The Fruits of Cambodian Growth
Winners and Losers in a Newly Capitalist Society
Economic growth in Cambodia has been notable in recent years, but there are suggestions that thefruits of growth are inequitably distributed. Should we care?
Cambodia has benefited from rapid economic growth over the last decade or so, which is helping to bring about wealth for at least some of the long-suffering Cambodian citizens. It was the great Austrian economist Joseph Schumpeter who observed that capitalism depends on creative destruction. There is a constant tearing down of existing structures and mechanisms which are then replaced by others better suited to the present environment. Inevitably, there will be winners and losers in this process. For example, while the top fifth of earners have seen their incomes rise by 45% over the last decade, the bottom fifth have seen an increase of just 8%. Cambodia’s economic development, according to a report by the British-based campaigning group Global Witness, has enormously benefited people connected with the long-standing prime minister Hun Sen. This is being strenuously denied by the Cambodian government and media reporters are not being encouraged to pursue this line of investigation.
Cambodia’s economic growth has been fueled by the opening of the economy to international influences and the discovery of oil and gas under the seas off the coast. Small but quite productive garment factories have offered an important source of exports which have continued to be valuable despite more intensive competition from Vietnam and China and less welcoming overseas markets. However, a great deal of the new wealth has derived from large-scale agricultural and development projects which have resulted from government-led changes in designation of land use. There have been a number of allegations that these projects have involved forcible removals of peasants from their homes. These land grabs, if they have occurred, partly explain why Cambodia now has one of the highest levels of inequality in terms of land-holding and landlessness in the whole of Asia. This situation is thrown into ever starker relief when it is remembered that the 1989 land reforms, for which Hun Sen has received high praise, provided the country with a fairly equitable society. Of course, it is the poor and the vulnerable who have come off worse in this process, as has always been the case.
There is always the argument that ‘a rising tide lifts all ships’ and, consequently, it is pointless and perhaps counter-productive to question the division of the proceeds of economic growth. However, research shows that when there is inequality in society, any society, then those at the bottom of the pyramid suffer from stress when confronted by their relative poverty and this stress is translated into illness and early deaths, in addition to higher crime levels.
