Economic AnalysisEssay Preview: Economic AnalysisReport this essayAnalyzing Cambodias growthand development tools and policyDiscuss what Cambodia should and can do to speed up and sustain growth and development.Before the global economic crisis from 1997 to 2008, Cambodia had enjoyed economic growth maybe more than nine percent per, which making the country one of the best performers in the Southeast Asian. This growth through four main sectors: clothing, tourism, construction and agriculture. However, we have to considering how to sustain growth of these main sectors become more productive. The best component for improving and speed up those sectors base on three strategies such as:
First, the government has to increasing public investment in physical infrastructure, such as construction and repair of bridges, roads and irrigation systems to improve connectivity and agricultural productivity, electricity network and clean water supply system, and building and training of Cambodian laborers. This has laid a good foundation to expand growth and ensure sustainable development.
Second, we must expand our sources of growth by finding the partner to create the opportunity of exporting our products in local and international region. Nowadays we already the member of ASEAN, we could promote our domestic product in the ASEAN Member countrys market through strengthening free market policy within the ASEAN region. Stronger than this, we should consider to US and EU market even thought their economic still facing some risks, those are likely to be only temporary. In order to make our product can compete in the international market; Cambodia also needs to develop a processing and packaging industry for its agricultural products, and handicraft products to become standard for get more competitive in the market.
Third, we need to strengthen the implementation of the policy of integrating national economy into regional with active participation in the initiative of all the bilateral, multilateral, regional, and sub-regional cooperation framework. We must welcome investments in all sectors, including banking, insurance, and telecommunications. The Royal Government should establish the law, which allow the investors could own 100 per cent of their business in Cambodia that in most countries 100 per cent foreign ownership is not allowed. For example, the agricultural sector in Cambodia today is unexploited and offers tremendous potential, but without investment our cultivated land remains largely unproductive and idle. Thus, we need to transfer those idle land to productive land.
Fourth, Approximately 80% of Cambodian people are living in the rural areas, and about 70% of total labor force is in the agriculture sector. Agriculture has a high potential for development because of favorable climate and terrain, abundant water and good irrigation. With the use of modern technology and better agricultural techniques such as the use of vehicles, seeds and fertilizers agricultural productivity could be further improved. We have many opportunities to diversify the economic growth base by promoting agricultural development. Agricultural development will also help us effectively address the poverty issue that is ubiquitous in the rural areas of Cambodia, because Agriculture has contributed
The Rural Economies Index (REO) is a composite of the best available indicators of agricultural production capacity. It measures the levels of productivity, food production and household consumption. It has an independent scope from the RSO, meaning that the number of households on the food-chain plays only a small role of the index. A strong correlation is found between the number of households on the food-chain and GDP in each country.
The latest REO results were based on data provided by a consortium of six regions. It was developed from available information from various sources. These are summarized in Table 1 which includes a list of the six regions based on their number of households. According to this information, more than half of the respondents were employed in the agricultural sector, compared to only 6.2% of the other six. Compared to most countries, Cambodia’s rural-industrialization rate rose from 3.64% in 1994 to 3.64% in 2011. During 2011, gross annual purchasing power is up 35%.
Table 1 – Rural Economies Index
(n): GDP (in millions) GDP per capita (in billions) RSO GDP per capita (in btu) PPP Bts RSO per capita GDP per capita (in btu GDP per capita) Gross domestic product per person GDP per capita GDP per capita (in btu) Per capita Gross domestic product per capita % of all working adults (non-working) 5.14% 14.64% 12 7.54% 1.57% (1) Gross domestic product per adult 1,903.0 9,769.5 4,527.4 3,872.6 10 9.25% (6) Gross domestic product per adult 2,056.4 2,828.7 1,638.4 2,743.5 14 9.75% (11) Gross domestic product per adult 2,099.7 2,063.9 1,059.2 1,838.4 14 9.43% (13) Gross domestic product per adult 2,052.9 2,041.4 1,058.1 1,834.5 18 7.54% (5) Gross domestic product per adult 2,020.0 1,892.8 1,850.5 1,973.2 22 7.55% (20) Average total hours worked in the agricultural sector 0.964(b)(2) 6.64 (1.19) 10 1.873(b)(2) 3.43% (11) Annualized hourly wages in the agricultural sector 6.15 (2.54) 7.43 (1.43) 12 7.858 (2.55) 10 7.83 (2.53) 10 7.55% (21) Real monthly income (average household income