SOCIAL AND ECONOMIC WELL-BEING RECONSTRUCTION IN CAMBODIA.

by Major Abdul Latif Mohamed RMAF

1. General.

After 30 years of civil war, Cambodia facing an enormous problem in reconstructing her social and economic well being. In some areas they are not only are construction but a mere construction from what appear to be shambles.

Among the major actors in this framework are the Cambodia government, transnational actors such as Asian Development Bank, IMF, World Bank, World Health Organization (WHO), UNESCO, International Labor Organization (ILO), United Nation Development Program (UNDP) and NGOs such as ROSE, Human Right Watch, Friendly Planet and Mines Advisory Group.

Even though the social and economic well being in Cambodia has entering the phase of fostering sustainability, various problems still plague this unfortunate nation.    The major  problems which are faced by the Cambodia government are heavy demand on National budget, relocation of ethnic Vietnamese refugees, high poverty level, a chaotic public health-care, wide spread of AIDS, high illiteracy level and bad rural access.

2. Following will be the analysis of the situation on ground in Cambodia in comparison with Post-conflict Reconstruction Framework.

a. Social Well-being.

i.                     Refugees and Internally Displaced Persons (IDP).

In April 2002, the United Nations has moved 905 ethnic minority Vietnam refugees from two camps just inside Cambodia to Phnom Penh in preparation for resettlement in the United States.[1] Apparently after this event, the Cambodian government will close the camps and seal its border to new asylum seekers.

ii.                   Food Security.

Agricultural Development and Market Mechanisms.

Cambodia is one of the 49 most underdeveloped nations in the world, in which 36 percent of its 11.77 million people now live under poverty line and per capita income in 2001 was only 210 U.S. dollars.[2]

Cambodia also faces food shortages of its main diet, which are rice, vegetables, dairy products, sugar and flour.   Concerted attempt was made by the government to increase rice production.

To increase rice and other agricultural production, the government encourages foreign investors to invest in the farming sectors and the introduction of advanced technology and good seeds in order to multiple yields per unit area.  Incentives are being given in terms of exempting all taxes for agriculture mechanized equipment, seeds and fertilizers while allowing the investors to rent the land for up to 90 years.

For the market mechanisms, the government authorities have set up associations for purchase and export of agricultural produce, develop small-scale industrial zones and processing parks for agricultural goods, and launch a campaign of “One Village, One Product” so as to foster export of farm produce and substitute home-made goods for imported ones. In the meanwhile the Ministry of Commerce also introducing funds for rural development to help farmers expand the markets for domestic goods.

Industries of garments and tourism have been identified by the authorities as two pillars in the national economy which can generate 50 000 jobs a year and gain foreign exchange for national treasury.  About 90 percent of the 150000 workers nationwide involved in garment enterprise are from rural areas and this is making great contribution in speeding up the alleviation of poverty in the countryside.

Recent development reveals that Cambodia has already achieved preliminary results in implementing measures to reduce poverty.  The paddy field in the year between 2001 and 2002 increased by 19 percent to 4.099 million tons, with surplus paddy of 569000 tons for export.[3]

iii. Public Health.

(1). Medical Capacity.

This is among the sectors which needed reform at its earliest.  Pol Pot regime had eliminated most of the doctors in Cambodia and it is estimated that only 49 trained physicians survived the regime.[4]The effect of prolongs war and subsequent consequences (such as landmines) had left many of the survival inhabitants crippled in various degrees. At present Public Health is very rudimentary in nature. Most of the Khmer Rouge army surgeon received no formal training and are currently seeking recognition as doctors.

Despite high level of poverty, Cambodian can only received free surgical care from two sources which are the Sihanouk Hospital and the international NGO called ROSE that perform rehabilitation and opthalomological surgery. The rest of the hospitals imposing fees on patients with Khmers doctors see every patient as a potential $100 bill.[5]

      Health sector reform project is led by WHO (World Health Organization).  It is noted that pharmaceutical anarchy and short of qualified physicians are the most formidable obstacles to this reform.  Most private health care in Cambodia is provided by nhek luok thnam (village drug sellers) who smuggle counterfeit and substandard drugs from neighboring countries.[6]

      Expediting the formal training to graduate qualified physicians and stringent enforcement on medical practices are seen as the absolute necessities in the development of public health care.

(2). Prevention of Epidemics.

Foreign aid workers have warned that Cambodia risks losing another generations through AIDS.[7] A survey conducted by National Center for HIV/AIDS in year 2000 revealed 169000 people between 15 years and 45 years of age are living with HIV and more than 80000 people had died of AIDS. Consequently some reporters making similarities these epidemics have with Khmer Rouge’s killing fields. In order to combat this disease, Cambodia’s Parliament had passed a new legislation which enable police to prosecute people who deliberately spread the disease with a fine of up to one million reils (250 dollars) and up to one year in jail. This legislation also outlaws the sale of fake drugs, which vendors say can cure the virus.

iv.Education System.

Among the finger prints left by Khmer rouge reign was the elimination of the   educated class. All literate people who lived during that era were virtually wiped out. Hence reconstruction of education system in Cambodia require enormous task. In December 2001, Asian Development Bank had approved US$38 million loans for Education Sector Development Program to support education reform which include:

(1).            building new schools in poor and remote areas, bringing education within reach of 100000 children.

(2).            Reduce cost of basic education to poor parents.

(3).            Improve the quality of education

(4).           Provide incentives to teachers who work under difficult circumstances

(5).            Decentralize education service delivery[8]

In another aspects, campaign of anti-illiteracy was launched nationwide for a period between 2001 and 2005.  This campaign which won support from UNESCO (the U.N. Educational, Scientific and Cultural Organization) was aimed at wiping out illiteracy of 200000 young people.Other non-profit organization such as the Friendly Planet also helping to build  schools in Cambodia by rising fund through donation and sales.

b. Economic Well-being.

            i. Economic Strategy and Assistance.

            According to Asian Development Outlook 2002 on Cambodia, “ the Public finances are weak as the Government makes transition between taxes on international trade to broader measures such as VAT. Concessional loans and grant are widely used to fiancé the capital needs of the country, which are extensive given two decades of war and neglect by international community.  The Government is committed to maintain fiscal stability with both revenues and expenditures scheduled to increase gradually as a proportion of GDP. By 2003, revenues should increase to around 13 percent of GDP with expenditures expected to rise to 17 percent.  Cambodia has a relative liberal trade policy and is open to both imports and exports.  The Government is also taking steps to align its trade policies with those of the ASEAN free trade area and WTO”.[9]

              ii. Physical Infrastructure, Transportation, Telecommunication and IT

            The bad rural access had been addressed by the Asian Development Bank with the grant of 27.2 million U.S. dollars loan to finance the project of building a functional road network into rural areas.  ADB Rural Infrastructure Engineer indicate that the necessary prerequisite to addressing the causes of poverty in rural Cambodia is access, since a functional road network is the lifeblood of the rural economy and social development and will give access to social infrastructure, markets, income-generating opportunities and social services.[10]

            Recently ADB also plans to extend US$286 million in loans to Cambodia for the period of 2003 to 2005 . This is to strengthen the development in environmental management, water resources, water supply, health, roads, power, education, agriculture, rural development and financial sector.

            Presently, Cambodia Telecommunication service is still inadequate and unusable to general public. International service is only limited to Vietnam and other adjacent countries.[11]

iii.International Trade.

         Cambodia major exports are timber, garments, rubber, soybeans and sesame. Its major imports are cigarettes, construction materials, petroleum products, machinery and motor vehicles. Major trade partners for imports are Thailand, Vietnam, China and Japan; while for export are Thailand, China, Vietnam, US, and UK. Cambodia has adopted a 10-year strategy with another five countries bordering the Mekong River to boost cooperation within the region. As part of the strategy is a cross-border agreement to facilitate the movement of people and goods. Among the identified projects are economic corridors spanning the entire region, a telecommunications backbone, a regional power interconnection and trading agreement, enhanced private sector participation and competitiveness, human resources development, flood control and water management and a strategic environmental framework.  Cambodia has also signed an accord with Vietnam and Laos to set up a triangle zone for economic development in the border rural areas of the three nations.[12]

            iv. Banking and Finance.

            Financial system in Cambodia is quite weak and thus limiting the capacity of monetary policy to influence the economy. The Central bank maintains a conservative stance and monitoring carefully the management of the money supply.  The Government had embarked in finance sector reform with the support from ADB. A number of unviable banks were closed in year 2001 while warning were issued to other banks. Further reform will include the improvement of supervision of banks and the establishment of interbank payment systems.

3. Gaps in social and economic well-being framework.

            High illiteracy level and high poverty level remain the major problem of the Cambodian population. These subsequently related to the field of public health and education systems. Even though Cambodia reconstruction shall be in the fostering sustainability since virtually foreign actors had long ago transferred  responsibilities to the indigenous authorities, many of the building blocks still remain in the transformation phase.

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