Working Paper 3:
Economic Reform, Structural Adjustment and Development in Cambodia
K. P. Kannan (January 1997)
Working Paper 3 in English, 42 pp. 
Working Paper 3 in Khmer, 49 pp.
(out of prit, photocopies may be ordered)

Abstract

This paper deals with the nature, content and implications of the Structural Adjustment Programme under implementation in Cambodia as a result of an agreement between the government of Cambodia and the International Monetary Fund/World Bank. The discussion is set in the context of the legacy of war and devastation during the 1970s and 1980s on the one hand, and the imperatives of long-term development of a poor agrarian economy on the other. The paper recognises Cambodia’s historic opportunity to break away from a one-sided economic and political dependence. While the programmes of stabilisation and adjustment could be considered successful compared to similarly-placed economies, these are limited only to such macro-economic indicators as the budget deficit, inflation and the exchange rate. The crucial role of external assistance in such short-term stabilisation needs to be emphasised. However, the paper argues that the content of adjustment should be judged by its impact on the large majority of poor people. It cautions against an uncritical acceptance of the power of the market dominated by a private sector in addressing economic problems, let alone the long-term developmental problems, of Cambodia. On the contrary, the paper cites evidence of growing inequality between urban and rural areas and between richer and poor sections of the population. While encouraging the market to operate in areas where it can perform better than the public sector, the paper argues for a new role for the state in terms of regulating the course of economic development as well as mobilising resources for investment in social and economic infrastructure. Experiences of selected Asian countries are cited to convey the point that both state and market have their respective roles to play in economic development.

Contents
(excluding appendices and bibliographies)

Introduction
Background
Economic reforms before the political transition
Political democracy and objectives of economic development: the national programme to rehabilitate and develop Cambodia
SAP: its context and content
An assessment of macro-economic performance in the context of economic reforms and SAP
Issues arising from economic reform and structural adjustment
Women: vulnerable yet valuable
Implications of SAP and the economic reform process
Lessons from other countries
Concluding remarks

Order working papers.