Cambodia Poverty Assessment - Feb 2014

Where have all the poor gone?
Cambodia Poverty Assessment
2013
February 20, 2014
Phnom Penh, Cambodia
Carlos Sobrado, Senior Poverty Economist

2
1. Progress on poverty reduction
2. Remaining challenges
3. Policy recommendations
What we will talk about…

3
Official poverty estimates in
Cambodia
o In 1994, poverty in Cambodia was estimated for
the first time
o Several other estimates were developed after
1994, but the results were difficult to compare
o Starting in 2004 the National Institute of
Statistics adopted a more standardized field
work for the Cambodia Socio-Economic Survey

4
And in 2013, with an updated
methodology, poverty was estimated for
each year
53.2%
50.1%
38.8%
23.9%
22.1% 20.5%
18.6%
0%
10%
20%
30%
40%
50%
2004 2005 2006 2007 2008 2009 2010 2011 2012
PovertyRate
p

5
Reductions reported everywhere;
with highest poverty in rural areas
15.8%
2.7%
4.3%
3.8%
39.7%
35.0%
12.7%
9.1%
59.0% 57.9%
27.5%
22.2%
0%
10%
20%
30%
40%
50%
60%
70%
2004 2007 2008 2009 2010 2011 2012
Phnom Penh
Other Urban
Rural
p

6
Methodology
o Measures poverty by comparing per capita
consumption to a poverty line
o The poverty line is the cost of a food basket with
a minimum amount of calories, plus an allowance
for non-food consumption
o Estimates based on 2009 data – applied to all
years
o Based on a sample (not a census)

7
For those households that escaped poverty
… housing conditions improved
33.9%
3.6%
7.1%
52.9%
21.8%
28.8%
0%
10%
20%
30%
40%
50%
60%
2004 2011

8
those escaping poverty
… also acquired more assets
18.9%
2.2%
41.4%
17.1%
54.9%
62.5% 62.7% 63.2%
0%
20%
40%
60%
80%
Motorcycle Mobile phone Television Suitcases
2004 2011

9
In education, net enrollment improved for
every schooling year
0%
20%
40%
60%
80%
1 2 3 4 5 6 1 2 3 4 5 6
Year in primary Year in secondary
%studentsatappropriate
grade
Net enrollment rate by year
2004 Net 2011 Net

10
Gender gap in education decreases and
disappears over time
-1
0
1
2
3
4
5
6
7
8
9
1919
1924
1929
1934
1939
1944
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
Birth year
Female
Male
GAP
School age

11
Cambodia is on target for the under-five-
mortality MDG goal
0
20
40
60
80
100
120
140
160
2000 2005 2010
Poorest
Wealthie
st
Deathsper1,000children

What are the reasons behind this
impressive reduction in poverty?

13
In 2004, a large group were just
below the poverty line
2004
Poor
2011
0%
2%
4%
6%
8%
10%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Population%
Consumption in Per Capita 2009 Phnom Pen
Riels/day (000)
Poverty Line = CR 5,326 in 2009

14
By 2011, they were no longer poor
They moved just above the poverty line
2004
2011
0%
2%
4%
6%
8%
10%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Population%
Consumption in Per Capita 2009 Phnom Pen
Riels/day (000)
Poverty Line = CR 5,326 in 2009 prices
2011
Poor

15
The most important drivers of poverty
reduction were increases in rice prices and
rice production
Increased rice
prices & rice
production account
for 47% of the
poverty reduction
Key drivers of poverty reduction 2004-
2011

16
Pro-poor growth helped reduce poverty
in 2008, 2010, 2011
21
19
21 21 22 23 23
33
37
32 32 30
28 28
0
5
10
15
20
25
30
35
40
2004 2007 2008 2009 2010 2011 2012
Share prosperity (bottom 40%) GINI * 100

17
Other key factors were:
… a liberal, undistorted agriculture
market
For example, from 2004 to 2009
• International rice prices: ↑134%
• Local rice prices in Cambodia: ↑119%

18
… Government policies on
infrastructure

19
o 8,000 village roads helped
farmers get rice to local
markets.
o And the roads were
increasingly used by the
poorest. Poor households
with motorbikes increased
four times
- from 7% to 29%
…and local infrastructure development
funded by communes met local
needs

20
o Poverty decreased from 53.2% (2004) to 20.5%
(2011)
o Reflected in improvements in quality of housing
conditions, assets education and health.
o This reduction in poverty came about because:
o Many poor moved just above the poverty line
o Rice price and production
o Pro-poor growth
o Free rice market price
o RGC investments in rural infrastructure.
Progress in reducing poverty
- in a few words

Despite the impressive
reduction in
poverty, challenges remain...

22
The poor are less but remain
concentrated in rural areas: 9 out of 10
6.8 million poor in
2004
Other
Urban 0.6
Phnom
Penh 0.2
million
Rural 6.2
million
Other Urban
0.2 million
Phnom Penh
0.1 million
Rural 2.7
million
3.0 million poor in
2011

23
There are fewer poor,
but more vulnerable people
4.6
8.1
2004 2011
Near poor people
(million)
Near poor are those living above $1.15 per day
, but below $2.30 per day
6.9
3.0
2004 2011
Poor people
(million)
Poor are those living below $1.15 per day
(poverty line)

24
A small shock can double
poverty
20.5%
41.0%
2011 2011 with shock
Poverty rate
- =

25
Further increases in rice prices are
unlikely,
at least at the same pace

26
Overage in primary is a major problem
and increases dropout rates
Students entering first grade late, limits the
learning potential and increases dropout rates:
o 40% of students are entering first grade at
age 8 (two years later than recommended)
o 40% of students are finishing primary at 15
years old (3.1 years later than
recommended)

27
Enrollment differences between
upper and lower quintiles
0%
20%
40%
60%
80%
100%
1 2 3 4 5 6 7 8
%of15-20yearsoldwith
completedschoolyearin2011
School year completed
Lowest quintile Highest quintile

28
After some progress child malnutrition
rates were relatively unchanged in 2005-
2010
2000 2000
2005
20052010 2010
0%
10%
20%
30%
40%
50%
Stunted Underweight

29
o While HEF is a key instrument to insure access to
health services by the poor, some challenges
remain:
o Increase coverage: 25% poor households do not
have a HEF card
o Increase use: among the poor seeking treatment
in hospitals, 60% do not use the HEF cards
o The poor seek medical advice 55% of the time from
informal providers where diagnosis and treatment
are unreliable.
Under use of Health Equity Funds (HEF)

30
o There are less poor, but more vulnerable
households
o Relatively small shocks could double poverty
rates
o Another spike in rice price unlikely
o Too many overage students
o Low enrollment rates of poor children
Remaining challenges
… In a few words

Possible implications on
policies and programs to
reduce poverty and
vulnerability

32
o For Example through:
o Improved farmers skills by means of formal
education and better extension services
o Improved access to improved seeds
o Promote water user associations
Enhance agriculture profitability
and diversification

33
o Rationalize, connect and maintain
roads and other infrastructure
o More funds for commune-driven
participatory development to better
meet local needs
Continue to improve access to
basic rural infrastructure and services

34
But we also need to look beyond
agriculture
Increase jobs in manufacturing by addressing the 3 key
bottlenecks:
o Reduce electricity cost and increase reliability by
implementing a strategic and competitive roll out plan
with Public-Private-Part.
o Enhance business environment through reduced informal
payments and burdensome regulations
o Reduce high transport costs and unreliable delivery by
implementing a connectivity strategy

35
Investing in education
o Expand early childhood education to promote
entry to Grade 1 at the right age
o Strengthen the quality of schooling in early
grades to reduce repetition in primary
o Provide targeted scholarships and school
feeding in primary and secondary
schools, especially for poor children, to improve
enrollment and reduce drop-out rates.

36
o Expand provision of health equity card
o Increase use of health equity card to encourage
health services at public hospitals
o Tighter control on informal services to improve
medical treatments
Improve access to public health
services

37
Integrated programs to tackle
child malnutrition
o Food fortification and micronutrients
o Improve feeding practice
o Reduce open defecation
o Promote hygiene practices

38
Implement sub-national social accountability policy to
improve performance of local service providers
o Establish systematic citizen/user feedback and
monitoring
o Display performance and budget information for
communes, schools and health centers
Strengthen accountability to
improve service delivery

39
Implement National Social
Protection Strategy
Clarify institutional
responsibilities and
provide support for
agencies implementing
the NSPS
Encourage salaried
workers to enroll in
national security system

40
o Agriculture Extension services, seeds and
participation on infrastructure projects
o Manufacturing Lower electric and transport cost
and reduce informal payments and regulations
o Education Expand early childhood
education, promote enrollment of the poor
Recommendations
In a few words

41
o Health Integrated approach to fight
malnutrition, improved understanding of low HEF
utilization, and strengthen regulation on informal
markets
o Social Protection Increased support to
coordinating agency, greater participation of
salaried workers in national security system
o Increase accountability of all service providers
Recommendations
In a few words

Thank you very much for your
attention
Thank you very much for
your attention

Cambodia Poverty Assessment - Feb 2014

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