World Bank: Poverty Down, Inequality Up

Government officials and donors will meet today in Phnom Penh to discuss how to end poverty in Cam­bodia.

The foundation for today’s discussion will be a new World Bank pov­er­ty assessment, based on government data, that shows increasing wealth and increasing inequality in a still highly underdeveloped Cambo­dia.

The report shows that between 1993 and 2004, those living below the national poverty line fell from 47 percent to 35 percent of the population.

But growth has been unequal, the World Bank concludes. In the same decade, according to the re­port, Cambodia’s GINI coefficient—an international measure ranging from zero, which represents total equality, to one, or total in­equality—has increased from 0.35 to 0.42.

This makes Cambodia more un­e­qual than its neighbors Vietnam and Laos, which have rankings of 0.35, while Thailand has a ranking of 0.40.

“Most of Cambodia’s high-growth neighbors…saw levels of in­e­quality start to widen only at later sta­g­es of development,” the report states.

“What is notable about Cambodia in other words is the co-existence of significant and growing inequality with a still-high level of absolute de­privation,” the report added.

The report notes that Cambodia has the lowest agricultural production in South and Southeast Asia—less than half of that of Vietnam—and the lowest irrigation rate: 7 percent, compared to 45 percent of fields in Vietnam.

Because 91 percent of Cambo­dians live in the countryside, without significant improvement in agricultural production, Cambodia will not halve poverty by the UN’s 2015 goal, the report warns.

“If industry and services were to grow by 10 percent per annum, while agriculture continued to average only 2.5 percent per an­num …Cambodia would not achieve its 2015 target,” the report states.

The report also cautions that al­though Cambodia’s Gulf of Thai­land oil reserves could soon yield up to $2 billion in annual revenue, this may not result in an improved society.

“International experiences suggests that petrochemical wealth may equally well result in a ‘re­source curse’ that actually retards development and poverty reduction,” it notes.

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