Economic growth, falling poverty

Project description

Title: Regional Economic Development Programme (Siem Reap, Banteay Meanchey and Oddar Meanchey provinces)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Cambodia
Lead executing agency: Council for the Development of Cambodia (CDC)
Overall term: 2014 to 2017

Zwei Frauen vergleichen während einer Schulung Reisqualitäten © GIZ

Context
Cambodia has achieved significant economic development and poverty reduction over the past 15 years. The poverty rate has fallen from 53 per cent in 2004, to well below 20 per cent in recent years. However, these hard-won gains are fragile. Many people who have escaped poverty remain vulnerable, and are risk falling back into poverty. It is therefore important that economic growth remains broad-based and inclusive. Some 90 per cent of the poor and those who have just risen above the poverty line live in rural areas. This is also true in the three provinces of Banteay Meanchey, Oddar Meanchey and Siem Reap in north-western Cambodia. With a combined population of around 2.2 million they represent a mix of densely and less densely populated areas with varying rates of poverty. At the same time, these provinces offer a broad potential for economic development. Two of them are on the border to Thailand; one contains the site of the Angkor ruins and is therefore a prime destination for international tourism, with the rapidly growing town of Siem Reap in its centre. It is these specifically local opportunities that provide the entry point for the promotion of broad-based economic development.

Objective
Poor rural people, especially women, use new and sustainable business and employment opportunities to increase their incomes and reduce poverty.

Approach
The programme, which is co-financed by the Swiss Federal Department of Foreign Affairs, is being implemented in cooperation with numerous public-sector partners at national, district and local levels, as well as with the private sector and civil society actors.

Building on consumer demand for selected goods, such as rice, vegetables and local handicrafts, the programme provides advice to actors along those value chains, from production to marketing. Expanding local and international markets create new opportunities, even for smaller producers in rural areas. In the programme’s training courses such producers acquire new knowledge and techniques. They find out how to obtain the latest price information, and learn about sustainable cultivation methods or how to improve the quality of their products. This raises the competitiveness of local agricultural and non-agricultural businesses; producers get connected with service providers, and product manufacturers with dealers or processing enterprises. Confidence develops between business partners along the value chain, and sound commercial relations emerge.

Newly established formats for dialogue involving the public and private sectors, small-scale producer initiatives and the civil society help people at the district level to perceive their own potential, while overcoming barriers to markets and developing the local economy in the long-term. The programme team involves the poorer and disadvantaged sections of the rural population in this process, especially women. They benefit from technical, organisational and entrepreneurial training. Thus the rural households develop confidence in their own economic capacities and behave with increasing self-assurance in an open market environment.

Public and private sector institutions acquire qualifications in the provision of technical and business services that are designed to meet the needs of small- and medium-scale farmers. With support from the programme team, the employees of the provincial and local administrations develop new role models as the providers of support services to promote private-sector activities.

Results
This programme builds on previous measures that were conceptually similar, but which were conducted solely in the province of Siem Reap. The programme team is now extending the experiences gained through those programmes to the provinces of Banteay Meanchey and Oddar Meanchey. For example, in Siem Reap, the share of locally produced vegetables sold at the local markets increased from seven to 25 per cent. The quality and quantity of rice that can be exported have also risen considerably. Around 17,500 smallholder farmers and artisan businesses have been able to raise their annual incomes by an average of about USD 200. That equates to a year-on-year increase in the combined income of around USD 3.5 million. About 15 per cent of these businesses previously existed below the poverty line. Small artisanal activities and vegetable production have proved particularly beneficial to women, as they can usually be performed close to home and are therefore well suited to the typical lifestyles of women in rural Cambodia. In this way, the programme has contributed to a reduction in poverty in the province of Siem Reap from around 50 per cent to approximately 20 per cent. Moreover, the partners in the public and private sectors have gained experience of the functions and effectiveness of the measures and instruments for economic promotion, and they continue to use them now.

The lessons learned from these activities are now being transferred to the new provinces of Banteay Meanchey and Oddar Meanchey, where conditions are similar to those in Siem Reap.

Contact

Wolfram Jaeckel
wolfram.jaeckel@giz.de