ADB 50th Anniversary Essay Competition

Third Best Essay

ADBs Development Impact in Cambodia

and Possible Areas of Future Cooperation

University: University of Puthisastra

Student Name: Thun Sophorn
 Nowadays the world views Asia and the Pacific region as one of the most potential
regions especially given the huge population and work force that are key factors for boosting
economic growth. Yet work forces lack essential catalysts for advancement such as
sufficient infrastructure, access to health care services and education, etc. To fill this big gap
with the ambition to enhance the region's productivity and effective resource utilities, the
demand for more investment is needed. Unfortunately, there is a tremendous need for
increased budgets to reach this ambition. This led to the creation of the Asian Development
Bank (ADB) which is a regional financial institution that provides loans with lower interest
rates, technical assistance and grants to its Developing Member Countries (DMCs)
cooperating with the authorities to cope with development issues' challenges and to fight
against poverty. Among its member countries, Cambodia has received a lot of financial and
technical assistance and has gained many benefits from the active partnership in various
development projects in almost all important sectors with ADB. Even though there has been
great achievements so far, some development issues are still in strong need of new creative
projects and investments from ADB to ensure that this country is on the right pathway toward
sustainable development which is also the new set goals of the United Nations Development
Program for the world, Sustainable Development Goals SDGs. This means that Cambodia
needs to continue its partnership with ADB for future prosperity and consistent growth.

This year marks the fiftieth anniversary of the Asian Development Bank (ADB) since
its first official establishment in 1966 and the fiftieth year of smooth collaboration with
Cambodia. During these fifty years, ADB has assisted Cambodia a lot in terms of improving
people's living standards by encouraging the sustainable utilization of the country's
remaining resources through ADB's main focus on inclusive economic growth, environmentally
sustainable growth and regional integration. According to the ADB member factsheet
released in 2015, Cambodia has received 2.65 billion dollars in total including loans, grants,
and technical assistance since 1966. With this large amount of money and assistance,
Cambodia's socio-economic development has been rapidly upgraded by two aspects of
investment from ADB. Firstly, ADB focused on the present needs of growth factors in
Cambodia as these growth factors could possibly boost economic advancement. Developing
countries always face the problems of insufficient infrastructure which impacts access to
trade, daily transportation and social services. Some opportunities have therefore been lost.
Fortunately, with the financing from ADB, more roads, bridges, electricity, modern and new
fixed-irrigation systems, and water supply has been enlarged for broader access to people's
present needs and, at the same time, making it much easier for economic transactions to
take place among residents from all parts of Cambodia, increasing connectivity between
rural and urban people. Besides the infrastructure sector, ADB strongly encouraged and had
projects working on wastewater and solid waste management as well as sanitation, public
service management, private and financial sector reform, agriculture as well as industry and
trade which all require technical assistance and increased budgets. By implementing many
projects in these sectors, ADB has enhanced the human resources and living standards. For
instance, a healthy person who can get access to various social and public services has
more opportunity to produce more and contribute even more to the economy. Secondly,
ADB also simultaneously focused on the future needs of development factors. These long-
term development factors can contribute to Cambodia's future sustainability and optimized
benefits because if the investment is put now on those long term catalysts, later in the

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coming years, they will actually produce the fruitful results. Those factors include education,
management of agriculture and natural resources, technical and vocational education and
natural disaster management. To contribute to these factors, ADB has focused on secondary
school students' access to new facilities, teacher training, and sustainable natural resource
management. Moreover, the gender issue is also taken into the development agenda. ADB
motivated women to take part in economic activities by providing them leadership skills,
market information and education. As we can see, so far ADB has done many projects
supporting Cambodia's economic and socio development focusing on present and future
needs of growth factors and development which contributes a lot to Cambodia and other
trade partner countries.

Even though the growth and prosperity have been rising rapidly, developing countries
like Cambodia are still in great need of more effective investment in its core sectors so that
Cambodia not only obtains the rising GDP but also becomes the country that supports
integrated development. Moreover Cambodia still faces some daunting development issues
as we can see the extreme poverty and increasing income inequality between the poor and
the rich still remain. In my point of view, there are three pressing development issues that
should be taken into consideration. Firstly, Cambodia has a shortage of skilled labor in
addition to a problem of worker migration to neighboring countries. According to Cambodia
Socio-Economic Survey 2014, the youth (aged 15-30) labor force participation rate is about
77%. Indeed, this country has a large number of potential working age youths but they
mostly don't have adequate skills and abilities to fulfill the job market's requirement of higher
skills. The root cause of this shortage comes from the low level of education since those
young people are motivated to drop out or not attending school in order to help their families'
poor condition while some other external factors also affect them such as the long distance
of the school, poverty and the problem of not being able to find jobs after they finish their
education. Skilled labor plays an essential role in a highly productive market especially for
developing countries. Without these high skilled workers, we can't attract foreign investors
specifically for the industries that need high skilled labor to do the technical work. On the
other hand, Cambodia is now facing the large number of young workers temporarily leaving
the country for work in other destinations such as Thailand, Malaysia, and Korea, which they
believe that they would earn much more than in Cambodia. Although those workers can
remit some money to help their families in the country which is an economic gain, on the
other hand, Cambodia loses labor which is precious inputs of production and growth in this
country. Secondly, poverty and income inequality are also serious development issues that
government and relevant parties have to focus on because these two variables could
possibly make the development process worse since they're the main barriers of inclusive
economic progress. Although the poverty rate has been falling tremendously from 50% to
20% since 2007, but 70% of them live under daily incomes of 3 dollars which means people
are very vulnerable and could easily fall back into poverty in the near future. No wonder that
poverty and income inequality are the results of poor people's weaker access to social
services and natural assets and lack of efficient social policy for poor families. Thirdly, weak
governance is another daunting issue for Cambodia's future growth. No matter how much
money one country gets, the lack of transparency and accountability, the long process of
regulatory procedure for business will hinder the development growth rate. In Cambodias
case, governance is not good, nor transparent and accountable enough to serve the citizens

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especially with regards to business creation and operation which in turn will make
development harder. Among those irregularities, corruption is recognized as the main cause
of ineffective mechanism. For instance, if there is any corruption in the Land Concession
process, companies will be provided opportunities for illegal logging, grabbing local
community's lands and crops leading to natural resource destruction which will inevitably
affect the next generation. Not only this, natural resource destruction and deforestation can
cause serious trouble to people relying mostly on the forest and natural resources for their
livelihoods. As mentioned above, Cambodia's pressing development issues are skilled labor
shortage and immigration, poverty and income inequality and weak governance. These
constraints can easily hinder the development process of Cambodia.

It is clearly shown that critical development issues become the biggest enemy of the
development process. So to deal with this, ADB should address these critical issues to policy
makers, non-governmental organizations and civil society leaders working on development
issues, all relevant sides especially grassroots citizens and then together we strive forward
to a pathway of new progress with pride. Addressing critical development issues can only be
done with the cooperation of ADB, working closely with all of the above mentioned parties
and conducting rigorous research. ADB has done very well in integrating the government's
National Strategic Plan and its own development initiatives. However, conducting research
on those concerns is still very limited. By doing research, it enables ADB and other partners
to investigate the real root causes of those problems and identifying the affected people
correctly followed by the positive impact to newly adjusted policies. With collaboration from
various institutions working on development, ADB can learn from them and share with them
those issues leading to new creative approaches in dealing with growth barriers with the
purpose of making Cambodia better off in the near future and at the same time ADB can
consult with all partners to upgrade the development projects. On the other hand, to better
support Cambodia going forward, it's very vital that ADB continues its partnership to provide
loans, grants and technical assistance to this tiny yet potential developing country. Besides
investing in physical infrastructure such as roads, bridges, irrigation systems for agriculture,
ADB should also encourage and conduct more projects that trigger Cambodia to invest more
in some sectors such as higher quality of education including vocational training to young
people, making pro-poor policies which enable them to get access to social services and
natural resources, making sure that the disparity between the poor and the rich is reduced,
improving regulatory procedure, accountability and transparency in governance that they all
play the most crucial parts in solving critical development issues.

In conclusion, ADB is not just a regional bank assisting with financial matters but it is
also a prominent partner working towards sustainable development with a vision and
strategy to improve Cambodia. The evidence of ADB's great achievements towards contributing
to Cambodia's socio-economic development is shown clearly through the higher living
standards of the people in key targeted areas and by its efforts and active projects with all
stakeholders since Cambodia became a member in 1966. Without ADB's loans, grants and
technical assistance, Cambodia would find it harder to handle all of the issues faced alone.
Despite these fruitful results, Cambodia's pressing issues remain a big concern to its future
growth such as low skilled workers, work related migration which allows a great number of
human capital going to foreign countries, extreme poverty and income inequality, natural

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resource loss as well as weak governance. To address these pressing concerns of development
and better support for Cambodia going forward, ADB should continue its good work and
investment in Cambodia by doing research before taking actions to find the most critical
issues needed to address and conducting more effective projects and collaborating closely
with all stakeholders to ensure the inclusive and integrated development not just for the rich
but for all parts of society. Some sectors that need more attention are education, pro-poor
policies, sustainable natural resource management and good governance while other
investment in infrastructure should also continue.

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 References

ADB Member Fact Sheet 2015 (Cambodia)

ADB Country Partnership Strategy (2014-2018)

ADB 2015 Annual Report: Scaling Up to Meet New Development Challenges

Cambodias Rectangular Strategic Plan (2014-2018)

www.adb.org

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