ADB 50th Anniversary Essay Competition

Second Best Essay

ADBs Development Impact in Cambodia

and Possible Areas of Future Cooperation

University: Royal University of Phnom Penh

Student Name: Khy Puthirath
 For almost 50 years since the Asian Development Bank (ADB) was established,
Cambodia has received 2.65 billion in loans, grants, and technical assistance (Asian
Development Bank [ADB], 2015). Cambodia has received low interest loans compared to
other commercial banks given the fact that the projects have delivered to Cambodia
immense economic and development benefits. With external guidance especially from ADB
and her own commitment, Cambodia has maintained her momentum with regards to Gross
Domestic Product (GDP) growth at an average 7% for a decade from 2006 to 2015 and is
expected to maintain this pace in 2017 (ADB & Cambodia GDP Annual Growth Rate, 2016).
For that reason, Cambodia which once experienced civil war and conflict, has become one
of the fastest growing economies in Asia, and is moving toward becoming one of the Tiger
economies through the transformation from agriculture to a developed industrialized country
(ADB, 2016). Though Cambodia has enjoyed a high growth rate, the country still suffers from
setbacks, and is in need of some measures to overcome these obstacles to long-term
success. ADB contributes a great deal in this development, specifically in terms of technical
assistance in each and every project in operation. The continuous support from ADB is
compulsory for Cambodias development either socially or economically. Therefore, this
essay is going to illustrate the role of ADB in Cambodia by addressing ADBs contribution to
Cambodias social and economic development, then focusing on the pressing issues and
challenges facing Cambodia, and following with the future direction on which ADB should
target to better support Cambodia.

To begin with, since operating in Cambodia, projects by ADB are categorized into
four main sectors. Through the sectors, ADB has made significant contribution to
Cambodias development by helping to increase GDP per capita, health and sanitation,
education, skills training, and competency and eco-efficiency. First of all, this regional
institution with other relevant government institutions has joined hands and has approved the
projects that focus on the infrastructure sector, which is one of the major barriers to
economic development. ADB offered grants, concessional loans, as well as technical
assistance in paving, rebuilding and rehabilitating the roads in many hard-to-reach areas,
and electricity, and of transport infrastructures in the areas where economic activities are
conducted, as well as constructing a water supply system to facilitate agricultural activities.
As a result, a sustainable road sector and economic growth can be achieved when the
government does not need to spend much financial resource annually on fixing the roads
that would otherwise deteriorate by either human activities or natural disaster based on
ADBs road maintenance unit for post-reconstruction period. This allows local, especially
people in rural areas to gain access to social services and markets more easily, therefore
raises their productivity in the context of inclusive growth. It should be noted that most of
ADBs projects predominantly focus on certain strategic locations such as the Tonle Sap
Basin, and Greater Mekong Sub-region where large populations of Cambodias rural people
live, frequent natural disasters occur, and economic activities take place. In the case of the
Greater Mekong Sub-region Southern Coastal Corridor (GMS-SCC), the 2008 approved
project of key sections stretching from Vietnams fertile Mekong Delta to Thailand was
completed in 2014 has improved peoples livelihood and enabling them to expand their
cross-border business, increasing the local employment rate, and decreasing transport costs
comparing to prior conditions (ADB, 2014). ADB not only improves internal factors for
development, but also strengthens regional linkages with neighboring countries to a large

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extent. Secondly, ADB has granted approximately 60 millions of dollars investing in the
education sector and vocational training (ADB, 2007 & Ministry of Education, Youth and
Sport [MoEYS], N/A). In the education sector, the projects covered all sections of
improvement to achieve a better quality of secondary education composing of three main
pillars, Education System Management and Development, Teacher Professional
Development, and Strengthening Secondary Education (ibid). At the end of the day, the
quality of secondary education has been upgraded to a new level where professional
teachers have been improved in their teaching methods, and competency. Facilities required
for additional learning have been built to assist students with computer-learning, and
laboratory for experiments. The national curriculum standard has been reformed and
introduced to better fit the contemporary education, especially the regional level (Southeast
Asia Department, 2007). Moreover, vocational training has also been expanded and
reformed to include more people, to promote more women, and to target more relevant skills
required in the industrial sector. As a result, there was a 40% increase in employed or self-
employed trainees who had graduated according to a tracer study of a small sample of
Voucher Skills Training Program (VSTP) graduates from the center and enterprise-based
courses (Southeast Asia Department, 2016).

Thirdly, the agriculture and natural management is another of ADBs projects that
focused on sustainable development. ADB provided alternative methods of conducting
economic activities to people whose livelihoods wholly depended on fishing and logging, yet
was destroying the environment at the same time. It arranged for a new way-of-lives
framework to improve people's livelihoods through the construction of transport
infrastructures, irrigation system and management, and providing inputs such as seeds and
grains. Besides providing substitution, ADB also established community-based livelihood
improvement that financially support members to buy agricultural supplies when the price of
inputs soars as well as community-based environment conservation to inhibit all forms of
illegal activities that endanger natural resources and environment at large (Southeast Asia
Department, 2009 & ADB, 2010). As a result, the agricultural products increased 0.28 tons
per hectare (ha) or 11% from 2005 to 2009 (ADB, 2010). Last but not least, public sector
management which was supported by ADB to improve institutional capacity, regulatory
enhancement, and management system standards. It established a monitoring framework to
monitor outcomes and risk of business and investment (Southeast Asia Department, 2008).
Proven that ADB does support the aforementioned target that is concerned by the
government, ADB has satisfactorily made positive and great impact in socio-economic
development in Cambodia.

It is surprisingly undeniable that Cambodia as one of the least developed countries in

ASEAN that has moved a step closer to a low-middle income country, faces multifaceted
issues. According to the Council for the development of Cambodia (2002); Sum, M. (2008);
Heng, P. (2014); & Puy, K. (2016) argued that the two striking issues that hamper
Cambodias long term development are hard and soft infrastructure. Hard infrastructure
refers to the physical infrastructure including transport roads, electricity, and schools. The
majority of roads in Cambodia are considered as rural roads which remain unpaved and in
poor condition. According to Sum M. (2008), almost all rural roads are unpaved at 99.7
percent. This lack of physical infrastructure serves as a major barrier in promoting inclusive

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growth. Because of the poor condition of roads, people have to spend more time to travel
and conduct less economic activities. As a result, the productivity and competitiveness are
limited and local people are unable to expand their business. Moreover, electricity plays a
vital role in attracting foreign investors, and promoting industrialization given the fact that
industry needs a great amount of electricity to operate. However, Cambodia faces an
electricity shortage which is also expensive because of insufficient electricity production. As
a result, Cambodia heavily relies on neighboring countries electricity supply that serves as
the impediment to industrialized transformation. Furthermore, schools also serve as another
impediment to Cambodia human development. The lack of schools in rural areas
discourages children to go to school. They tend to give up and drop out after primary school
because in higher education, the number of schools is getting lesser and the distance of
school is getting farther from their home. As a result, it ends up leaving people in poverty
over generations. And the long term development imposed by the government namely the
industrial policy and Rectangular strategy phase III that promotes human capital and
converts people from low-skilled to higher skill workers would be constrained by the
aforementioned factors. If Cambodia is to transform herself to be the industrialized country,
electricity, roads, and schools have to be pre-conditionally met, well-equipped and ready for
usage. Regarding to the soft infrastructure refers to a decent education system to promoting
human resources. A decent education system is significant for long term growth. However,
reflecting back to education in Cambodia, the system is still limited, and in need of an urgent
policy to tackle. Even though the proportion of population and employment is comparatively
high, the level of skilled workers in Cambodia is still at the low level that it is insufficient to fit
the context of a highly industrialized transformation. Furthermore, the education system in
Cambodia lies also at the bottom and is unable to integrate with the other ASEAN members,
especially Singapore, Malaysia, and Thailand. There has been a significant recent
contribution to the education sector; however, a small piece of reform is not enough. It needs
to target other parts of critical areas as well. These include professional teachers, teaching
methods, education level, and soft skills. Professional teachers are mostly in the capital city,
but limited in rural areas which do not promote inclusive growth at all. The teaching method
is also traditional, which is ineffective if compared to student-based methods. The level of
education is very low if compared to other neighboring countries. There is no vocational
training to equip students with skills after graduation from high school. Among all of these
problem, the Royal Government of Cambodia focuses only on student education quality, and
leaves these root causes behind.

According to ADB, the goals and objectives that ADB is attempting to achieve is
broad and covers various sectors. However, ADB should become more focused and
selective. This notion is also adopted by the Royal Government of Cambodia on its strategic
plan. Due to the fact that ADB funds are limited, therefore to better support the socio-
economic development, ADB should focus on particular sectors that promote Cambodias
long term growth. As was illustrated above, infrastructure and education are the main
sectors that Cambodia is facing difficulties. The infrastructure is the wheels of economic
growth as mentioned by Sum (2008). The more development on infrastructure would trigger
smooth economic transaction between urban and rural areas. While the education system
would be considered as the foundation of Cambodias long term development and
industrialization. It would reduce the development gap compared to other highly developed

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countries in ASEAN. Also, it would play a supportive and facilitating role to become the high
income country in the future. The investment in ADB by government and ADB would
increase human resources and produce high skilled workers to meet the needs of an
industrial country. It is compulsory that education should always be at the frontline like
Japan, Singapore, Malaysia, and Thailand. Therefore, the two sectors should be the focus of
ADB for partnering with Cambodia, so as to promote inclusive and equitable growth.

In conclusion, ADB plays a significant role in supporting Cambodias economic

development, especially in education, infrastructure development, agriculture, sustainable
development, and public management. The continual support of ADB to Cambodia is
compulsory to lift Cambodia out of poverty and support her industrialized policy
transformation. More importantly, the two sectors such as education and infrastructure are
the main concern of government to promote sustainable and long term development.

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 References

ADB. (2010). ADB's Contribution to Development and Poverty Reduction. Cambodia:

Building Solid Physical and Social Infrastructure. (pp. 3-4). The Philippines: ADB.
Retrieved from: www.adb.org/sites/default/files/publication/28763/decb-cam.pdf

ADB. (2014, December 04). Better Roads Give New Life to Southern.
Retrieved from:
http://www.adb.org/results/better-roads-give-new-life-southern-cambodia

Asian Development Bank (ADB). (2015). Cambodia. Asian Development Bank Member
Fact Sheet.
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ADB. (2016). Cambodia. Asian Development Outlook.

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ADB. (2016, May 10). Here Comes Cambodia: Asias New Tiger Economy.
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http://www.adb.org/news/features/here-comes-cambodia-asia-s-new-tiger-economy

Cambodia GDP Annual Growth Rate. (2016). TRADING ECONOMICS.

Retrieved from: http://www.tradingeconomics.com/cambodia/gdp-growth-annual

Council for the Development of Cambodia. (2002). Cambodia Development Challenges.

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Heng, P. (2014). Three keys to unlocking Cambodias growth. East Asia Forum.
Retrieved from:
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Ministry of Education, Youth and Sport (MoEYS). (N/A). Enhancing Education Quality Project.
Retrieved from: http://www.moeys.gov.kh/en/eeqp.html

Puy, K. (2016). Japanese investment in Cambodia rises, but weak infrastructure a

problem. Japantimes.
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incambodia-rises-but-weak-infrastructure-a-problem/#.V8W6o6Jq2qk

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 Southeast Asia Department. (2007). Cambodia: Enhancing Education Quality Project.
Asian Development Bank (ADB).
Retrieved from:
http://www.adb.org/projects/38559-022/main#project-pds [Accessed 2016, August 11]

Sum, M. (2008), Infrastructure Development in Cambodia, in Kumar, N. (ed.),

International Infrastructure Development in East Asia Towards Balanced Regional
Development and Integration, ERIA Research Project Report 2007-2, Chiba: IDE-
JETRO, pp.32-84.
Retrieved from:
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Southeast Asia Department (2008). Promoting Economic Diversification Program

Sub-program 1. ADB.
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Southeast Asia Department (2009). Tonle Sap Poverty Reduction and Smallholder
Development (TSSD). ADB.
Retrieved from: http://www.adb.org/projects/41435-013/main#project-overview

Southeast Asia Department. (2016). Cambodia: Strengthening Technical and

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