Hun Sen’s Growth Estimate Met With Skepticism

Prime Minister Hun Sen on Monday predicted an 8.3 percent increase in per capita gross domestic product (GDP) this year, a figure that is significantly higher than the estimates of international banks and, experts say, belies the fact that a large portion of the population remains on the verge of poverty.

Speaking from his palatial office building, Mr. Hun Sen said Cambodia is on track to maintain its strong economic growth with citizen’s average annual income rising to $1,130 from $1,043 last year.

“Cambodia’s GDP per capita in 2008 was $760 and since then it has gone up to $1,043 in 2013. By the end of the year it will go up $1,130,” Mr. Hun Sen said.

The International Monetary Fund in April estimated this year’s GDP per capita would be $1,088 while the ADB predicted in April that the economy would grow by 7 percent this year.

Jayant Menon, lead economist at the Asia Development Bank’s regional economic integration office, said Mr. Hun Sen’s prediction was optimistic.

“An 8 percent increase in GDP per capita would imply [total] GDP growth of close to 10 percent, given population growth of about 2 percent. This is possible but unlikely,” he said.

“The key thing to remember [about] any measure of per capita income is that it is basically an average. The greater the level of income inequality, the more meaningless is this average,” Mr. Menon said.

According to a February World Bank report, GDP per capita increased 50.9 percent from 2004 to 2011 while average per capita consumption increased 38 percent. The report says that although the number of people officially lifted out of poverty was quite high, a large segment of the population remained just above the poverty line.

“The striking growth certainly moved people out of poverty—but the large majority it was not large enough. Much of the poor moved just above the poverty line, remaining highly vulnerable to falling back into poverty,” says the report.

The number of poor—those living on $1.15 per day—decreased by 4 million from 2004 to 2011, and the number of near-poor—those living above $1.15 but below $2.30 per day—increased by 3.5 million.

“[T]he impact of losing an income of…about $0.30 would throw an estimated 3 million Cambodians back into poverty,” Ulrich Zachau, World Bank country director for Cambodia and Southeast Asia, said at the launch of the report.

Samath Veasna, vice president of the Administration Council of the Federation of Cambodian Farmer Organizations for Development, said farmers, who account for about 60 percent of the population, have seen a decline in their standard of living despite a steady rise in economic indicators.

“Generally, farmers don’t record their expense and income. So, I don’t have figures,” he said. “However, I can say based on the reality that farmers in my community and location don’t have better standard of living because many family members leave their farmlands.”

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