With the national elections just around the corner, the government yesterday released a report high-lighting its biggest economic achievements in the last 20 years.
Titled ‘20 – Year Achievements Under the Leadership of Samdech Techo Hun Sen’, the report draws from data compiled by government agencies and major development partners to showcase Cambodia’s economic growth from 1998 to 2018.
According to the report, during the 20-year period, GDP in the country skyrocketed by more than 692 percent, going from just over 3 billion in 1998 to more than 24 billion this year. GDP per capita, mean-while, went from $253 in 1998 to $1,563 in 2018, a jump of 125 percent.
Poverty rates declined in spectacular fashion during the last two decades, from 53.2 to 13.5 percent now, according to the report, which also highlights that inflation went from 14.7 percent in 1998 to 3.4 this year.
The report also points out that exports have risen spectacularly, by as much as 1,415 percent to reach a value of more than 12 billion this year. International reserves experienced a similarly dramatic hike, from $390 million in 1998 to more nearly 9.5 billion in 2018 – a 2,234 percent increase.
Chan Sophal, director at the Centre for Policy Studies, told Khmer Times the figures in the report accurately reflect the reality in the country.
Everyone can see how the country now is different from 1998, due to many factors ranging from foreign aid to sound macroeconomic management.
“Such growth has not happened only in the cities but also rural areas,” he said, explaining that peace and economic openness have attracted large inflows of foreign direct investment and tourists into the country, which have fueled the country’s impressive economic growth.
“However, the next stage of economic growth will be more challenging,” he said. To continue growing at a similar pace, Cambodia will need to focus on developing its human capital and technological capabilities, he explained.
“Chief among other things is how to ensure fair competition between all levels and all kinds of firms. Rigged rules and partial legal services will obstruct the next stage of progress. The middle income trap is not easy to avoid. It requires building the right political and economic institutions early on before it becomes too difficult,” he added. Song Saran, owner of Amru Rice, the biggest Cambodian rice miller and exporter, said based on his experience of a thriving rice sector the report seems to present an accurate picture of economic development in the nation.
He said the government’s efforts in the last 20 years have opened up markets abroad for local agricultural producers. Since it launched its rice production policy in 2010, investment from local and foreign investors in the industry has surged, together with exports and production capacity in the sector.
“The government put in place a very successful policy for the rice sector that has been very beneficial for both exporters and farmers. It has helped improved production and secure international recognition in terms of quality for our milled rice,” he said, adding that, despite these accomplishments, several challenges remain, particularly high levels of economic inequality among Cambodians.
From 1994 to 2014, the country’s economy has grown at an average rate of 7.7 percent, according to a report by the World Bank released in 2014 in which it describes the Kingdom as an “Olympian of growth”, and the sixth fastest growing economy in the world.
The Kingdom owes much of this impressive economic growth to the preferential trade status it enjoys with a number of developed nations, including the European Union. Under the Everything-but-arms (EBA) treaty with the EU, Cambodia has duty-free access to the bloc’s market.
The EU, however, issued a report in April that highlighted human right abuses in the Kingdom and hinted at the possibility of cutbacks in the EBA.
The European report noted a “list of issues”, which include worries over the deteriorating situation of human rights in the country, the shutting down of media outlets, and the worsening democratic at-mosphere, particularly after the dissolution of the main opposition, the CNRP, in November.
In response to that report, last month Cambodia sent a goodwill mission to Brussels that seeks to lob-by European lawmakers to keep the Kingdom’s current preferential trade status with the European bloc intact.