Halving Poverty by 2015? by Poverty Halving 35213-KH No. Report Cambodia Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank World Document of the Region Asia and the Pacific East February 7, 2006 Assessment 2006 Poverty 2015? by Halving Poverty Cambodia Report No. 35213-KH Abbreviations and acronyms ACLEDA Association of Cambodian Local EMIS Education Management Information Economic Development Agencies System AFSC American Friends Service Committee EPI Expanded Program of Immunization ASEAN Association of South-East Asian Nations ESSP Education Sector Strategic Plan ATC Agreement on Textiles and Clothing EU European Union BAT British-American Tobacco EWMI East-West Management Institute CIS Commune / Sangkat FDI Foreign Direct Investment CAS 1) Country Assistance Strategy GDCC Government-Donor Coordination 2) Centre for Advanced Studies Committee CCA (UN) Common Country Assessment GDP Gross Domestic Product ccc Cooperation Committee for Cambodia GNI Gross National Income CCLS Cambodia Child Labor Survey (2001) GSP Generalized System of Preferences CDC Council for the Development of HSSP Health Sector Strategic Plan Cambodia IDRC International Development Research CDHS Cambodia Demographic and Health Centre Survey IFAPER Integrated Fiduciary Assessment and CDRI Cambodian Development Resource Public Expenditure Review Institute IF1 International Financial Institute CE Christian Era ILO International Labor Organization CEDAW Convention on the Elimination of all IMR Infant mortality rate forms of Discrimination Against Women JFF'R Japan Fund for Poverty Reduction CEO Chief Executive Officer KR Khmer Rouge CG Consultative Group LEB Life expectancy at birth CIPS Cambodia Inter-Censal Population M&E Monitoring and Evaluation Survey MAFF Ministry of Agriculture, Forestry and Child Labor Survey (or Cambodia Child CLS Fisheries Labor Survey) MBPI Merit-based pay initiative CMDG Cambodian Millennium Development MCH Mother and Child Health Goals Millennium Development Goals CoM Council of Ministers MDG Ministry of Economy and Finance CPR 1) Common Property Resources; MEF 2) Contraceptive Prevalence Rate MFA Multi-Fiber Arrangement CPUE Catch per unit of effort MFN Most Favored Nation CSD Center for Social Development MMR Maternal mortality rate CSES Cambodia Socio-Economic Survey MOEYS Ministry of Education, Youth and Sport cso Civil Society Organization MOH Ministry of Health CSR Corporate Social Responsibility MOI Ministry of Interior DAC Development Assistance Committee MOP Ministry of Planning DALYS Disability-Adjusted Life Years MOPS Moving out of poverty study DFID Department for International MOT Ministry of Tourism Development MOWA Ministry of Women's Affairs DHS Demographic and Health Survey (or MOWRAh4 Ministry of Water Resources and CDHS) Meteorology DK Democratic Kampuchea MPA Minimum Package of Activities DPSIC Department of Planning, Statistics and MRD Ministry of Rural Development International Cooperation MTEF Medium-Term Expenditure Framework DPT Diphtheria, Pertussis and Tetanus NB C National Bank of Cambodia EC European Community NCD Non-communicable diseases EF Equity Fund NGO Non-Governmental Organization EFA Education For All NIS National Institute of Statistics EIC Economic Institute of Cambodia NPRS National Poverty Reduction Strategy PSU Primary Sampling Unit NSDP National Strategic Development Plan RGC Royal Government of Cambodia NTFP Non-Timber Forest Product SARS Severe Acute Respiratory Syndrome O&M Operations and Maintenance SESC Socio-Economic Survey of Cambodia ODA Official Development Assistance SME Small and Medium Enterprises OECD Organization for Economic Cooperation SMP Statistical Master Plan and Development SWAP Sector-Wide Approach OOPS Out-of-pocket spending SWIM Sector-Wide Management p.a. per annum TA Technical Assistance p.c. per capita TCM Textile and Clothing Machinery PAP Priority Action Plan TWG Technical Working Group PETS Public Expenditure Tracking Survey TWG-PPR Technical Working Group-Planning and PFM Public Financial Management Poverty Reduction PFMRP PFM Reform Program USMR Under-five mortality rate PIP Priority Investment Plan UNDAF United Nations Development Assistance PPA Participatory Poverty Assessment Framework United Nations Transitional Authority in PRK People's Republic of Kampuchea (1979- UNTAC 1989) Cambodia PRS Poverty Reduction Strategy PRSP Poverty Reduction Strategy Paper Acknowledgements This report has received valuable guidance from Dr. Aun Porn Moniroth (Chairman of SNEC and Secretary of State of the Ministry of Economy and Finance), Dr. Hang Chuon Naron (Secretary General of the Ministry of Economy and Finance), H.E. Vongsey Vissoth (Deputy Secretary General of the Ministry of Economy and Finance), H.E. Chan Tong Yves (Secretary of State of the Ministry of Agriculture, Forestry and Fishery), H.E. Sok Chenda (Secretary General of the CDC), H.E. Chhieng Yanara (Deputy Secretary General of the CDC), Heang Siekly (Deputy Director General, Ministry of Planning), Ly Sina (Division Director, Department of Forestry, Ministry of Agriculture, Foretry and Fisheries), Nhean Sochetra (Director of Gender Equality Department, Ministry of Women’s Affairs), Chhuon Chham (Deputy Secretary-General, Council for Administrative Reform) and Uch Sarom (Consultant, Ministry of Women’s Affairs / UNDP). Earlier drafts were peer-reviewed by Louise Cord and Kathy Lindert (both World Bank), Shyam Bajpai (ADB), Hong Sokheang (UNDP), Helen Appleton (DFID), Sok Hach and Lim Visa1 (EIC), and Brett Ballard and Larry Strange (CDRI). We gratefully acknowledge inputs and contributions including suggestions from Yusuf Ahmad, Enrique Aldaz-Carroll, Anne Christensen, Elisabet Dahlberg (Stockholm School of Economics), Dourng Kakada (EIC), Ignas Dummer (Danida), Eiichiro Hayashi (JBIC), John McAndrew (ADI), Tomoki Fujii, the staff of UNFPA, Didier Grebert (AFD), Roger Hencke (CAS), Jolanda Jonkhart (EC), Long Piseth (Danida), Caroline McCausland (Concern Worldwide), Roneen Marcoux (NEP), Karla Quizon (IFC / MPDF), Neak Samsen (EIC), John Nelmes (IMF), Nou Keosothea (EIC), Michael Stephen (Mekong Bank), Thomas Markussen, Vijay Rao (WHO), Mao Moni Ratana (ADB), Ram Saravanamuttu (WFP), Sofia Sebastian, Carol Stickler (CCC), Emi Uchida, Hirotsugu Uchida and Cheryl Urashima. The report was prepared under the overall coordination and guidance of Indermit Gill, Sector Manager, and Nisha Agrawal, Country Manager. The Executive Summary was written by Tim Conway and Chorching Goh; Chapter 1 by Tim Conway; Chapters 2 and 3 by Chorching Goh; Chapter 4 by Eric Sidgwick; Chapter 5 by Chorching Goh with Chris Jackson (Rural Development) and Chan Sophal; and Chapter 6 by Tim Conway and Toomas Palu (Human Development) with Andy Ragatz (Consultant); Chapter 7 by Tim Conway; and Chapter 8 by Tim Conway and Mia Hyun. The data annexes were prepared by Chea Huot. Inputs were provided by many others in the World Bank team, including Daniel Adler (SD), Beng Simeth (HD), Luis Benveniste (HD), Amitava Biswas (Consultant), Ximena del Carpio (HD), Klaus Deininger (DEC), Gershon Feder (DEC), Mona Haddad (PREM), Minna Hahn (HD), Huot Chea (PREM), Stephen Mink (RD), Nil Vanna (Social Development), Steven Noakes (Consult,ant), Nat Pinnoi (EAS), Steven Schonberger (RD), Dean Spinanger (Consultant), and Rob Taliercio (PREM). Overall guidance was also provided by Ian Porter (Country Director, Cambodia) and Kazi Mahbub-Al-Matin (Lead Economist, Cambodia). The 2004 national poverty estimates on which this report draws heavily were prepared by Jim Knowles (Consultant), in a technical report which will be published separately. Bou Saroeun (Communication Specialist) coordinated the editing and production of the Khmer version of the Report. Assistance on the preparation of the report was also provided by Iv Ek Nimnuon and Zelena Jagdeo. The key sources of data for this report were the Cambodia Socio-Economic Survey (CSES) 2004, conducted by the National Institute of Statistics (NIS); the Moving Out of Poverty Study (MOPS) and Tonle Sap Participatory Poverty Assessment (PPA), both conducted by the Cambodian Development Resource Institute (CDRI); and four District-level case studies of local differences in growth and poverty reduction, conducted by the Economic Institute of Cambodia (EIC). The CDRI MOPS study and the EIC District-level economic appraisals were both commissioned by the World Bank as inputs to this Poverty Assessment. It is intended that both will be published by their respective institutions as separate research papers in 2006. The CDRI Tonle Sap PPA was commissioned by ADB: our thanks go to both CDRI and ADB for permission to use early findings from this study in this report. TABLE OF CONTENTS EXECUTIVE SUMMARY Overview .............................................................................................................. i Structure and sources ........................................................................................... ...ii Key facts ............................................................................................................. 111 Diagnosis ............................................................................................................ vi Binding constraints ............................................................................................... x Talung stock and looking forward .................................................................... xiii Policy priorities .................................................................................................