UNDP Regional Director for Asia and the Pacific, Mr. Ajay Chhibber, ends official visit to Cambodia

PHNOM PENH, 16 February 2011: During his three-day visit to Cambodia, UN Assistant Secretary-General and UNDP Assistant Administrator and Regional Director for Asia and the Pacific, Mr. Ajay Chhibber, met with Prime Minister Samdech Hun Sen; H.E. Ing Kantha Phavi, Minister of Women’s Affairs; H.E. Aun Porn Moniroth, Minister attached to the Prime Minister, Chairman of the Supreme National Economic Council (SNEC) and Secretary of State of Ministry of Finance; and H.E. Chhieng Yannara, Minister attached to the Prime Minister; other high level officials, development partners; and the UN Country Team in Cambodia.

While noting the socio-economic progress Cambodia has gained in the past decade, Mr. Chhibber said robust economic diversification, greater investment in human capital, and promoting inclusive growth to narrow rural-urban wealth gap can help the country improve its resilience against economic distress as seen in the recent global crisis.  

“The crisis marked a watershed moment for Cambodia. It threatened the reversal, not just of growth and development, but of a process of structural transformation that had offered enormous potential for Cambodia to accelerate its development efforts,” Mr. Chhibber said.

Mr. Chhibber made his remarks at the 4^th Cambodia Economic Forum (CEF) on Wednesday. He arrived on 13 February for his first official mission aimed at deepening the partnership between the Royal Government of Cambodia and UNDP in working to reduce poverty in the country.

In his meetings with Government’s leaders, he discussed a wide range of issues of strategic importance for advancing Cambodian development in medium and long-term. One of the outstanding topics in their discussions was a new South-South initiative, which could see UNDP, Cambodia, and China working in a trilateral partnership to pilot development projects that will benefit the people of Cambodia. This followed an agreement UNDP Administrator Helen Clark and China’s Prime Minister Wen Jiabao made at the MDG Summit in New York last year.

Mr. Chhibber was able to secure a support in principle from Prime Minister Hun Sen for the proposed partnership during their meeting on Monday, 14 February.

“The world is changing. It is no longer dictated by North-South, East-West engagements. The South-South partnerships hold great potential for Cambodia, which already has a long history of cooperation with China,” Mr. Chhibber said.

He described as “impressive” Cambodia’s progress in bringing down poverty rate to 30 percent in 2007 from some 47 percent in 1994. But he also stressed that, while achieving this gain, it is equally crucial for Cambodia to ensure that people who have come out of poverty do not fall back into it. This can to be done through intervention of social safety net in the form, for example, of cash transfer and fee exemptions in public health and education services.

“Cambodia’s medium-term economic strategy should be focused on policies and interventions that support inclusive growth, like investing and improving services in the rural economy where most of Cambodia’s poor live and where investment can have the greatest human development impact,” Mr. Chhibber said.

In his speech to the CEF, a high-level dialogue to influence policy direction for future development, he noted that Cambodia’s impressive growth – which was on average 9 percent per annum before the onset of the global recession– has contributed to significant reduction of poverty.

But the recession hit hard on the Cambodian economy, which has so far been powered mainly by garment exports, tourism, and construction sectors. Although its economy begins to recover, he said diversifying economic beyond these traditional growth drivers will go a long way to improve the country’s competitiveness and resilience against “adverse exogenous shocks” in the future.  

“If the crisis has brought one proposition to global attention, it is this: resilient growth is as important as high growth,” he said. “Resilience comes from greater inclusion, be it of citizens, of groups, of workers or of regions, in the process by which growth is generated,” he added.

“The quicker you can diversify the better. We hope that there will be no more crises, but it is better to be prepared because one never knows what will come out of future direction of the global economy,” he said.

Mr. Chhibber also encouraged Cambodia to expand intra-regional trade to reduce reliance on U.S. and E.U. markets where recovery will be slow to take hold. He said the shifting of economic gravity to Asia, led by growths in China and India, represents a good potential for Cambodia to tap into for its own growth. “This is happening right at Cambodia’s doorstep, and Cambodia should take advantage of this enormous dynamism presented by the growths in China, India, and other parts of Asia,” he said.

Emerging mining and oil and gas sectors represent new entrants to drive growth and accelerate progress toward achieving Cambodia Millennium Development Goals. “But for this to happen, transparent mechanisms need to be in place for effectively managing and using revenues, and channeling them for improving health, education and other development needs,” he said.

Mr. Chhibber and senior government officials also discussed key elements of the new UNDP’s country programme for 2011-2015, which aligns with the Government’s National Strategic Development Plan. A key feature of the new UNDP’s programme is support to the Government’s 10-year strategy to clear the country of all mines to release land for productive use thus contributing to the achievement of the 9^th CMDG.

H.E. Chhieng Yannara confirmed the Government’s endorsement of the new UNDP’s country programme.