To A Better Cambodia

To a Better Cambodia
Framework
Input
Process
Output
Control and Evaluation
Input
4 factors of endowment
Current condition of Cambodia
Political and economic system in Cambodia
ASEAN 2020 agreement
Cambodias position in ASEAN
4 factors endowment
Labour
Capital
Land
Entrepreneurs
4 factors endowment
Labour

Cambodia is composed with
more people from 10 to 24 years
old
4 factors endowment
Labour

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

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

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 endowment
Labour
Most 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 endowment
Labour
It 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 endowment
Labour
Moreover, even in Industry and
Service sectors, the workers are
mostly only primary school
graduates
4 factors endowment
Capital
Number 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
4 factors endowment
Capital
The 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 Europe
4 factors endowment
Land
The area used for
Agriculture in Cambodia is
increasing to be 32.04 %
4 factors endowment
Land
However, 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.
4 factors endowment
Land
Although 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.
4 factors endowment
Entrepreneurs
Cambodia 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 whole
4 factors endowment
Entrepreneurs

Cambodian prefer to be an entrepreneur and women entrepreneurship
is highly promoted among young women.
Factor Abundance
1. Natural Resources esp. Fishery
2. Diverse Mineral Deposits
3. Forest products
National Resources (esp. Fishery)
Approximately three-quarters of the population are directly engaged in
agriculture and depend upon the land for their daily subsistence
Agriculture and forestry contribute nearly 32 percent of 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 GDP
More than 6 million people (45% of its population) work full time on
fisheries and fisheries related industry
Diverse Mineral deposits
But still underdeveloped
Forest Products
58.1% of the Nations land are covered
with forest
Forestry
Very diversed forest products
Problems:
1. 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.
2. Degradation of forests and lost biodiversities due to various aspects of illegal logging, land clearing and
hunting of endangered/rare species
3. Scarcity of water for domestic uses (especially drinking water) and for irrigations are experienced by large
numbers of Cambodians, especially in rural and remote area.
4. 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 development
5. Sustain 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 institutions
6. Gender issues are found in both and public sectors.
7. Cambodian children and youth remain unequal in their opportunity to receive quality education
8. Corruption
Current Condition of Cambodia
From the problems occur in Cambodia, it can be said that the factors
of Lackness in Cambodia are:
1. Managerial skill to manage its resources
2. Low Human Capital to exercise Nations resources
3. Poor governance and infrastructure
ASEAN 2020
Key characteristics :
1. A single market and production base
2. Highly competitive economic region
3. A region of equitable economic development
4. A region fully integrated into global economy
ASEAN 2020
Key measurement of Four Characteristics :
1. Skilled Labor/ Human Capital
2. Strong National Products
3. Good Infrastructure to possess well-flow trade
4. A competitive nations with attractive Business environment

Cambodia and the rest of ASEAN
countries
Human development Index
Cambodia ithe second
lowest in terms of HDI
and it is below the
average ASEAN countries
countries
Education (literacy level)
Meaning : Cambodia is
one of the lowest in term
of literacy level, and
there is unequality
between Male and
Female
countries
Nations products
Cambodia has more
natural resources that
can be exported
compare to Singapore
Philipines and Brunei
countries
Nations 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 nations
countries
GNI Per capita
So, it impacts to the Cambodias
GNI which is the second lowest
among ASEAN nations
countries
Easeness 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
business
countries
Easeness of doing business
Recent Private
business cannot
improve since there
are many
constraints in doing
business and one of
them is due to
corruption
countries
Global Competitiveness Index Rank(among 148 countries in the world)
Singapore : 2nd
Malaysia : 24th
Brunei : 26th
Thailand : 37th
Indonesia : 38th
Philipines : 58th
Vietnam : 70th
Lao PDR : 81st
Cambodia : 88th
Myanmar: 139th
As a result : Cambodia is
the lowest and
considered as the least
competitive country
among ASEAN nations
countries
Logistic performance Index
countries
Conclusion:
1. 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 countries
2. Cambodia can be a loser due to its unreadiness to face AEC since
Cambodia cannot compete with other ASEAN countries.
3. 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

Process
Government Goals and Visions
Government Policies and Actions
Good Governance for sustainable development
Adam Smith Theory

Governments Goals
Governments Goals to overcome problems and to bring Cambodia
sustainable development:
1. Peoples wellbeing and social development (social objective)
2. Sustainability of national resources and environment
(Environmental objective)
3. Sustainable economic sector and infrastructure (economic
objective)
Governement Goals
Pursuing full integration on
three objectives in Local,
National and Global Level
Although full integration
sometimes cannot be
applies, partial integration
is considered as an
achievement
Governement Vision
Governments long term vision to 2030 :
1. 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.
2. 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 Actions
For well education
Education 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

For well education
Target and objectives
Objectives : Achieve Universal NineYear Basic Education, Give Student
Access to University Studies, Integrate Sustainable Development Issues
in the School Curriculum and Increase Public Awareness on Sustainable
Development issues.

Sustainable Transportation
Sustainable Transportation will include : Rural road Strategy, Railway
Transport Strategy, Governement Rectangular Strategy, Law on Land
traffic

Objectives :
1. Improve the road Network of Cambodia
2. Ensure a sustainable transportation system with safe, efficient,
affordable, and evironmentally firendly modes of transportation
covering the whole country

Sustainable National Products
Sustainable 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.
Land 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.
Land Use and Agriculture Objectives :
1. Secure land tenure for the rural poor
2. Increase thr productivity of the agriculture sector and other income
generating activities in rural area
3. Ensure the use of sustainable agriculture practices
4. Ensure sustainable land use planning in all provinces

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

Sustainable Business Development Objective :
1. Promote private sector and financial sector reform
2. Promote sustainable business development

Good Governance for Sustainable
Development
Three reform areas for good governance in Cambodia are:
1. Fighting corruption
2. Decentralization and Deconcentration
3. Participation by major group

Development
Fighting Corruption
A 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 :
1. Enforcement
2. Prevention
3. Public/private support and education

Development
Decentralization and Deconcentration
It means to strenghten grass root level of democracy as well as building
and strenghtening local management capacity and providing a
reasonable level of financial resources
It can be achieved through:
1. Identification and prioritisation of local needs at local level.
2. Fulfilling their local needs using tax sharing and ownership of
revenues generated through local level taxes
Development
Participation by major Groups
To achieve sustainable development, all groups must be giving their best to
assist and support in monitoring and evaluation
Therefore, Government should :
1. Encourage and facilitate for the operation of NGO and civil society
2. Develop a forum(s) and lines of communication to facilitate private
sector and general public consultations with governement in a
meaningful manner
3. Ensure that Government is transparent in its policy, management and
actions
4. Actively promote the awareness and implementation of the sustainable
development nationwide
Adam Smiths theory
In 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 happening
Adam Smiths theory
In 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 theory
ASEAN 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 theory
Then, 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 theory
Cambodias Specialisation
Since 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 2012
Adam Smiths theory
Cambodias Techonology
Adam Smiths theory
Cambodias Techonology
Outcome
Creating competitive advantage of Cambodia
Increase productivity and sustainable development
Wealth creation
Cambodias competitive advantage
Cambodias competitive advantage is
Labour 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
Cambodias comparative advantage
Cambodias comparative advantage is
Strong 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.

Cambodias productivity
Cambodia is still facing major challenges,
such as low labor 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 productivity
However, due to governement policies and action, labour productivity in
Cambodia itself has increased with an average 4.9% annual growth
Cambodias GINI INDEX
Gini 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 : 36.0
control

For well education

Target :
1. Ensure that by 2010, all children complete primary school, and nine year basic
schooling in year 2015
2. Eliminate , by year 2010, gender disparity in nine year basic education
3. Give, by year 2020, a substantial part of the student access to university level
studies
4. Integrate, by year2010, sustainable development issues in the school
curriculum on various level
5. Carry out, by 2010, a communication program on sustainable development in
order to raise the public awareness on Sustainable Development
Target :
1. Achieve, by 2010, upgrading of 4,100 km of primary and secondary
roads and repair and maintain other main roads
2. Achieve, by 2012, upgrading of the main seaport and Phnom Penh
port, two main railroad lines, and inland waterways particulary the
Mekong and Tonle Sap Rivers
3. Achieve, by 2020, a transportation system which is based on
environmentally friendly modes of transportation, vehicles and
fuels

Agriculture Targets:
1. Achieve, by 2015, Secure land tenure for the rural poor in the country
2. Achieve 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
area
3. Achieve, by 2015, sustainable agriculture practices in 20% of the
agriculture land
4. Achieve, by 2015, a sustainable land use planning in 50% of the provinces

Forestry 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
community
2. Achieve, by 2015, Protected areas and national parks, cover 3.3
million hectares, and each area with plan for a conservation
management
Fishery Targets:
1. Achieve, by 2010, access to fishery resources for the poor through a
fishery reform policy
2. Achieve, by 2015, the use of sustainable fishery practices in 70% of
the fishing waters of the country
Mining 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
conventions
Sustainable Business Development targert:
1. Achieve, by 2015, a significant increase of private entreprises in
Cambodia contributing to reduction of poverty in the country
1. Achieve, by 2015, a significant increase of financial institutions and
instruments in the market for private sector development
2. Achieve, by 2020, a significant proportion of private enterprises
carrying out their business operations in accordance with
sustainable business principles and criteria

Final Conclusion
Creating 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 :
1. Creating the best products of National resources that are agriculture,
Fishery, Forestry, and Mining (product quality and GDP)
2. 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)
3. 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 Conclusion
In order to achive that, Cambodia tries to fit and fix its internal matters
which include:
1. Elevating Human Capital through well education development
2. Creating sustainable infrastructure that connects citizens and resources
across the nations
3. Maintaining sustainable national products through policies, strategies
and goals set by governement
4. Providing better business development through private enterprises and
boosting entrepreneurship in terms of...
5. Providing good governance that focuses on fighting corruption,
decentralisation and increase in major participatory
Final Conclusion
Impact to ASEAN countries
1. It will increase each ASEAN countries global competitiveness since
it will be cheap to export and import products and only the best
products can be accepted
2. It will establish a countrys product identity i.e. Cambodia with its
natural resources and other countries with their competitive
product as well.

To A Better Cambodia

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