Khmer Times’ Sok Chan sat down with Lim Solinn, Oxfam’s country director, to discuss economic inequality in the country and how Oxfam plans to curb it. They also discuss how to modernise the tax system, mobilise domestic revenue and increase public spending on health, education, gender and social protection.
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Oxfam Cambodia and the Cambodia Development Resource Institute (CDRI) are working on a new report that will examine poverty and income disparity in the kingdom. Titled ‘Inequality and fiscal accountability in Cambodia: Cambodia’s commitment to reduce inequality’, its findings will be used to guide the drafting of Oxfam’s action strategy for the years 2019-2023.
KT: What’s your strategy to tackle poverty and inequality in the kingdom? What programmes have been undertaken thus far?
Ms. Solinn: Our mission is to work alongside with vulnerable and poor people to help them help themselves to overcome poverty. Our mission is to fight global poverty anywhere in the world and our strategy is to work with people in a sustainable way so they can tackle poverty, as well as reduce disparity and inequality among people and ethnic groups.
In Cambodia, Oxfam has launched various humanitarian relief and development programmes to help people fight extreme poverty in accordance with the capacity of the local people, civil society and local authorities.
We have a wide range of programmes to match Cambodia’s specific development level. We run microfinance programmes at the community level. We have various livelihood intervention programmes, like disaster preparedness and agriculture and climate change adaptation projects to help people combat the effects of climate change.
We also look at issues surrounding governance, sustainable management and natural resources. Examples include community fisheries, forestry, water privatisation, and the economic empowerment of women.
KT: How successful have these programmes been in Cambodia?
Ms Solinn: It’s hard to tell because we do not collect data at a national level showing the impact of our programmes. What I can tell you, however, is that poverty alleviation is a huge undertaking that requires everyone to work together. In Cambodia, the government has been taking on a leadership role, with development actors and Cambodians themselves coming together with governmental support and guidance to fight against poverty.
The way Oxfam operates is we seek to understand the role of every stakeholder and their choices of investment to achieve inequality reduction, and then we identify the areas where we can contribute the most and with the highest impact. We are very conscious about the sustainability and scalability of our work.
According to the government, the number of Cambodians living under the national poverty line fell from 47.8 percent in 2007 to 13.5 percent in 2014. From 1994 to 2015, the nation’s GDP grew at an average rate of 7.6 percent. Not many other countries in the world enjoy such high growth rates and it is possible in Cambodia due to the cooperation between the government and the rest of stakeholders, who have initiated a successful multi-dimensional poverty alleviation programme.
Our report on Myanmar mentioned Cambodia as the prime example in Asia of a government taking on a leadership role and successfully reducing the wealth gap. From 1994 to 2015, the work done in reducing poverty and inequality has been truly impressive.
We, at Oxfam, are very proud of our contribution to poverty alleviation and inequality reduction since 1979.
KT: Can you tell us about your recent study done in cooperation with CDRI?
Ms Solinn: It is a research project that has involved several ministries and international agencies like the International Monetary Fund (IMF). Its findings will help us design our next five-year programme for inequality reduction.
Our goal for the next five years is to set the fundamentals that will help the country become a high middle-income country, while, at the same time, avoiding the middle income trap. We’ve seen many countries get stuck in a middle-income development stage, which usually brings high levels of inequality between the rich and the poor.
Cambodians, for example, are much better off than three decades ago, but the gap between the rich and the poor has widened. Together, we need to figure out the type of economic system, social policies and health care and education systems that can help reduce that gap.
We need a fairer economy to avoid the middle income trap and to support the country to become a major player in the region. Cambodia has already set an example to other countries in the region on how things should be done in terms of ending extreme poverty, so we should do more and be a role model.
KT: What sectors does the research focus on?
Ms Solinn: We look at a broad range of issues because inequality and poverty manifest in many different ways. For example, we address governance, the economic system, social spending, tax collection, different types of development interventions, as well as education and health care investment.
If we didn’t monitor inequality we would fail to understand how it changes over time and we would not see the opportunities that arise to tackle it effectively.
By maintaining a holistic view and monitoring inequality very carefully, we find ourselves in a better position to introduce policies and development programmes that are effective, and that help Cambodia enjoy economic growth and social wellbeing without putting people at risk of falling back into poverty.
Our research focuses on three main areas. First, we look at diversifying and mobilising revenue through tax collection. For example, we examine progressive taxation, including opportunities to diversify revenue and make taxation in Cambodia more progressive. One of the questions we ask is: should people who earn more than one million dollars a year be paying the same taxes as someone who earns $20,000?
Secondly, we are looking at fiscal accountability and opportunities to increase social spending on education, health and social protection. We want the project to go deeper and dig out the constraints the government faces and how to address them.
Last but not least, we have labour policy. We are looking at labour rights, focusing on spending on social and public services and social protection. This includes higher wages for ordinary workers and stronger labour rights, particularly for women.
KT: When will the study see the light?
Ms. Solinn: We aim to publish the study this year.
KT: Generally speaking, what is the awareness level among Cambodians regarding the importance of paying taxes?
Ms Solinn: We believe there is opportunity to strengthen it. We think the government’s tax reform has produced positive results and increased tax collection revenue, but more can be done to address citizens’ perceptions on whether or not everyone has to pay taxes, and what is a fair amount to pay. Our findings will hopefully shed some light on the opportunities to work together and further reduce poverty in Cambodia over the next five year.
KT: Tell us about your agricultural programmes and what has been achieved so far?
Ms Solinn: We aim to support vulnerable farmers from a livelihood and a market perspective. For example, we’ve introduced a number of projects to help smallholder female farmers become commercially self-sufficient by helping them diversify their income at a local level and finding new markets for their products abroad.
KT: Do you have any recommendations for the government?
Ms. Solinn: We commend the government for their work in reducing poverty and increasing social spending. We hope to further align with the government’s agenda and expect the government to keep prioritising poverty reduction. If they continue their work as planned, the country will eventually become a role model for poverty reduction in the region, and social wellbeing and economic growth will continue.