UNDP Regional Director stresses improving equality for Cambodia’s growth

May 1, 2014

Regional Director Haoliang Xu chats with school children in Takeo province during his recent visit to Cambodia. (Photo: UNDP Cambodia)

PHNOM PENH, 1 May 2014 – As it inches closer to lower middle-income country status, Cambodia should make sure its future growth is both inclusive and sustainable, and that it contributes to reducing, rather than increasing, inequality, said Mr. Haoliang Xu, UN Assistant Secretary-General, UNDP Assistant Administrator and Regional Director for Asia and the Pacific.

Mr. Xu made the comment as he wrapped up his five-day visit to Cambodia, which started on 27 April. He met with Cambodia’s Prime Minister, Samdech Hun Sen and other high-ranking government leaders to discuss a wide range of issues of strategic importance for Cambodia’s development.

The Assistant Secretary-General took note of the remarkable progress Cambodia has made in reducing poverty and the effort to realize national targets in Cambodia Millennium Development Goals. The poverty rate has been substantially reduced – to 19.8 percent from 47.8 percent about a decade ago. The economy has maintained steady growth, reaching a six year high of 7.2 percent last year. The launch of the ASEAN Economic Community by 2015 will present new opportunities as well as challenges for Cambodia, he said.

“The achievements are truly commendable, yet much remains to be done to ensure that growth will be inclusive and sustainable,” Mr. Xu said.

“Historical experience has shown that transition into Middle-Income Country (MIC) status tends to be accompanied by rising inequalities, socio-economic exclusion and increasing degradation of the environment and natural resources,” he said.

 UNDP Regional Director Haoliang Xu and Cambodia's Prime Minister Hun Sen pose for picture after their meeting on 29 April 2014. (Photo: UNDP Cambodia)

When a country achieves the MIC status, the decrease in the Official Development Assistance (ODA) will follow and the nature of assistance will change from grants to loans. Although time and ODA are still in Cambodia’s favor at least over the medium term, ensuring strategic use of the assistance will be increasingly important and “should place a premium on knowledge-based development solutions,” Mr. Xu said.

“MICs face more complex issues and require prompt responses based on evidence-based policy research and analyses, and effective coordination among the government’s institutions,” he said, adding that UNDP stands ready to contribute to this process.

A key highlight of his visit was to conduct a mid-term review (MTR) meeting on UNDP Country Programme 2011-2015. Mr. Xu co-chaired the meeting with H.E. Chhieng Yanara, Minister Attached to the Prime Minister and Secretary-General of the Cambodian Rehabilitation and Development Board. The meeting – which was attended by some 90 representatives from government ministries, UN agencies, development partners and NGOs – reviewed the current programme and explored opportunities for UNDP’s support to Cambodia’s development in the years to come. 

While the country undergoes rapid social and economic transformation, one of the critical issues that are emerging is the underinvestment in human capital. Cambodia is also in the midst of a demographic dividend. Young people make up more than half of the country’s population of 14.7 million. However, many of them lack skills and therefore end up in low-paid employment or become migrant workers. 

“The underinvestment in human capital and skills development is a concern for all,” Mr. Xu said. “By equipping its people with the right education and skills, Cambodia can avoid a ‘low-skill, low-development trap’, thus reducing vulnerability of its economic growth against unpredictable shocks in the future,” he added. 

The Cambodia’s visit was Mr. Xu’s first since assuming office as UNDP Regional Director for Asia and the Pacific in September 2013.