hope to raise enthusiasm and cooperation” and to have donors consider this approach when planning their aid programs, Aksoy said.
The project may make developed countries more aware of the effects of trade on poverty in developing nations, said Maika Oshikawa, economic affairs officer with the World Trade Organization.
Since a new round of negotiations has started to set world trading rules, “this may help raise consciousness so that least-developed countries will fully take part,” Oshikawa said.