The International Day for the Eradication of Poverty: Middle income Cambodia's three poverty challenges

17 Oct 2017

 Cook stove production in Kampong Chhnang, Cambodia

When the poverty data for the current round of Cambodia’s Socio-Economic Survey (CSES) is published next year, it will almost certainly show a further decline on the 13½ per cent of the population living below the national poverty line in 2014. Based on past trends, the rate could be below 10 per cent. This would continue the dramatic pattern of decline established some two decades ago, when poverty affected a staggering 60% of the population. Over this period literally millions of Cambodians have been lifted out of poverty. The trends on the international dollar-a-day poverty line have been equally dramatic.   

This is a real cause for celebration and marked Cambodia out as a global achiever. But as a newcomer to Cambodia, who has worked on poverty issues elsewhere in the world, I want to underline that this does not mean that poverty - the deprivation of human lives and livelihoods - is in terminal decline and should no longer figure as a policy priority. I want to argue rather, that Cambodia’s poverty problem is evolving, that this country faces a series of significant poverty challenges, and that these have become more complex.

First and foremost, it is important to keep in mind that the national rate is rooted in a method which defines the poverty line in terms of the cash equivalent of meeting basic needs, at heart, the consumption of less than around 2200 Kcals per adult per day. As most will agree, this is a very limited minimum, and a form of poverty that a now middle-income Cambodia should be seeking eradicate in the near term. Yet it is also the case that the engine of poverty reduction, a vibrant and rapidly growing economy, is less effective in reaching the poorest, who often live in remote areas or subsist at the margins of society, meaning that specialist actions and initiatives will be required.   

Second, while Cambodia has done an exceptional job of cutting the numbers in poverty, too many people are forced to get-by just above the poverty line. Examination of the CSES data for 2014 shows that over 50 per cent of the population, although not poor, are highly vulnerable to poverty, and that an income shock of just 20% would more than double the headcount rate. In today’s uncertain and highly interconnected and interdependent world, a severe environmental event or a global recession could wipe out decades of poverty reduction. Building the resilience of non-poor households is also vital therefore.

Third, while we have always known that poverty is not only about income, it is only in recent years that we have had the tools to measure deprivation across multiple dimensions. Analysis undertaken by Oxford University’s Human Development and Poverty Institute, using the Multi-Dimensional Poverty Index (MPI) toolkit, reflecting education, health and living standards, found that in 2014, some 33 per cent of Cambodian’s were multi-dimensionally poor. This is far higher than income based measures, and their analysis also suggests that the rate of decline has been much slower.

All of this adds up to a much more demanding task for policymakers. It requires Government, development partners and other stakeholders, to simultaneously address these three distinct but also interlocking poverty challenges. First, complete the final mile of eradicating extreme income poverty, through tailored area and group based interventions. Second, build the resilience of the burgeoning lower middle-income groups, through improved social protection and by ensuring opportunities exist for people to get on via a vibrant labour market. Third, and potentially most challenging, tackle poverty across multiple dimensions. For which, a good starting point would be the design and adoption of an MPI framework tailored to Cambodia’s needs, followed-up by work to improve the access and the quality of key public services.

This is an ambitious agenda, but one which the first SDG, the eradication of poverty in all its forms, calls on all nations, and all development actors to deliver on. It is also one, given strong past performance and continuing high levels of economic growth, that is genuinely deliverable here in Cambodia.  

 

 

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