Poverty in Cambodia
Life after the Khmer Rouge

Published in Apr 2012

Defining the way forward for Cambodia

Recovering from the bad years

Poverty in Cambodia hasn’t always been that bad. In fact, in the 1950s the country was one of the most advanced economies in Southeast Asia. But today, the country counts among the poorest in the world by many economic and social indicators.

It’s a baffling thing for those who visit Cambodia to see a country blessed with such natural riches that could definitely provide for everyone, all while witnessing a dire misery. What happened to Cambodia? Thirty years of extreme violence and political instability due to the Khmer Rouge – the communist movement that took over the country in the 1970s.

The Khmer Rouge had this great idea, quite common among communists at the time: “let’s kill all the educated people”. This obviously resulted in a massive economic slump and… well, a massacre. The idea was to build a rural Cambodia free of poverty and central power. What they ended up with is the record of the biggest amount of landmines in the world.

Looking forward

Cambodia has been slowly recovering from all the slaughtering and instability. The 2000s were relatively peaceful when compared with the two previous decades. The country is in a long process of re-developing everything, from health care to education systems and infrastructure.

Overview of poverty in Cambodia

The need to modernize the country

The country has the advantage of a small population (14m) which should mean more resources for everyone, especially when compared to Thailand or Vietnam which have around 90m inhabitants. But basic hygiene conditions are not up to the lowest standards yet, with over 10% of kids who die before reaching the age of 5 and a life expectancy around 50 years old. Despite great efforts lately, poverty in Cambodia remains widespread and part of the daily life of millions of Cambodians.

The state of poverty in Cambodia

In fact, poverty has been slashed from nearly 50% to 35% between the mid-1990s to the mid-2000s. However the story remains the same worldwide: GDP growth and economic liberalization has often benefitted the urban population while the rural one hasn’t seen much improvement. And in a country like Cambodia, it’s quite a problem considering that the majority of the population lives in rural areas.

Still, many regions have managed to develop reasonably well, while others have direly lagged behind and lacked government help - which despite recent improvements, remains quite corrupt and inefficient.

About the economy

An unexpected effect of poverty in Cambodia is the impact on the environment. The illegal and/or destructive exploitation of natural resources poses a huge threat to the future of Cambodia. The country is steadily losing its forests and their resources.

If this goes on, it makes no doubt that “mother nature” won’t be able to sustain this sort of development. The core of the challenge is however that these destructions happen because of poverty. So, just cracking down on illegal farming in Cambodia won’t change the fact that starving people will do anything they can to survive. After all, when you consider everything Cambodia has been through (French colonization, civil war, US bombardment) and 2-3 million deaths during the Khmer Rouge between famine and executions, its slow-ish recovery isn’t all that bad.

Today, extreme poverty in Cambodia caused by diseases and under-developed health care is the biggest challenge the nation has to face. At the end of the Khmer Rouge regime, there were roughly 50 doctors left in the country. For 14 million people.

Health – the key to ending poverty?

Healthcare and child poverty in Cambodia

The healthcare challenge

In the 1990s, even after democracy was “brought” to the country in 1993-94, healthcare was still the most problematic aspect of poverty in Cambodia. Almost half of the Cambodians who lost their land in the 90s actually sold it in order to pay for health bills. Would you have enough money, it’d still be a better idea to go to Thailand for treatment since both private and public hospitals are just as bad.

The problem is therefore that any money that people spend on health care is somewhat wasted because of bad diagnosis and healthcare providers delivering the wrong treatment. Most villages have their own “pharmacies” which are more like local stores selling unregulated medications. Another issue is that health workers are clearly underpaid by the government. A full time salary puts most health workers straight below the poverty line. This in turn leads to more corruption, extortion of fees and bribery. In most cases then, Cambodians end up paying for free services or paying much more than they should.

Aid for healthcare: the solution to poverty in Cambodia?

With 1 in 2 consultation resulting in a potentially unsafe treatment, there is definitely room to improve in the Cambodian healthcare system. That’s why, one solution was to rely on importing foreign medicines to make sure that the drugs were properly dosed. But more problems arise during consultation: from “doctors” affirming that the contraceptive pill causes cancer to the prescription of completely random courses of antibiotics and other serious mistakes that often aggravate the condition of patients.

The most surprising thing is that the wreckage of health care is in fact very recent. It happened with the Khmer Rouge taking over the country and chasing all pharmacists away (because they didn’t believe in medicine…?). When the regulation of drugs was re-introduced in 1994 it was already too late and unregulated drugs were just everywhere, in every corner.

Job market and entrepreneurs in Cambodia

Rural poverty & food shortages

Other barriers to alleviating poverty

The other challenge with poverty in Cambodia is achieving long-term development. Not only are its natural resources being depleted, the population also suffers a dire lack of education and too many new workers added to the job market every year. With over 50% of the population aged 20 or younger, it also means that there is a vital lack of talent and experimented workers to further boost the development of the country.

Worse, when a country ends up with a massively unemployed youth, this tends to turn into large-scale unrest and protests that destabilize the country even more – as the poor claim their right for a job (e.g. Arab Spring). If the government doesn’t take care of unemployment and the labor market, it may suffer yet again a new period of instability – which is really the last thing Cambodia needs.

Investing in education

Given that the majority of Cambodians don’t have the opportunity to attend high school and higher education; skilled workers are rare and all the more precious to the economy. Lack of investment in education now will be one of the greatest threat to the development of the country and ultimately alleviating poverty in Cambodia.

It’s a shame considering that many Cambodians are well-aware of the benefits of learning new skills and hardly need to be convinced about the use of further education.

Government and entrepreneurs

A branch of the World Bank recently declared:

“As in so many countries, emerging local entrepreneurs hold the key to job creation and rising incomes in Cambodia but they are blocked from building the successful companies to their economy needs by weak financial market and support institutions, dilapidated infrastructure, ineffective legal system, and corruption."

It makes no doubt that the government plays a major role in either stifling or boosting the sector of small and medium enterprises (SME) that is so crucial to create new jobs and tackle poverty in Cambodia.

If laws are unable to protect local entrepreneurs from corruption or abuse from bigger businesses, then there’s no incentive for the population to start any venture. Likewise, if nothing works in the country in terms of infrastructure, it can be quite disheartening to the most motivated entrepreneur. Needless to say, many of these new businesses will also need skilled labor – one more reason to invest in education pronto.

How the Cambodian government can help

There’s a whole range of possibilities when it comes to helping SMEs grow more and grow better. Tax breaks, specific subsidies, favorable legal frameworks and easy procedures - e.g. avoiding 3 tons of paperwork helps cut the black market (unregistered businesses) and thus corruption – are among the most common and effective ones.

Food, basic goods and poverty in Cambodia

Cambodian farmers

Food price crisis

Avoiding food shortages and keep on fighting poverty has proved very tricky in the past 5 years because of the constant increase in price of foods and energy (oil production is closely linked to food production). The country still lags behind when it comes to dealing with macro-economic shocks such as a crisis in food prices. Rural, landless inhabitants were by far the most affected and the whole crisis put a temporary halt at the government’s efforts to reduce poverty in Cambodia.

For many the food crisis meant cutting down on food intake, and thus a poor performance at work, the risk to lose one’s job and children who may not be able to attend school normally (e.g. child labor to make up for the lack of money). Even while many rural wages have been increased two- to threefold in the last 10 years, the surge in food prices was still higher than many rurals’ income.

An opportunity for the few (and unethical)

Those who did make a good living during the world crisis were usually well-off farmers with lots of land, but also traders and lenders of goods and money who took advantage of the problem to extract more money from the poor. As a consequence, even more children quit school to help their parents in the fields in order to allow everyone at home to eat (almost) normally. The same goes about their retired grand-parents who often had to join in in the fields.

Overall the hike in prices has unfortunately made the poor become poorer and often more indebted. It’s also jeopardized the prospect to improve their lives as their kids stopped going to school for many years. Besides, adults have often lost the means to pay for health care and thus simply live with their disease and see their health gradually get worse and worse.

Working With the Poor…

The rise of urban poverty in Cambodia

Economic shocks and poverty in Cambodia

In the light of the recent economic slump, it’s crucial that the government realizes the importance of putting social safety nets in place in order to help small, landless farmers cope with higher prices. This would keep the children in school and temporary support targeted to the very poor would help them from falling back into poverty. There is an obvious economic gain to this and it goes along with long-term development goals too.

However to be successful, the key is – as always – to work with local authorities who have access to the poor and are better able to know who to target. Including the poor in the crafting of anti-poverty strategies is a relatively new idea and yet sounds very basic when you think of it.

New opportunities, old constraints

As Cambodia has been gradually integrated to the world system, it’s becoming more and more interconnected and interdependent with other countries. Among other things it means that the country is more vulnerable to global economic crises. But the country hasn’t realized yet, that it also means it has more opportunities for business. In particular regions that border Thailand have access to a huge market and better infrastructures too.

Nonetheless, many old issues remain concerning agriculture. There is still a dire lack of expertise and savoir-faire about agricultural techniques, including on the proper use of irrigation. As much as new strategies like micro-finance can help, they can’t make up for the absence of concrete knowledge on how to manage agricultural production & business. Not to mention that many villages simply don’t have easy access to roads and thus going to a nearby city simply to sell your production can turn into a real week-long pilgrimage.

You'll find here a few (raw) statistics on poverty in Cambodia.

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