Project description

Title: Regional Economic Development – Green Belt, Siem Reap Province
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Cambodia
Lead executing agency: Office of the Council of Ministers (CoM)
Overall term: October 2007 to September 2015

Context

Since the end of armed conflict and the civil war, Cambodia has made good progress in political and economic reconstruction. Reforms with democratic elections at national and local level mark important steps toward more democracy and decentralisation. With an annual growth rate of about 7 percent, macroeconomic development is considerable. Nevertheless, the number of poor people in rural regions has been slow to decline. The basis for growth is narrow: the growth poles in the textile and tourism sectors are concentrated around urban centres such as Phnom Penh and Siem Reap and radiate very little to the surrounding rural areas. The agriculture sector, whose growth would generate the most poverty-reducing effects, develops only slowly. The rural population has a less than average share of economic development and the distance between rich and poor, like the urban-rural gap, is steadily widening.

That also applies to the Siem Reap programme region. While in Luang Prabang (Laos) and in Da Nang (Vietnam) more than a quarter of all local earnings have a poverty-reducing effect, in Siem Reap this rate is only 5 percent. The rural population, especially the poor, have hardly any share of the economic development in the province. Depending on the product and the season, local products make up only 20 to 50 percent of the fruit and vegetable market.

Overall, only about 40 percent of the products tourists consume and purchase originate in Cambodia.

Objective

The rural poor have a larger share of the added value of the market in Siem Reap. The benefits derived from the tourism industry are more fairly distributed, socially and regionally.

Approach

In order to use the economic potential of the tourism industry for rural development and poverty reduction, the programme pursues an integrated approach: the development of selected value chains is linked to regional economic promotion and regional management as well as to the training of decentralised structures.