Balancing out development

Photo by: Mak Roy
A new Japanese-funded bridge, seen from an early morning ferry, goes up on National Road 6 last year.

via Khmer NZ News Media

Thursday, 01 July 2010 15:00 Nicola Crosta

Cambodia has made strides in sustainable development, but progress will hinge on bridging existing disparities that separate the rural and urban populations

Over the last decade, Cambodia has been successful in achieving sustained economic growth, but this has been narrowly based and continues to be challenged by stark social and territorial disparities. Alongside these challenges, there is enormous unexploited potential for sustainable economic development and diversification across both rural and urban Cambodia. Clearly, many of the key factors influencing the country’s development dynamics – both positive and negative – are localised, and are thus best understood and addressed at the sub-national level. This is one of the main conclusions we reached in the Local Development Outlook: Cambodia, launched on Wednesday by the UN Capital Development Fund in Phnom Penh at the UNCDF/UNDP Local Development Forum.

On the one hand, modest progress towards some of the Millennium Development Goals (MDGs) is concentrated in specific regions and dependent on local circumstances. On the other, Cambodia possesses significant unexploited potential. Notably, some of its strongest assets are localised just where poverty and exclusion is the greatest. For example, despite its strong tourism and construction industries, Siem Reap remains one of the country’s poorest provinces.

In this context, a strong consensus is emerging across both developed and developing countries that a new policy approach is needed – one that builds on local knowledge to tailor public policy to locally specific circumstances. This should allow the provision of public goods when they are needed and where they are needed, in an integrated fashion. This logic is behind recent efforts to use more disaggregated data, such as that gathered in Cambodia through the already existing commune database, to localise the MDGs and attack poverty traps via deliberate, place-based strategies. For instance, in many countries, local MDG “scorecards” are being developed to track progress at the local level and provide input to national and sub-national planning processes. This approach also guides local development strategies that seek to harness endogenous potential and capitalise on opportunities for economic diversification and development. Additionally, this localised approach is increasingly being adopted to drive policy responses to climate change that has significant – and territorially asymmetric – impacts across developing countries.

What does this mean, in practice, for Cambodia? As argued in the Outlook, action is needed on at least two fronts. First and foremost, decentralisation reforms must advance. This will provide the necessary governance infrastructure to empower local actors as agents of change and development. Decentralisation is not just about promoting local democracy and participation; it is also a key tool to promote economic development. Second, policy that clearly outlines a localised approach to development is needed at the national level. This doesn’t mean top-down planning. It means adopting a strategic approach that is sensitive to the different characteristics of different parts of the country. This includes – for instance – developing the government’s capacity to tailor its sectoral policies to the specific context of rural areas, urban areas and cross-border or coastal provinces.

But realising local development potential is not just the responsibility of government. Private sector and financial institutions have a critical role to play to ensure local economic development opportunities are harnessed. Development partners can also do more to make sure their support is strategically targeted where it is needed and in ways that maximise synergies and integration, rather than duplication.

This local perspective may not be the solution to Cambodia’s economic, social and environmental challenges. But it is certainly part of the solution. Anyone who has travelled across Cambodia knows that this is a land of immense opportunities. A future is possible where rural areas thrive and where Cambodian cities act as hubs for development. But for this to happen, efforts need to be localised: Economic growth in Phnom Penh does not automatically translate into development in Ban Lung. In other words, growth is necessary, but it doesn’t necessarily imply balanced, sustainable development. If sustainable development is the objective, key actors need to act collectively, strategically and deliberately towards it.

This will allow all Cambodian regions, and their populations, to participate in national growth and development.

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Nicola Crosta is chief technical advisor to the UN Capital Development Fund, the UN’s investment agency for least developed countries.