The continued economic growth of Cambodia draws various theoretical opinions and forecasts from well educated people or so-called experts but do they have any effect? What about the targets set by the Cambodian government on becoming an upper middle-income country by 2030 and a high-income economy by 2050?
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I believe sustaining a considerable growth of Cambodia has in the last two decades been almost “mission impossible”, considering all influences worldwide. Additionally, the growth figures in the last two decades seem narrow-minded especially when one sees what happened with the past growth in China.
Cambodia’s economy is still strongly dependant on agriculture, tourism and garment. More than half its labour force is engaged in subsistence farming, and Cambodia remains one of Asia’s poorest countries. If we talk about “economic freedom”, Cambodia ranks 22 among 43 countries in the Asia–Pacific region, and its overall score is below the regional and world average.
In the meantime, banking has become more market-oriented with credit increasingly available to the private sector. Privatisation has gradually improved the efficiency of the financial sector and its influence, backed by investment power from China especially, through its “One Belt, One Road” programme, giving a boost to the economy. More importantly, oil deposits found beneath Cambodia’s territorial waters and the prospective exploration of mineral resources (bauxite, gold, iron and gems) will probably reshape Cambodia’s economy in the near future.
Diversifying growth sources, investing in knowledge to boost agriculture, manufacturing, and high-tech industries is one of the most important pillars for Cambodia’s economic growth in the future. Investment in digital infrastructure is crucial and will transform the Kingdom into a digital economy within five years if planned well.
With a population of 16.5 million people and 50 percent of that below the age of 23, it is possible for Cambodia to become a middle-income country within 15 years if the government invests more on education and “imported knowledge”.
Another important factor is that poor countries like Cambodia often have high corruption rates, which was witnessed for decades in China, and other countries. In most cases, it is part of the culture and growing process of a country. But governments try to reduce corrupt processes like what was done in China or eliminate it. This might work in theory. In practice though, there would always be corruption although many Western countries refuse to admit it.
In January this year, Chinese president and general secretary of the Communist Party Xi Jinping called for an all-round fight against corruption and improve its oversight system to secure greater strategic outcomes in full and strict governance over the party.
Xi said the sweeping victory secured in the anti-graft campaign must be consolidated by strengthening deterrence so that officials “don’t dare to, are unable to and have no desire” to commit acts of corruption.
Khmer Times posted last year that Cambodia cannot sustain its growth without addressing corruption, strengthening its bureaucratic capacity and state institutions. Acknowledging such shortcomings, Prime Minister Hun Sen has continuously reminded his administration to implement “deep reforms” to deliver better public service to people. He keeps reminding his cabinet to implement the motto, “Looking into the mirror, taking shower, scrubbing the dirt, treating the wounds, and admitting to surgery” (Quote – Khmer Times)
In my opinion, Cambodia is on the right track. It is trying to improve and reform step by step but the Kingdom of Wonder still has a long way to push for higher economic growth in future.