By Heng Dyna
A Khmer version of this article was published in the Phnom Penh Post on May 17, 2013
The article “IMF: How to grow Cambodia” is optimistic and motivating, sharing lessons on how Cambodia can sustain its growth take-off. It also reflects the commitment of an effective IMF team to institutional building and economic growth in Cambodia. Indeed, never before has Cambodians lived in such an exciting moment: long period of political and macroeconomic stability, robust economic growth, located and integrated in the dynamic region, evolving institutions, and hopeful young population.
However, this optimism should not overlook the major challenges and risks that we, the Cambodians, need to address in order to avoid disruption of Cambodia’s growth and development. At the same time, Growth has to translate into poverty reduction and job creation. In this regards, Cambodia should focus on the inclusiveness of growth, rather than just growth. Many studies, including those from the IMF, have demonstrated that more inclusive growth is likely to be more durable growth.
Development experience have shown that sustainable and inclusive growth is based on three key areas: (i) creating the right climate for investment and growth; (ii) investing in people; and (iii) ensuring that growth is sustainable and inclusive by protecting the environment. The first point was mentioned in the “IMF: how to grow Cambodia” article.
Investing in people means that, as soon and as fast as possible, Cambodia needs to improve health and skills of population so that they can be more productive and gain more from the production chain. So far, our growth has been largely driven by physical capital investment and “peace dividend”. Investing in our people will require not only additional budget for education and health care, but also the efficiency in our spending as well as leveraging our media in skills training and health awareness.
The environment affects everything- the food we eat, the water we drink, and the air we breathe. Gradually, we observe that environmental issues put pressures on economic and health issues. Yes, Cambodia needs growth, but it also needs a greener growth that respects a healthy livelihood and environmental sustainability. That means Cambodia needs a good planning for quality urbanization and environmental-friendly economic expansion.
Apart from these three key areas, Cambodia also needs to reduce institutional risks by ensuring the stability and the quality transition of governance-from weak to strong; from old to young- through institutional building. The baton is being passed to the younger generation now and we need to ensure that our capable and talented younger generation can engage in leadership and public services based on meritocracy.
Cambodia’s dream belongs to all Cambodians. And the transitioning from a developing to an emerging market economy is more than just about number. It needs inclusive growth and better quality of life. Growth is just a means to our ultimate goal, a happy and prosperous society with dignity. To reach there, our institutional capacity and good public service delivery, especially in education and health, needs to be in place. The rapid growth over the last decade should give us enough confidence to think and do so.