Cambodia: Rapid Growth with Institutional Constraints (original) (raw)
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Cambodia: Rapid Growth in an Open, Post-conflict Economy
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This Working Paper series provides a vehicle for preliminary circulation of research results in the fields of economic development and international trade. The series is intended to stimulate discussion and critical comment. Staff and visitors in any part of the Australian National University are encouraged to contribute. To facilitate prompt distribution, papers are screened, but not formally refereed.
The political settlement and economic growth in Cambodia
RePEc: Research Papers in Economics, 2014
Since 1960 many countries have experienced growth accelerations, but few have maintained growth. An adequate theory of growth must explain both how some countries kick-start growth, and how some maintain it over decades. For us, the key is to be found in the relationship between what we call the political settlement and the environment for business. Some political settlements create the possibility of a transition from disorder to order in the deals environment, and this creates a potential for accelerated growth. Of these, a smaller subset manages to maintain order while also permitting an increased openness of the deals environment, so that new firms can enter, innovate, compete, and structurally transform the economy.
Matching aspirations : skills for implementing Cambodia's growth strategy
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The Cambodian economy: ready for take-off?
The Pacific Review, 2006
Cambodia is facing the familiar problem of achieving sustained rates of economic growth that could help it alleviate widespread poverty. Against the background of some encouraging developments, and quite a few that are not equally reassuring, we argue that any push for development needs to consider both agriculture and industry. This is so as both labour absorption, primarily in secondary sector activities, and productivity growth in agriculture are necessary to lift large segments of the population out of the poverty associated with subsistence agriculture, landlessness and informal sector activities. Given that the major success story of the past decade, the garments and textile industry, is under threat, we conclude that Cambodia is yet to achieve an economic take off.
The political settlement and economic growth in Cambodia (published Working Paper)
Since 1960 many countries have experienced growth accelerations, but few have maintained growth. An adequate theory of growth must explain both how some countries kick-start growth, and how some maintain it over decades. For us, the key is to be found in the relationship between what we call the political settlement and the environment for business. Some political settlements create the possibility of a transition from disorder to order in the deals environment, and this creates a potential for accelerated growth. Of these, a smaller subset manages to maintain order while also permitting an increased openness of the deals environment, so that new firms can enter, innovate, compete, and structurally transform the economy. Over the past 40 years, Cambodia has had one of the world’s most volatile growth experiences. A prolonged economic collapse between 1970 and 1982 was followed by a gradual but unstable recovery up until 1998, while post-1998 saw another growth acceleration and sustained high growth. While growth collapse can be traced to the failure of Prince Sihanouk’s post-independence political settlement, war and the disastrous Khmer Rouge regime, growth acceleration and maintenance has been based on a political settlement which has created a balance between technocrats and rent-seekers within Hun Sen’s dominant coalition. Technocrats are given just enough latitude to support growth industries, while rent-seekers are given the political backing to generate profits, a proportion of which are funnelled to the masses through ruling party patronage projects. Through interviews conducted in four economic sectors, we show that there has been a positive feedback loop between support for competitive export industries, state capacity, and structural transformation. However, there has also been a negative feedback loop from over-reliance on high-rent industries, to insufficiently inclusive growth and political instability. The political settlement that has underpinned growth and stability for the past 15 years is facing a severe challenge.
2012
Chapter 2: Population and Demographic Structure 2.1. Overview 2.2. Population structure by age and by sex 2.3. Population growth 2.4. Socioeconomic status of the population 2.5. Population policy 2.6. Policy on employment and social welfare 2.7. Ethnic group in Cambodia PART II: MACROECONOMIC FRAMEWORK Chapter 3: Macroeconomic Performance-Historical Trends and Key Features of Structural Adjustment 3.1. Phases of economic growth 3.2. Savings and investment behaviors 3.3. Fiscal sector 3.4. Monetary sector 3.5. External sector 3.6. Macroeconomic developments in 2008 and outlook 3.7. Global financial crisis and its impact on Cambodia 3.8. Conclusion Chapter 4: Banking 4.1. Background 4.2. Restructuring of the banking system 4.3. Current architecture of Cambodia's banking system 4.4. Cambodian banking system-an analysis of strengths and weaknesses 4.5. Micro-finance Chapter 5: Insurance Sector 5.1. Insurance market-an overview 5.2. Reform of insurance sector Chapter 6: Capital Market Development 6.1. Phases for capital market development 6.2. Key issues of capital market development PART III: THE CHALLENGE OF MODERNIZING AGRICULTURE Chapter 7: Agricultural Economy 7.1. Rice production 7.2. Systems of agricultural production 7.3. Forests and forestry policy 7.4. Fisheries 7.5. Animal husbandry Chapter 8: Impediments to Improving the Standard of Living of Farmers 8.1. Landlessness 8.2. Inputs supply 8.3. Physical and social infrastructure 8.4. Review of rural development policies and experiences Chapter 9: Agriculture Modernization Policy 9.1. Choice between family-scale farms and large plantations 9.2. Diversification and modernization of agriculture 9.3. Promoting agro-industry 9.4. Strengthening technical and commercial services 9.5. Land security and land administration reform 9.6. Water resources management reform 9.7. Increase and diversification of rural income 9.8. Reducing the vulnerability of agricultural activities 9.9. Access to markets under trade regionalization 9.10. Forest management reform 9.11. Promotion of rubber 9.12. Revival of fisheries 9.13. Creation of conditions for strong, sustainable growth in the animal husbandry subsector 9.14. Institutional capacity building 9.15. Promotion of integrated rural development and opening up of rural zones 9.16. Development of financing systems in rural communities 9.17. Development of the private sector and non-agricultural rural employment 9.18. Sustainability of donor-funded projects PART IV: THE CHALLENGE OF INDUSTRIALIZATION Chapter 10: Industrial Sector-An Overview 10.1. State-owned enterprises 10.2. Structure of industry 10.3. Garment and textiles 10.4. Construction 10.5. Agro-industry: Food and beverage 10.6. Other industry and industrial diversification Chapter 11: Private Sector Development 11.1. Modern sector 11.2. Informal sector 11.3. Constraints to investment and productivity Chapter 12: Industrial Policies 12.1. Future challenges and opportunities 12.2. Diversification of industrial development 12.3. Industrial corridor development PART V: SERVICES AND INFRASTRUCTURE Chapter 13: Tourism 13.1. Background 13.2. Tourist attraction and activities 13.3. Cultural tourism 13.4. Tourism as the pole of growth 13.5. Tourism policy Chapter 14: Telecommunications 14.1. Laws and institutional regulatory framework 14.2. Key features of market developments 14.3. Technological progress and its impact on electronic communication revenue 14.4. Strategies and policies for telecommunications development
An Economic History of Cambodia in the Twentieth Century
South East Asia Research, 2013
Preface xv duced laws and other offi cial notices, provided information about exchange rates, shipping manifests and international markets, and off ered statistical analyses of the Cambodian economy. Given the prestige of the Chamber of Commerce and its proximity to government, the bulletin's sources were practically guaranteed. In view of these omissions, therefore, Prud'homme's "tool" had limitations. Th e present situation is very diff erent in terms of sources. For an analysis of the Cambodian economy in the year 2005, taken as a convenient cutoff point, there is an abundance of statistics, reports, analyses, prognoses and so on of the Cambodian economy. A reliable general population census was conducted in 1998, and in addition to this essential resource, the National Institute of Statistics conducted regular socioeconomic surveys, produced statistical yearbooks and, in 2003, published the results of a survey of industrial establishments in the country. In addition to these offi cial sources, there are the publications of respected in-country research organisations such as the Cambodia Development Resource Institute and the Economic Institute of Cambodia, as well as reports of international fi nancial institutions (Th e World Bank and Asian Development Bank) and those of Cambodia-based international and local non-government agencies. Th e important point to be made about all the sources discussed above is that they are more or less static portrayals of the Cambodian economy. Robequain and Delvert do depict economies that are in the process of dynamic evolution and to this extent they are economic histories. Nevertheless, their period of study is set within rather short timeframes. Current studies of the Cambodian economy, almost without exception, lack historical hindsight. Weaknesses in economic structures and institutions are commonly attributed to general destruction caused by three decades of confl ict, and historical analysis rarely goes beyond this simple reference. War and revolution most certainly did severely damage the Cambodian economy, but to what extent did these historical events change the underlying structures and relations of production, the patterns of the economy? What role did economic factors play in instigating war and revolution? An economic history should off er probable explanations, if not defi nitive answers, to questions like these. Th e aim of this monograph, therefore, is to study the patterns and structures that persist in various aspects of the economy as well as in policy and planning approaches so that Westerners who engage with the Cambodian economy whether for investment, development or for academic purposes, or to deliver humanitarian assistance, might better understand the point in time at which they are intervening and appreciate the Cambodian people's experience and past eff orts to modernise their country's xvi Preface economy. Th is is a general history of the Cambodian economy, not a technical economic treatise. It focuses on a series of deliberate eff orts over the course of the twentieth century to shape Cambodia's economy into a preferred mode or according to a preferred ideology. Cambodia, of course, was not unique in making these attempts, although the circumstances it faced and measures it adopted to overcome them were typically extreme. Other countries in the region, Indonesia under Sukarno, for example, pursued policies not dissimilar to those adopted by King Sihanouk in the post-colonial phase. With less rigour than Democratic Kampuchea, after 1975 the other states of former Indochina, Vietnam and Laos, also applied Marxist economic principles to revive their economies from near-total collapse caused by war. Since the early 1990s, and especially since the 1997 Asian fi nancial crisis, Cambodia, along with most of the member states of ASEAN, has been required to comply with the neo-liberal reform measures dictated by Th e World Bank/IMF. Cambodia's economic development, therefore, has taken place within the broader context of regional economic change and development. It is hoped that this study will make a contribution to the existing scholarship on the economic history of Southeast Asia and thereby assist Cambodian scholars to make critical comparisons and draw conclusions that will deepen our understanding of the way the economy functions and how it interrelates with other regional economies. While conscious of the pitfalls that the various approaches to the recording of such an economic history entail, I have chosen to adopt a purely temporal approach. Following an introduction that describes the fundamental features of physical and human geography, levels of human development and benchmarks of economic activity in Cambodia around the year 2000, the history of Cambodia's modern economy is traced from the latter half of the French Protectorate, to the post-independence (fi rst) Kingdom of Cambodia, through the Khmer Republic, the revolutionary regimes of Democratic Kampuchea and the People's Republic of Kampuchea, to around the midpoint of the third legislature of the Second Kingdom of Cambodia, that is, approximately the year 2005. Generally speaking, therefore, the time span of modern economic development in Cambodia coincides with the twentieth century. Within each of those already defi ned political eras, the economy is regarded from the viewpoint of the same socioeconomic categories, including administration and governance, population, human development, economic activity, foreign trade, aid, investment and debt, as well as public fi nance, banking and credit. Th e concluding chapter considers some of the challenges facing the Cambodian economy in the twenty-fi rst century.