To a Better Cambodia

To a Better Cambodia

To a Better CambodiaFrameworkInput ProcessOutputControl and EvaluationInput4 factors of endowmentCurrent condition of CambodiaPolitical and economic system in CambodiaASEAN 2020 agreementCambodias position in ASEAN4 factors endowmentLabourCapitalLandEntrepreneurs4 factors endowmentLabour

Cambodia is composed with more people from 10 to 24 years old

4 factors endowmentLabour

The participation Rate for the labor market is quite equal from 20 54 years old.


However, in Cambodia the labor force is dominated by age group is from year 15 34 years old


Sadly, child labor in Cambodia also takes quite significant part which is 12.5% of the total population with 43.6% employment/ Total 10-24 years old population. It suggests, that Child tends to go to the labor market than to the education system

4 factors endowmentLabourMost of the Labor are working in Agriculture sectors. But it is not applied in the Capital city and the other Urban cities. So it tells that overall, labor in Cambodia is working at agriculture that require less education

4 factors endowmentLabourIt can be proven from the data that tells number of employed people are mostly joining primary school only and very limited people join post-secondary education or university level.

4 factors endowmentLabourMoreover, even in Industry and Service sectors, the workers are mostly only primary school graduates

http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-1218567884549/5289593-1224797529767/CambodiaDFSG02.pdf114 factors endowmentCapitalNumber of FDI coming to Cambodia keeps increasing from year to year from 785 million USD in 2011 to be 1410.2 million in year 2012

http://www.worldbank.org/content/dam/Worldbank/document/EAP/cambodia/Cambodia_EAP_Update-Oct2013_ENG.pdf124 factors endowmentCapitalThe biggest FDI inflow is coming from China which takes 23% of Total FDI inflow to Cambodia and the rest are coming from other countries in Asia and Europehttp://www.worldbank.org/content/dam/Worldbank/document/EAP/cambodia/Cambodia_EAP_Update-Oct2013_ENG.pdf134 factors endowmentLandThe area used for Agriculture in Cambodia is increasing to be 32.04 %

4 factors endowmentLandHowever, The land that is used for Forest is decreasing year by year. This means that most de-forestation happens to be changed to be used for other purposes.

http://www.tradingeconomics.com/cambodia/arable-land-percent-of-land-area-wb-data.html154 factors endowmentLandAlthough the number of unused Land is still quite a lot (most of them are forest), but nature conservation is needed and Governement should not allow many deforestation actions happens.

http://images.nationmaster.com/images/motw/middle_east_and_asia/cambodia_land_1972.jpg164 factors endowmentEntrepreneursCambodia is regarded having worlds most social entrepreneurship. 60% of the populations are self-employed

Social entrepreneurship means that the ultimate goal is not neccessarily economic profitability but rather a vision for capitalising on a social opportunity in a way that makes a large-scale impact on a marginalised segment of society or for society as a wholehttp://www.yes-you-do.com/country/cambodia/http://www.phnompenhpost.com/special-reports/investing-social-enterprise174 factors endowmentEntrepreneurs

Cambodian prefer to be an entrepreneur and women entrepreneurship is highly promoted among young women.http://www.yes-you-do.com/country/cambodia/18Current condition of CambodiaFactor AbundanceNatural Resources esp. FisheryDiverse Mineral DepositsForest productsNational Resources (esp. Fishery)Approximately three-quarters of the population are directly engaged in agriculture and depend upon the land for their daily subsistenceAgriculture and forestry contribute nearly 32percentof the countrys Gross Domestic Product (GDP)86% of Cambodias Land is within Mekong catchment,and 20% of its catchment is within Cambodia containing high minerals and nutrients.Rank 4th for its Inland fisheries productivities (approx 400,000 ton/year) after China, India and Bangladesh. Coastal fisheries also takes contribution (approx 75,000 ton/year)Total marine and freshwater fisheries is estimated at 400,000 500,000 ton 12% of Nations GDPMore than 6 million people (45% of its population) work full time on fisheries and fisheries related industryhttp://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/EXTEAPREGTOPENVIRONMENT/0,,contentMDK:20266319~menuPK:537827~pagePK:34004173~piPK:34003707~theSitePK:502886,00.html

http://www.rsis.edu.sg/nts/events/docs/ICAFS-So_Nam.pdf20Diverse Mineral depositsBut still underdeveloped

http://mric.jogmec.go.jp/public/kouenkai/2013-03/briefing_130315_02b.pdf21Forest Products

58.1% of the Nations land are covered with foresthttp://www.fao.org/docrep/005/ac778e/AC778E09.htm22ForestryVery diversed forest products

http://www.fao.org/docrep/005/ac778e/AC778E09.htm23Current condition of CambodiaProblems:Land use is a complicated issue and difficult to manage and control in some provinces and cities. Small agricultural plots, landlessness farmers present a serious problem that effect rural people whose life is dependent on agricultural livelihoods, but have no land to use.Degradation of forests and lost biodiversities due to various aspects of illegal logging, land clearing and hunting of endangered/rare speciesScarcity of water for domestic uses (especially drinking water) and for irrigations are experienced by large numbers of Cambodians, especially in rural and remote area.Economic sectors such as mining, industry, energy, water supply and tourism development are facing many environmental problems that require urgent effective solutions in order to ensure long-term sustainable developmentSustain management of natural resources and the environement is still limited because of inadequate policies, legislation, and lack of human resources and action plans in government institutionsGender issues are found in both and public sectors.Cambodian children and youth remain unequal in their opportunity to receive quality educationCorruption Current Condition of CambodiaFrom the problems occur in Cambodia, it can be said that the factors of Lackness in Cambodia are:Managerial skill to manage its resourcesLow Human Capital to exercise Nations resourcesPoor governance and infrastructureASEAN 2020Key characteristics :A single market and production baseHighly competitive economic regionA region of equitable economic developmentA region fully integrated into global economyASEAN 2020Key measurement of Four Characteristics :Skilled Labor/ Human CapitalStrong National ProductsGood Infrastructure to possess well-flow tradeA competitive nations with attractive Business environment

Cambodia and the rest of ASEAN countriesHuman development Index

Cambodia ithe second lowest in terms of HDI and it is below the average ASEAN countriesCambodia and the rest of ASEAN countriesEducation (literacy level)

Meaning : Cambodia is one of the lowest in term of literacy level, and there is unequality between Male and FemaleCambodia and the rest of ASEAN countriesNations products

Cambodia has more natural resources that can be exported compare to Singapore Philipines and BruneiCambodia and the rest of ASEAN countriesNations products

However, Cambodias exprot to the world is very low compared to Singapore and philipines who have lower kinds of natural resources. It means that Cambodias product is not strong enough compared to other ASEAN nationsCambodia and the rest of ASEAN countriesGNI Per capita

So, it impacts to the Cambodias GNI which is the second lowest among ASEAN nationsCambodia and the rest of ASEAN countriesEaseness of doing business

Another reason why Cambodias GNI is low is because Doing business in Cambodia is considered quite difficult which also may result in low number of private businessCambodia and the rest of ASEAN countriesEaseness of doing businessRecent Private business cannot improve since there are many constraints in doing business and one of them is due to corruption

Cambodia and the rest of ASEAN countriesGlobal Competitiveness Index Rank(among 148 countries in the world)Singapore : 2ndMalaysia : 24thBrunei : 26thThailand : 37thIndonesia : 38thPhilipines : 58thVietnam : 70thLao PDR : 81stCambodia : 88thMyanmar: 139thAs a result : Cambodia is the lowest and considered as the least competitive country among ASEAN nationsCambodia and the rest of ASEAN countriesLogistic performance Index

Cambodia and the rest of ASEAN countriesConclusion:Cambodia is still not ready to face AEC regarding to its critical factors such as Human Development Index, Logistic Index, Low National Products and Easeness of Doing Business Index are relatively low among ASEAN countriesCambodia can be a loser due to its unreadiness to face AEC since Cambodia cannot compete with other ASEAN countries. Cambodia can be benefited from AEC since Cambodia is very resourceful country yet cannot be managed. So Cambodia can attract experts to exercise its nature and help the local citizens to develop and manage their resources

ProcessGovernment Goals and VisionsGovernment Policies and ActionsGood Governance for sustainable developmentAdam Smith Theory

Governments GoalsGovernments Goals to overcome problems and to bring Cambodia sustainable development:Peoples wellbeing and social development (social objective)Sustainability of national resources and environment (Environmental objective)Sustainable economic sector and infrastructure (economic objective)Governement GoalsPursuing full integration on three objectives in Local, National and Global LevelAlthough full integration sometimes cannot be applies, partial integration is considered as an achievement

Governement VisionGovernments long term vision to 2030 :To achieve a socially cohesive, educationally advanced, and culturaly vibrant Cambodia without poverty, illiteracy and ill health, and where all Cambodians live in harmony free of hunger, inequity, exclusions, and vulnerability, and where all citizens are able to reach their full potential in their chosen vocations to contribute to further progress of the Country and for an increasingly higher standard of living.To develop a sustainable society which ensures the long term sustainability of the natural resources and the environment on which all economic activities rey upon, and to develop sustainable economic, social and infrastructure activities, without negative environmental and social impact.Governement Policies and ActionsFor well educationEducation strategy Plan :Education strategy Plan will include : Primary and Secondary Policy, Upper Secondary Policy, Higher Education Policy, Non-Formal Education and Adult Literacy Policy, Youth Training Skill Policy, Pre-service Teacher training and Staff development policy

Governement Policies and ActionsFor well educationTarget and objectivesObjectives : AchieveUniversalNineYearBasicEducation, Give Student Access to University Studies, Integrate Sustainable Development Issues in the School Curriculum and Increase Public Awareness on Sustainable Development issues.

Governement Policies and ActionsSustainable TransportationSustainable Transportation will include : Rural road Strategy, Railway Transport Strategy, Governement Rectangular Strategy, Law on Land traffic

Governement Policies and ActionsSustainable TransportationObjectives :Improve the road Network of CambodiaEnsure a sustainable transportation system with safe, efficient, affordable, and evironmentally firendly modes of transportation covering the whole country

Governement Policies and ActionsSustainable National ProductsSustainable National Products is broken down into sub-classes policies and actions regarding to Cambodias factor of Abundance. It is divided to be Land Use and Agriculture, Forestry, Fisheries and Mining.Governement Policies and ActionsSustainable National ProductsLand Use and Agriculture will be : Land Law, Strategy of Land Policy framework, Policy Paper on Social Land Concessions in Kingdom of Cambodia, Sub-decree on Social Land Concessions, The Law on Environemental Protection and Natural Resources Management.Governement Policies and ActionsSustainable National ProductsLand Use and Agriculture Objectives :Secure land tenure for the rural poorIncrease thr productivity of the agriculture sector and other income generating activities in rural areaEnsure the use of sustainable agriculture practicesEnsure sustainable land use planning in all provinces

Governement Policies and ActionsSustainable National ProductsForestry will be : Law on Foresty, Sub Decree on community Forestry Management, Statement of Royal Government on Forest Policy.Governement Policies and ActionsSustainable National ProductsForestry Objectives :The forest covers Cambodia shall be minimum 60% of the land area and be managed in a sustainable way with participation of local communityProtected areas and national parks, shall cover minimum 3.3 million hectares, and each area shall have a plan for a conservation managementGovernement Policies and ActionsSustainable National ProductsFishery will be : Fishery Law, Royal Decree of Community Fisheries, Sub Degree of community FisheryGovernement Policies and ActionsSustainable National ProductsFishery Objectives :Ensure access to fishery resources for rural communities, especially the poorEnsure sustainable fishery practicesGovernement Policies and ActionsSustainable National ProductsMining will be : Law on Management and Exploitation of Mineral Resources, Sub-Decree no 72 on the environement impact assessment processGovernement Policies and ActionsSustainable National ProductsMining Objectives :Eliminate illegal mining and reduce environmental and health impact from mining activities, including avoiding the destruction of nearby human settlements and landscapes.Conduct mineral expolitation in a sustainable manner in compliance with national laws and international agreement and conventionsGovernement Policies and ActionsSustainable Business DevelopmentSustainable Business Development will be : Private Sector Development and Foreign Investor Law

Governement Policies and ActionsSustainable Business DevelopmentSustainable Business Development Objective :Promote private sector and financial sector reformPromote sustainable business development

Good Governance for Sustainable DevelopmentThree reform areas for good governance in Cambodia are:Fighting corruptionDecentralization and DeconcentrationParticipation by major group

Good Governance for Sustainable DevelopmentFighting CorruptionA variety actions, including reforms and behavioral changes, are needed to fight corruption. For public administration it needs to create a cluture of service which is efficient, effective, speeding and transparant.The strategy to fight corruption will be :EnforcementPreventionPublic/private support and education

Good Governance for Sustainable DevelopmentDecentralization and DeconcentrationIt means to strenghten grass root level of democracy as well as building and strenghtening local management capacity and providing a reasonable level of financial resourcesIt can be achieved through:Identification and prioritisation of local needs at local level.Fulfilling their local needs using tax sharing and ownership of revenues generated through local level taxesGood Governance for Sustainable DevelopmentParticipation by major GroupsTo achieve sustainable development, all groups must be giving their best to assist and support in monitoring and evaluationTherefore, Government should :Encourage and facilitate for the operation of NGO and civil societyDevelop a forum(s) and lines of communication to facilitate private sector and general public consultations with governement in a meaningful mannerEnsure that Government is transparent in its policy, management and actionsActively promote the awareness and implementation of the sustainable development nationwideAdam Smiths theoryIn International Trade, Adam Smith and David Richardo play a major role for Free Trade. Adam Smith tells that in International Trade, a country must be able to create its competitive advantage when a practice of Free Trade is happeningAdam Smiths theoryIn ASEAN, Free Trade (part from ASEAN economic community) will occur starting from 2015 to all Nations including ASEAN poorest countries which are Cambodia, Laos, Myanmar and Vietnam.ASEAN Free Trade will impose reduction of tariff. The Common Effective Preferential Tariff (CEPT) Agreement for AFTA requires that tariff rates levied on a wide range of products traded within the region are reduced to 0-5%. Quantitative restrictions and other non-tariff barriers are to be eliminated.

Adam Smiths theoryASEAN Free Trade Area will support Adam Smiths thoery that also tells that Nations would gain if they practice free trade. In accordance, nations should have competitive advantage and comparative advantage.

Adam Smiths theoryThen, Nations should Specialize by using its technology to create Nations Wealth. Each country has its own specialisation of goods and services depending on its productivity and competitive advantage.Adam Smiths theoryCambodias SpecialisationSince 2004, garments, construction, agriculture, and tourism have driven Cambodia's growth. GDP climbed more than 6% per year between 2010 and 2012. The garment industry currently employs more about 400,000 people and accounts for about 70% of Cambodia's total exports. In 2005, exploitable oil deposits were found beneath Cambodia's territorial waters, representing a potential revenue stream for the government, if commercial extraction becomes feasible. Mining also is attracting some investor interest and the government has touted opportunities for mining bauxite, gold, iron and gems. The tourism industry has continued to grow rapidly with foreign arrivals exceeding 2 million per year since 2007 and reaching over 3 million visitors in 2012http://www.indexmundi.com/cambodia/economy_profile.html65Adam Smiths theoryCambodias TechonologyAdam Smiths theoryCambodias TechonologyOutcomeCreating competitive advantage of CambodiaIncrease productivity and sustainable developmentWealth creationCambodias competitive advantageCambodias competitive advantage isLabour based production (cheap labour)Cambodias Garment industry has long had a cost advantage over its competitors, paying the lowest wages in the world. The growth in Garment industry has been robust with export increase 32% year-on-year over the first six months to reach US$ 1.56 billion. Cambodias current wage paid at US$ 80 http://www.just-style.com/analysis/cambodia-fights-to-maintain-competitive-outsourcing-edge_id119516.aspx69Cambodias comparative advantageCambodias comparative advantage isStrong Natural resources products such as Agriculture, forest products, and fisheries. Those are becoming Cambodias comparaite advantage not competitive advantage because Cambodias cannot produce them in lower cost and using advanced technology yet.

http://www.just-style.com/analysis/cambodia-fights-to-maintain-competitive-outsourcing-edge_id119516.aspx70Cambodias productivityCambodia is still facing major challenges, such as lowlabor productivity in many sectors, negative capital deepening, and insignificant contribution of total factor productivity to economic growth.Compared to other ASEAN countries, Cambodias productivity is still very low

Cambodias productivityHowever, due to governement policies and action, labour productivity in Cambodia itself has increased with an average 4.9% annual growth

http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/publication/wcms_158511.pdf72Cambodias GINI INDEXGini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. Thus a Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality.

Cambodia gini index : 36.0http://data.worldbank.org/indicator/SI.POV.GINI73controlGovernement Policies and ActionsFor well education

Target :Ensure that by 2010, all children complete primary school, and nine year basic schooling in year 2015Eliminate , by year 2010, gender disparity in nine year basic educationGive, by year 2020, a substantial part of the student access to university level studiesIntegrate, by year2010, sustainable development issues in the school curriculum on various levelCarry out, by 2010, a communication program on sustainable development in order to raise the public awareness on Sustainable DevelopmentGovernement Policies and ActionsSustainable TransportationTarget :Achieve, by 2010, upgrading of 4,100 km of primary and secondary roads and repair and maintain other main roadsAchieve, by 2012, upgrading of the main seaport and Phnom Penh port, two main railroad lines, and inland waterways particulary the Mekong and Tonle Sap RiversAchieve, by 2020, a transportation system which is based on environmentally friendly modes of transportation, vehicles and fuels

Governement Policies and ActionsSustainable National ProductsAgriculture Targets:Achieve, by 2015, Secure land tenure for the rural poor in the countryAchieve by 2015, an increase of the national rice yield to 2.4 t/ha and 50% increase of non agricultural income generating activities in rural areaAchieve, by 2015, sustainable agriculture practices in 20% of the agriculture landAchieve, by 2015, a sustainable land use planning in 50% of the provinces

Governement Policies and ActionsSustainable National ProductsForestry Targets:1. Achieve, by 2015, The forest covers Cambodia 60% of the land area and be managed in a sustainable way with participation of local community2. Achieve, by 2015, Protected areas and national parks, cover 3.3 million hectares, and each area with plan for a conservation managementGovernement Policies and ActionsSustainable National ProductsFishery Targets:1. Achieve, by 2010, access to fishery resources for the poor through a fishery reform policy2. Achieve, by 2015, the use of sustainable fishery practices in 70% of the fishing waters of the countryGovernement Policies and ActionsSustainable National ProductsMining Targets:1. Achieve, by 2015, a significant reduction of harmful health and environmental impacts from mining activities in Cambodia.2. Achieve, by 2015, mineral expolitation in a sustainable manner in compliance with national laws and international agreement and conventionsGovernement Policies and ActionsSustainable Business DevelopmentSustainable Business Development targert:1. Achieve, by 2015, a significant increase of private entreprises in Cambodia contributing to reduction of poverty in the countryAchieve, by 2015, a significant increase of financial institutions and instruments in the market for private sector developmentAchieve, by 2020, a significant proportion of private enterprises carrying out their business operations in accordance with sustainable business principles and criteria

Final ConclusionCreating competitive advantage is the thurst of taking advantage from AEC. Since the current condition of Cambodia is still far left behind than the other ASEAN nations, then Cambodia , can be said had fewer advantage that can be taken from the ASEAN Economic Community. The strategic thrusts of Cambodia are :Creating the best products of National resources that are agriculture, Fishery, Forestry, and Mining (product quality and GDP)Creating the best targeted place for foreign investment since the Labour cost is still the cheapest and Cambodia is close to natural resources (FDI and development)Creating best and cheapest products to be exported to ASEAN countries with lower price due to ASEAN integration ex : multi comps (global market competitiveness)Final ConclusionIn order to achive that, Cambodia tries to fit and fix its internal matters which include:Elevating Human Capital through well education developmentCreating sustainable infrastructure that connects citizens and resources across the nationsMaintaining sustainable national products through policies, strategies and goals set by governementProviding better business development through private enterprises and boosting entrepreneurship in terms of...Providing good governance that focuses on fighting corruption, decentralisation and increase in major participatoryFinal ConclusionImpact to ASEAN countriesIt will increase each ASEAN countries global competitiveness since it will be cheap to export and import products and only the best products can be acceptedIt will establish a countrys product identity i.e. Cambodia with its natural resources and other countries with their competitive product as well.

Documents

To a Better Cambodia