Report highlights Cambodia’s competitive edge

In the midst of the still unfolding global economic crisis, countries worldwide are facing unprecedented pressures. Cambodia remains particularly vulnerable given both its level of development and its reliance on a very narrow economic base. Women, who make up the majority of the garment factory workers who have recently been laid off, are among those most severely affected by this crisis. Turbulent times may lie ahead for Cambodia and other countries with similar characteristics in terms of economic growth, social stability, and the livelihoods of their citizens.

 

UNDP, in cooperation with the Supreme National Economic Council and the Overseas Development Institute, undertook a study on Cambodia’s competitiveness.  The resulting report, Cambodia Country Competitiveness: Driving Economic Growth and Poverty Reduction, identifies sectors in which Cambodia has the potential to gain a competitive advantage. The report also describes medium- and long-term policy options to improve Cambodia’s competitiveness and sustain its economic growth and poverty reduction achievements. Looking at the main sources of growth – agriculture, garments, tourism, construction, and Internet and telecommunications – the study identified the main factors constraining growth, as well as strategies to alleviate those constraints.

“With the publication of this report, and through ongoing discussion with Government, development partners, private sector  and civil society, these ideas will continue to be shared and will contribute to discussion on how to continue to reduce poverty, and respond to the global financial and economic crisis,” said UNDP Cambodia Country Director Jo Scheuer. “By building a modern and prosperous nation that can compete in a highly competitive world, prosperity can extend to all Cambodians.”

The report has already generated a great deal of discussion and debate. Workshops and panel discussions have been held for lawmakers, representatives of the private sector, and students allowing the discussion to involve a much larger audience.

Improved competitiveness promotes economic growth and human development, which in turn enhances sustainable livelihoods and fosters more rapid and in¬clusive growth. Economic growth also has spill-over effects beyond poverty reduction. Sustainable economic growth enhances human development by creating better job opportunities and an environment in which businesses can grow, supporting greater accountability at all levels of decision making, and improving workers’ knowledge and skills. Similarly, greater human capital, an improved business environment and an equitable society generate more growth.

The current economic climate provides an unprecedented opportunity to re-evaluate and build upon Cambodia’s recent achievements, and to strengthen its economic foundation for sustained development and poverty reduction. The challenge now is to identify reforms and incentives that will keep the country’s growth on track and ensure continued improvements in human development, especially for Cambodia’s poorest and most vulnerable.