The Phillippines Rising Bioethanol Industry

The rapid growth of Philippines’s economy has led to an increase in demand for energy which has raised concerns in the country about the national energy security. Philippines imported 100 million barrels of oil in 2004 which satisfies 36.6 percent of its energy requirements. It is expected that the oil import requirements of the country would reach 120 million barrels in 2013. Annually, the country needs approximately 500 million liters of ethanol for the production, which means the country requires 25 ethanol plants to produce annual output of 20 million litres. The country’s first ethanol plant with that production capacity, San Carlos Bioenergy Inc., was built in San Carlos city. Given to the energy security concerns of the nation, the replacement of oil by using bioethanol as a fuel has significantly increased and hence the expansion of agricultural production on arable land is needed. 

The Biofuels Act in the Philippines was adopted in 2007. The main thrusts of the law intend to reduce importing fossil fuels with its erratic price fluctuations by providing a local supply of alternative and renewable energy, reduce greenhouse gas emissions, and cut the carbon dioxide emissions believing to cause the global warming. Therefore, the Department of Agriculture was assigned to promote the cultivation of biofuel feedstock and to balance the food and fuel requirements. 

Increasing energy efficiency and developing sustainable energy sources are the key approaches to address the climate change. The biofuels emerged as an alternative to fossil fuels to promote as a cleaner source of energy. However, the biofuels productions have also triggered controversy for soaring the prices of food. Therefore, the key issue raises in this case is an increase in food prices. This means that an increase in the demand for feedstock to produce bioethanol would bring about a large increase in the prices of agricultural products (CBO, 2009). The World Bank has found that 75 percent of an increase in price was due to biofuels (Stefan, 2008). The biofuel crops would need thousands of hectares of arable land and hence will reduce cropping foods and cause the food shortages. The effects transforming crops into biofuels are catastrophic (FAO, 2008).

Two alternative options are recommended to ease an increase pressure on food prices. The Philippines’s government should firstly restricting on bioethanol process products exports, and secondly, encouraging further expansion of biofuel industry in the country.

Firstly, to ease an increasing pressure on food prices, the government should reduce necessary exported bioethanol processed products. This means that if there is a lack of bioethanol processed resources, it would push the prices up. The feedstock prices would increase and hence the food prices would also increase (Huanguang et al., 2008). The country requires adequate bioethanol resources to produce as planned and particularly meet the local market while the feedstock for biofuel production expanded dramatically in the country. Therefore, with limit of bioethanol resources, the government should consider carefully for exporting the bioethanol processed products such as sugarcane, sugar beets, corn and other crops to the foreign countries. In addition, the expansion of biofuel would lead to further pressure on food security. Hence, a careful and rigorous assessment of the effects of promoting biofuels in the Philippines should be conducted to alleviate the possible negative impacts of biofuel on food security and to ensure both food security and energy security in the country. However, the food price is an issue of a global nature which has complex causes and impacts at the international level (OECD, 2008). So, it is uncertain whether this option would ease the pressure on food prices and food security.  Although this uncertainty, the government should advance its bioethanol industry in a sustainable way and focus more on the productivity which enhanced further investments.

Secondly, to secure the biofuel market and decrease in food prices, the government should encourage further expansions of biofuel industry which promotes alternative energy sources and support further economic growth in the country. The biofuels development is considered for the fastest growing market for agricultural products and would create great opportunity (Vineet et al., p.2). However, it could endanger the food security (Hartmut, 2008). The government has provided other incentives to encourage the biofuel expansion such as value added tax, production incentives, and direct subsidies. According to the Philippines’ plan for the expansion of bioethanol, it is expected that the annual production of 120 million barrels of bioethanol will be reached by 2013. This means that when the country could secure the supply of biofuels for its market, the food prices would accordingly go down. However, it also depends on the international market, particularly the United States (US), Brazil and other major countries which could also impact on the international agriculture prices. According to Prakash, the global biofuel production could expand from 50 to 250 billion litres by 2025. This expansion would offer remarkable opportunities for the poor (2007, p.2). In addition, the bioethanol program could provide the rural households an increase in their farming incomes. For instance, the rural households could provide their access to land and sell their agricultural products in the market as the bioethanol program is further expanded. Therefore, encouraging further expansions of biofuel development would provide better opportunity for its economic development growth, help to secure the food prices, and sustain the environments. 

Although, both alternative options above have their own advantages, option two is recommended because it is better for addressing the key issue. The government should further expand the development of bioethanol program in order to improve its national energy security, stimulate agricultural development, and importantly decrease the food prices. The use of bioethanol as a fuel has significantly increased worldwide since its benefits, safety, and availability. It significantly reduces harmful exhaust emissions and carbon monoxide levels. The greater the number of biofuel suppliers, the lower the risk dependency (Neff, 1997). In addition, the biofuels could stimulate rural economic growth through providing employment and creating demand for goods and services (Vineet et al., 2008). Given these benefits, it is also important to contribute to the environmental sustainability and sustainable energy sources (IAASTD, 2008).

Finally, given to the benefits of bioethanol would protect the environment, improve the energy security, and enhance the agricultural productivity in the country; the expansion of the bioethanol programs should be enhanced. 

(By Bong Angkeara) 

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How important are crises and conflicts, even sometimes wars, for stimulating development?

Many countries around the world have debated about development issues such as social and economic development so as to bring development for their countries and to get rid of poverty and hunger. Therefore, some definitions of development have been defined such as the development is an expansion of economy and increase of economic development (Peter, 2008). Others defined that it is an increase of people’s choices (Sen 1999, p. 36). The development is divided into two main types. That is, spontaneous and intentional development. The negative and positive outcomes refer to the spontaneous development and the intentional development deals with the negative of spontaneous development. On this topic of development, there are some opinions states that ‘Conflicts and crises, even sometimes wars are significant for stimulating development’.

Regarding this statement, I will argue these opinions due to three main reasons such as war generally brings holocausts, death, and poverty, et cetera. But at the same time, it can be seen both positive and negative effects for both sides. Another reason is that governments’ policies and actions are more important after the crisis, conflicts and wars. Having said that, the necessity of crises and conflicts, even sometimes wars just shape the development but it does not stimulate the development. The other reason is that, crises and conflicts lead to instability and underdevelopment in the society. In order to support my argument, I will discuss about the effect of crises and conflicts, and war. Some evidences and examples will be provided.

First, the positive effect of war can shape economic development in the countries. For instance, the war on poverty, which is the United States (US) government’s strategies, aims to eliminate hunger across the country. Then the poverty reduction plan is created by the government to enhance the living condition of the people and promote full employment and equal opportunity for the African Americans to end poverty in the United States. Nevertheless, it is sometimes unsuccessful to solve this problem because of the inequality of income and job opportunities. So the government will then announce a war state in order to fight poverty and hunger. As evidence, Lyndon in the United States announced the war on poverty in 1964 due to the unemployment issues and the inequitable income of the black and white people. By using this strategy, it can be seen that there is a notably decrease of unemployment rate between the blacks and whites. The blacks were 17.4 percent; which dropped to 3.4 per cent. the whites were 7.1 percent which dropped to 1.6 percent in 1961 after the war on poverty (Fine 1988, p.72). Therefore, it can be seen that the war on poverty can help to improve the people’s living standard in the country. Another example of the positive effect of the war is the fall of Berlin Wall in 1989. There are two different systems in Germany called capitalism and communism prior to the fall of Berlin Wall. Then, it has been combined into a one system after the Berlin fall; which the economy’s condition was changed from the top down to bottom up (Friedman 2005, pp. 53-55). It is not only the changes of the economy’s condition but also the combination of the West and East Germany as Germany. Since they have united, the development in Germany has been notably improved. Therefore, the Berlin Wall fall is a positive effect which can shape development.

Furthermore, the positive outcome from crises is lessons-learnt. The government sometimes realizes that there are problems, which will affect the development and economic growth, needed to be addressed and solved, but they seem to ignore the problems and no actions have been taken. As a result, crises appear. As an example, in late 1990s in England, the sexuality became a crisis due to an increase of sexual transmission. Thus, a high demand for health care services is needed. Concurrently, the National Sexual Health Strategies was issued by the government of the United Kingdom, which aims to protect the transmission across the society (Laverty 2005, pp. 37-43). Moreover, the war of independence is also another positive effect. Many countries around the world had been colonized by the other countries. So, it is impossible to make development happens in that country. Thus, the war of independence is created such as Algeria and Zimbabwe (Arnold, 1992).

However, if we look at the negative effect of the war, it causes severe consequence with high casualties. That is: many people die and injure; the infrastructures were destroyed; and most of the sectors were damaged in the whole society. For instance, the First World War; It was a global war and primarily occurred in Europe from 1914 to 1918. Coming to the end of the war, the total estimated casualties both the civilian and military was more than 40 million; which 20 million were killed including about 10 million civilian and 9.7 million military were died. Around 21 million were wounded (National Archives, 2008). Thus, we can see that war brought about big holocaust for the whole country and the globe. That is, how many people were died and how many infrastructures were destroyed, et cetera. Similarly, the Second World War, It was a conflict global military, which began in Europe from 1939 to 1945. The world's nations were split by this global conflict. There were around 100 million military soldiers mobilized across the state of the war. During the closing days Second World War, the nuclear weapons were detonated by the United States. On 6 August 1945, the first nuclear weapon was detonated by the US on the Hiroshima’s territory, which is a one of the major Japanese city. Three days later, the second bomb occurred on Nagasaki which is another major Japanese city. Around 120,000 people and even more over time were immediately killed by these bombs. Seriously, not only these people died but also the bombs’ effect impacts on the rest of the Japanese people as a whole till present. At the end, the total estimated human loss was approximately 72 million people. About 25 million military soldiers were killed including around 4 million prisoners’ death of war. About 47 million civilians were killed including roughly 20 million died due to the war which related to the disease and famine. (National Archives, 2008). So, we can see that how much casualties due to the war killed the human beings and the effect of war; which leads to a poverty and crises for the whole world. As a result, there was no development during the war but living in hunger and poverty. If we look the war in Algeria, 141,000 Algerian were killed during the war in1954. 51,800 French were wounded and 17,250 were killed. Not only many people die or wounded but also the other sectors and infrastructures in the whole society were severely damaged and destroyed. That is, roads, bridges, schools, et cetera (Arnold 1992, pp. 10-12). Similarly, in 1965 in Zimbabwe, 45,000 were killed during the war. So, the people were forced to be in the military service which means that they need almost all males to be soldiers in order to support war. Therefore, we can see that there is no development almost all sectors in Zimbabwe during this period (Arnold 1992, pp. 68-70).

After war, some countries can develop their countries faster than the others. As evidence, the infrastructure, poverty and socioeconomic development in Cambodia still poor after getting peace in 1989 (Annear, 1997). According to (Koubi, 2006), researched the war impact on economic growth between 1975 and 1989. That is, most of the countries, which do not have involvement in the war, always have more economic growth than countries involved. Moreover, the average of the expenditure of government, the economic growth of GDP, real income, and investment rate were used to measure the effects of the economy of the war. But due to some other factors, which also could contribute to the growth of the economy, it was difficult to measure (Lindgren 2005, pp. 84-87). It is hard to state that war stimulate development as there are some factors, which contribute to development. Generally, wars produce severe casualties and holocaust in the society.

After the Asian financial crisis in late 1990s, social policies attentions were taken into account by the government. The governments started adopting some strategies such as employment services improvement, financial assistance for poor families, and training (Chan 2000 pp. 520-522). Before the crisis, the progress of democracy in South Korea, Thailand and Taiwan were not well connected to the social policy. Nevertheless, this trend has been improved by this economic crisis (Croissant 2003, pp. 520-523). On the other hand, they were linked to the response of good government policies (Martin 1998, pp. 30-33). That is, it does not result from the crisis alone. Moreover, an example of Indonesia was shown due to the situation of finance remained inadequate such as depreciated currency and floating rates. So, we can see that it is vital for the government’s policies which were used in crises’ responses. Therefore, after the crisis and conflict, even sometimes war, it is good or bad based on the government’s policies used to bring development. In addition, economic development also needs good policies as it is necessary to development efforts success (Stiglitz 1998, p. 5).

In contrary, if a bad policy was used by the government, the crises and conflicts will bring about underdevelopment and violence in terms of social, economic and political instability. As evidence, a conflict between Pol Pot and Lon Nol in 1975 in Cambodia, when he came to power, Pol Pot used his bad and cruel policies which made the whole country’s infrastructures destroyed and all the people live in hunger and horror. That is, all the people, who were living in the city, were evacuated to the rural areas and provinces to work in the rice fields almost all days and nights without giving enough food. They forced the innocent people to work like animals. Moreover, more than two million innocent people were killed during his cruel regime. In addition, Cambodia was isolated from the international (Sina and Zimmer, 2005, pp. 330-333). As evidence, we can see that it was underdevelopment during this period because the infrastructures were destroyed and families have been separated from their parents and siblings. That is, people, who lived under his regime, only know the word ‘Angkar’ (which means organisation). Moreover, there was no freedom for people to express their ideas. Thus, it is contradicted to Sen’s development definition which it is as the real freedoms that people enjoy and people’s choices enlargement (Sen 1999, p. 36).

In addition, conflicts sometimes bring about violence in the society causing a decrease of economic development. According to (Lindgren 2005, pp. 70-75), ‘Different conflicts would result in different impacts. There are of four types of armed conflict’. The internal armed conflict is chosen to explain in this context. This conflict occurs between the opposition groups and a state itself. It does not get involved from the other countries. As an example, in 1997 in Cambodia, two political parties were in the conflict both political wordings and fighting afterwards. That is, the current political party called the Cambodian People’s Party and Funcinpec party. The political conflicts were then become a fighting in the central city of Phnom Penh. Like a war in the city by using all soldiers and military forces to fight each other which make the whole country into political and economical instability and people’s horror. At the end, the current political leading party was hardly got controlled the situations. So some people, who are in the conflict areas, moved to the other areas for a while. Concurrently, there were a lot of robberies from the innocent people and business people and killings because of this conflict. Some business properties have been destroyed and robbed. Then, the current leading party got controlled the situation. However, it took long times to secure the social security and public order. Not only the political and economic instability but also the impact on the other sectors in the country such as international and local business and investment stopped. Some companies were completely destroyed during that time. Specially, most of the major international business and investment companies moved to the neighboring countries such as Thailand and Vietnam (Springer, 2004). Similarly, in Thailand, there was a conflict of political party - between the current leading party and opposition party. Then a coup detat was established by the opposition party by using military forces to evacuate the current prime minister. Then, they came to power. As a result, the political situation was severe instability in the whole country. It effects on the economic development and other sectors et cetera. That is, the rising of inflation rate, interest rate and a decrease in tourism after this conflict. Four percent decreased compared to Malaysia and Indonesia due to this conflict. While the economic growth of Thai government was well increased before the coup and the international relations were well connected to the other nations. According to Ockey, the relation between Thai government and the international still remained poor after this conflict (2006, pp. 148-149).

Finally, based on my arguments, evidences and examples, I disagree with the topic as the conflicts and crises, even sometimes wars are significant for stimulating development. First, the war generally brings holocausts, death, and poverty in the whole society. Thus, there is no development for almost all sectors during conducting the war. Concurrently, it can be seen both positive and negative effects of the war. However, it does not stimulate development but it just shapes development. Second, the good policies and actions of the government are more important to bring development for the country after the crises and conflicts. Third, the crises and conflicts lead to the instability and underdevelopment in the society. Evidently, a result of the conflict and crisis will be underdevelopment rather than the development. As the above evidence from Cambodia and Thailand’s cases, which show the conflicts, bring about violence and strong impact on the development of the economy and the political instability in the whole country.

(By Bong Angkeara)

Short response: what are the drivers of change in social policy within international institutions?

Under what circumstances does social policy change? There are some significant  international institutions which have been established to assist in international and regional development such as the World Bank, International Monetary Fund (IMF), Asian Development Bank (ADB), etc. especially, to help the poor or developing countries both financially and socially. Social policies in the World Bank have evolved into three conceptually and operationally separate agenda: ‘social welfare, social protection and social development’ Hall, A (2007). According to Deacon, B (2007) states that at the lower level of organization inside the World Bank (IBRD and IDA), the sectors of interests to us changed significantly in 1996. Before then existed the three departments: environment, education and social policy. Most of the social policy questions were addressed by the education and social policy department, which focused on labor-intensive growth, investment in education and health, and pension reform backed up by a then ill-defined ‘safety net’ for the poor. For instance, Deacon, B (2007) describes that in 1996, a major reform gave rise to five ‘networks’ such as Finance, Environmentally and Socially Sustainable Development (ESSD), Private Sector and Infrastructure (FPSI), Poverty Reduction and Economic Management (PREM), Human Development Network (HD) and Operational Core Services (OCS) to alleviate the poverty in the poor and developing countries and to enhance economic and social development.

In addition, Deancon, B (2007) states that these reforms included ‘macroeconomic policy adjustments’ – fiscal, monetary and exchange rate policy and a variety of other measures as well, from privatization to trade liberation and financial sector reform. Furthermore, (IMF, 1995: 1) shows ‘macroeconomic stability’, a marked based environment for trade and investment, good government through a transparent legal framework and institutions, and participatory development through active participation of all groups in society and social policies, including social safety nets to protect the poor in the period of cost effective social expenditures, economic reform, and employment making labor market policies.

Not only the international institutions but also local institutions, communities and local government play a key role in enhancing economic and social development. The bank establishes policy of the Structural Adjustment Participatory Review with INGO and local NGO involvement which focused on structural adjustment policies in several countries, it concluded that ‘structural adjustment policies’ have contributed to the further impoverishment of marginalization of populations while improving economic inequity (World Bank, 2002a). For example, Oxfam has an interest in being involved in attempts to reach the poorest of the poor. They were also designed to ‘stimulate participatory development initiatives’ by offering small scale-financing to NGOs, community, small firms and entrepreneurs (Fumo et al., 2000: 9). Women with entrepreneurial skills have often been beneficiaries of these (Subbarao and Bonnergee, 1997). However, they were subsequently criticized (Fumo et al., 2000: 25; Hall and Midgeley, 2004: 274) on four counts: they often did not reach the poor but instead proactive NGOs; they were not mainstreamed into government anti-poverty policy; they became substitutes for government expenditure so that if a social fund was active in health provision the equivalent government budget line might be cut; and they were not linked to funding sources that were sustainable in the long term. However, the prime motivating force for its creation was the belief at the height of the neoliberal ascendancy of the 1990s, which increased global trade was, along with the ‘liberalization of capital flows’, the key to increased world prosperity. It was seen as a force to drive down both tariff barriers and non tariff barriers to international trade (Hall, A 2007).

In summary, the economic and social policy reforms within the international institutions, local government, institutions and communities are the key driver of change in social policy for enhancing economic and social development of the poor and developing countries. Even if a greater measure of conceptual and operational integration and collaboration were possible in theory among the diverse arms of ‘social policy’ within the bank, there remains a major practical obstacle to social policy mainstreaming in the organization.

(Writer: Bong Angkeara)

School Project Proposal in Cambodia

1. Introduction and justification

During the Khmer Rouge regime (Pol Pot), all infrastructures in Cambodia were almost destroyed such as schools, hospitals,

roads, bridges, and other public and private buildings. Moreover, more than three million innocent people were cruelly killed including professors, doctors, teachers, civil servants, and ordinary people, it is estimated that approximately 80 percents of the Cambodian educators were killed and the education system was totally eliminated by the regime (Judy, 2008). Therefore, this regime has left the Cambodian people live in poverty for decades till present. After this regime collapsed, the government of Cambodia has started developing the infrastructures in various parts of the country. Particularly, primary school has been rebuilt in major parts of the country. However, the primary education is still primarily concerned due to thousands of villages still lack a functional primary school in the remote and rural areas across the country. About 90 percents of the poor who live in the rural areas cannot attend school due to poverty and a lack of school infrastructure. Therefore, building school infrastructure is very crucial to increase the literacy level and provide better access to primary education.

Therefore, this project is proposed for building a new primary school in Korkisom village, Svay Teap district, Svay Rieng province in Cambodia to increase the literacy level in the primary education in this community which funds will be sourced from the World Bank (WB) and Asian Development Bank (ADB). The length of this project is for two-year plan which commences from January, 2009 to the end of December, 2010. Human resource development is one of the most priorities for Cambodian government to provide the basic education to all Cambodian people (MOEYS, 2008). Thus, this project fits into the government’s strategies to restore education for developing the economy and for poverty reduction, which is one of the most effective ways for country development.

Particularly, this school project will help the local community who live in extreme poverty are able to attend the school for their future development. This project aims to increase in the level of literacy, enrolment and retention rate in the primary education, provide increased and better access to school at close proximity, and establish a school management board for future sustainability in the community. Hence, the children and disadvantaged groups who live in this village are able to enroll and attend the primary education in order to help them improve and change their future and lives in the long term. As a result, there will be an increase a literacy level and school enrolment rate in the community. Therefore, the illiteracy and poverty will be reduced respectively in the future.

1.1 Background

This project is managed by the American Assistance for Cambodia (AAC) which is a non profit organization helping to improve the opportunities for the Cambodian children and the poor to be able to attend primary education. Since Svay Rieng province is one of the poorest provinces in Cambodia, this project is proposed to build a new primary school at Korkisom village, Svay Teap district, Cambodia to help the local community to attend primary education and increase the literacy level in this village. Three main factors such as geographical factor, and insufficient primary education school have been primarily considered by ACC.

First, the geographic factor; Korkisom village locates in Svay Teap district, Svay Rieng province in the Southeast of Cambodia. The total population of Svay Rieng province is around 478,252 which are 4.2 percents of the whole population of Cambodia. Korkisom village is one of the poorest villages in this province. 90 percents of those who live in this area are farmers. So, their main source of income is from farming (NRDB, 2008). This village faces a lot of difficulties almost all sectors, particularly poor infrastructure, low level of living standard, high illiterate rate et cetera. Given this area is remote and rural from the heart of the city, there is less independent organization, civil society, or either the government institutions have not yet taken for development. Therefore, there is almost all sectors in this area are not developed by the government or any non-government organization which leads to an extreme poverty and high illiteracy rate for the people who live in this village.

Second, insufficient primary school; in this province, 67 per cent of the whole population has not completed the primary school due to the lack of school infrastructure and poverty (Province Guide, 2008). Thus, it is of a high concern of providing education particularly, at the remote and rural areas. Therefore, this project proposed to build a new school in this village to increase the number of enrolment in the primary school, and reduce the poverty in this community. Due to these reasons, this village is highly taken into account to build a new school so as to increase the primary education enrollment rate and provide the local community to be able to attend school for their long life future.

2. Project Rationale

This project mainly aims to increase the literacy level and school enrolment and retention rate in this area by 80 percents by 2010. There will be more chances for the local community including children, the disabled, and the disadvantaged groups to attend primary school. In addition, this project will also provide a closest access to school in the village. Therefore, a walking distance to school will be reduced from 10 kilometers to about 200 meters by January, 2010 and the school enrolment ages reduced from 7 years to 5 years which enable the local community able to join school. Hence, more children will be beneficial for education and they would be able improve their lives for their future and overall, the illiteracy level, and poverty will be reduced respectively. This project will also be a model to attract government institutions and non governmental organization to provide further development in order to promote education and improve the living standard as well as infrastructure for this community.

Therefore, ACC is not only looking for sources from the WB and ADB but also further assistances from the government institutions, other international organizations, and relevant educational institutions which get involved in education and development at the primary school level.

3. Stakeholders Involvement

ACC will be taking fully responsible for managing this project and working with relevant stakeholders. The length of this project has been set up for two-year plan which will be held from January, 2009 to the end of December, 2010. ACC will work with its own staff and relevant stakeholders including local community, local leaders, religious leader, and contractor as a community networks from the earlier stage to the evaluation stage. Moreover, relevant government institutions and donors such as the Ministry of Education, Youth, and Sports (MOEYS), District Education Department (DED), Provincial Education Department (PED), Ministry of Environment (MOE), Ministry of Economy and Finance (MEF), Ministry of Health (MOH), and Ministry of Public Works and Transports, WB, and ADB are also contributing in term of advices or technical assistances. ACC cannot work alone without getting supports or helps from the community or relevant stakeholders. Thus, they need to cooperate closely with all these stakeholders to ensure an achievable outcome of this project.

4. Goal and Objectives

The main goal of this project intends to provide a primary education to the local community in order to increase the literacy level by 80 percents by the end of December, 2010. When the school is constructed, more children will be able to have chances to attend school. Thus, more children will be educated and the illiteracy level will be reduced accordingly. To achieve this goal, three main objectives needed to be addressed.

First, we aim to increase the enrolment and retention rate by 80 percents by the end of December, 2010. It is necessary to bring education to the rural children who have been deprived from the educational facilities. Most of the people in this rural village are uneducated. Most of them live in poverty and are difficult to afford themselves. The majority of people are doing farm. When the children come to a school age, they help their families to do farming in stead of attending school due to a long distance. However, after this school is constructed, more children in this community including pupils, disadvantaged and ethnic group will be able to join education. Hence, it is expected that the school enrollment rate will be increased by 80 percents by the end of December 2010.

Second, one of the objectives intends to provide an increased access to school at close proximity. Most of the people who live in this remote and rural village meet lots of difficulties for their lives and suffer from a lack of education particularly. In addition, there is no official school in this village which caused them to give up attending the school. Only the community school has been set up without qualified teachers and school materials. The school has no roof, tables, and insufficient materials for teaching. There is one government school which locates about 10 kilometers from this village. Therefore most of the children are not able to attend school. Moreover, most of girls have less chance than boys to attend school due to a long distance. When the school is available for this village, a walking distance to school will be reduced from 10 kilometers to about 200 meters. The school enrolment age is also reduced from 7 years to 5 years. Hence, the children will be available for having chances to attend school.

Third, this project aims to set up a school management board for sustainability by April, 2009. The school management board is set up to be responsible for all the school activities involved, for instance, drawing up the school plan and management for the benefit of the students. Particularly, this team ensures the functioning and sustainability of school in order to achieve the main goal and objectives of this project. The team needs to be joint by five members including a teacher representative, a local education representative, and other two external representatives to ensure the effectiveness of school functioning and management. The above main objectives are the significant indicators to ensure that the goal and objectives are achievable. However, the proposed detailed activities are needed to be implemented to ensure achieving the above goal and objectives.

5. Project Activity Summary

Some activities are implemented to respond to the above goal and objectives of the project. These activities will be discussed in details as follows:

5.1 Objective 1: To increase enrolment and retention rates
5.1.1 Conduct initial meeting with local leaders

Holding an initial meeting with the local leaders in advance to introduce the purpose of the coming educational campaign, which will be held on semesterly from January, 2009, is significantly important for coordinating the educational campaigns. The first meeting will be conducted early January, 2009 and second and third meeting in July, 2009 and January, 2010. The meeting aims to keep the local leaders and the community about the project plan and activities. So, that the information will be well-informed and the team has enough time for the preparation of the upcoming educational campaign. More importantly, it is quite important that all the local communities including parents, villagers, local leaders, and provincial and district education department representatives participate in this campaign in order to promote and improve the awareness of the importance of education for their children.

5.1.2 Conduct educational campaign

To raise and improve the awareness of education is significant for achieving the goal and objectives of this project. It is difficult for the local community particularly, in the remote and rural area which most of them are less educated and far behind the awareness and importance of education. So, ACC needs to work hard with relevant stakeholders such as the local leaders, local community, and provincial and district education department to enhance the effectiveness of this campaign and ensure that the information reaches all the local people and near by the villages and districts. This campaign will focus on the awareness and importance of primary education for their children. Hence, the campaign plays an important role in promoting education’s awareness for the whole community. Given to a deep understanding of the importance primary education among the local communities, the school enrolment and retention rates will increase gradually.

Therefore, 4 educational awareness campaigns will be held each quarterly from March, 2009 to improve the awareness and importance of education for primary education for the local community. Given the understanding of the importance of education from this campaign’s delivery, there will be an increase in school enrolment. Hence, the literacy level will be increased in the community.

5.1.3 Establish a counseling office

About 80 percents of those, who live in this remote and rural village is uneducated and seriously effects from the Pol Pot regime and the above educational campaign conducted, is not enough for them to faster understand on the awareness and importance of education for their children’s future. Hence one counseling office will be established to enhance the retention rate and counsel the local people on the importance of education. This office will deliver educational counselling services to the local community including children, parents, students, youth leader and local leaders. Particularly, for those who experience lack of the understanding of education. The services of this office particularly implement and increase the awareness of the importance of education which enhance the local community’s understanding and decrease the illiteracy rate among this community. Moreover, ACC needs to work closely with the district education department, provincial education department, and MOEYS to help improve the awareness of the importance of education and better understanding on the education among this community. Thus, it will gradually increase and help improve the local community’s understanding on the awareness and importance of education. So, it is expected that the retention rate will be enhanced by December, 2010.

5.1.4 Conduct training for local leaders on children’s rights

Moreover, in order to increase the school enrolment rate, it is crucial that ACC needs to conduct the training for the local leaders on the children’s rights on education access for a long term goal. So, that they could understand more the importance of children’s right particularly, when their children reach the age for education. This training aims to equip the local leaders’ knowledge on the awareness and importance of education so that they can train and lobby the local community particularly, parents, children and villagers to well understand on their children’s rights on access to education and how this could change their children’s future. They will promote and deliver education’s services for better understanding among the community. Hence, given to a more understanding and awareness of the importance of education among the villagers and communities, the school enrolment rate will be increased accordingly which leads to an increase in the literacy level.

5.1.5 Support children’s forum

The school management board coordinates to set up the children’s forum for the academic discussion competition for children which will be conducted quarterly from January, 2010 to the end of December, 2010. This forum is prepared by the school management board. The purpose of this forum aims to encourage the children to challenge each other in terms of primary education. So, that they would be able understand more about the advantages of education, and could work closely with their team to solve the problems. In this context, they can discuss and compete with their friends in the class and the whole school. Their teachers will explain them the importance of education and teach them how to use the available resources available for them and their local communities. Then, they would be able to spread out the information with their friends and parents in the community. So, this forum is one of the necessary forces for spreading out the information and awareness of education for their friends and the local communities. Moreover, the forum will provide them an improvement for their lives to help their communities.

5.2 Objective 2: To provide increased access to school at close proximity
5.2.1 Identify land site for school

At this stage, ACC will work closely with relevant stakeholders such as local leaders, provincial and district education department and MOEYS to identify the appropriate school land site for construction. They will also consult with MOH, MOE, and MPWT on any future effects or issues which might occur. Thus, a feasibility study of land site for school is conducted by ACC, MOEYS and MPTW. The land site for school construction needs to be abided by a master plan of MPWT and MOEYS. The school site should provide learning and community involvement. Moreover, the site should be closest to the village hub, educational needs and the poor condition of facilities, and future sustainable development. After the school is constructed, it is expected that it will provide an easy access for the local community to attend school. Thus, it will provide an increased access to school at close proximity and promote a partnership with the provincial and local education department and other communities. So, the land site for school construction will be identified by January, 2009.

5.2.2 Select contractor for school construction

Selecting a qualified contractor for school construction is very difficult in Cambodia since most of the school contractors have not officially received a license from the government. Therefore, ACC will work closely and consult thoroughly with provincial and district education department, and particularly, with MOEYS on selecting the precious experienced, qualified, and licensed school construction contractor for this project because the contractor who has licensing in school construction is very important to ensure that the project run smoothly during the implementation process, and more importantly ensure the school building infrastructures have standardized according to the project design. The contractor is daily responsible for building the school and abided by the project design which ACC provided. The contractor selection process needs to finish by the end of January, 2009. Hence, choosing a qualified school contractor will contribute and ensure to achieve the objectives of the project.

5.2.3 Coordinate procurement process for school materials

ACC mainly coordinates the procurement process with relevant school material suppliers in a well-advance due to a long distance of the village and roads’ infrastructure. They will liaise with the suppliers regarding the contracts to make sure that the school construction materials are delivered to the construction site by January, 2009 and have special prices for this project. Then, the school construction material suppliers should be better informed about the difficulties of school construction materials’ delivery due to a long distance and bad roads to the construction site. A contractor manages the school construction and report to the project team if any further construction is more needed or changed. So, ACC is responsible for ensuring that the procurement process of the school construction materials is delivered to the construction site by the proposed schedule. Moreover, ACC needs to work with the contractor to help with the procurement process for buying all the construction and school materials. The procurement process is needed to be abided by the procurement guidelines.

5.2.4 Avail teachers for school

ACC will be responsible for coordinating with the provincial and district education department to provide ten primary teachers for this school and the teachers will be available by July, 2009. To ensure the sustainability of teachers for this school in this village, the district education department needs to select the teachers from the district or village. Due to a geographic and human resource factor, it is not an easy to find teachers who live in this village or in this district. However, the district education department needs to cooperate with the provincial education department to avail some teachers to be available for teaching by January, 2010. In this context, there should have a teacher training program for at least six months and the provincial and district education department need to cooperate closely with MOEYS to provide the qualified primary teachers to conduct the training. Therefore, in the long term plan the community teachers will be upgraded and increased in order to support and provide education for their local community. And the commitment of the local teachers in promoting and providing education could bring confidences for the local community to attend and support their children to join education. Thus, it is significantly important that the teachers are contributing to the ingredient of education in the light of expected increases in primary school enrolment rate.

5.2.5 Provide better access to education

According to (MOEYS, 2008), only 26 percents of children who ages from 12 to 14 could attend primary school which is the lowest primary education access in the region. There is a big gap primary education access between the urban and rural children. The barrier of this access contributes to a very high dropout rate in the primary education. So, it is important that when the school is constructed, the local community, especially the disadvantaged groups, children will be able to join the primary school. Due to a geographic factor, the primary dropout rate is very high. Moreover, their parents do not intend to let their children go to school particularly, girls due to a long distance; the nearest schools from this village is about 10 kilometres far away. The project also aims to improve the school facilities such as library resource available for students to read and research to enhance their further understanding. Particularly, building this school will gradually expanding access to primary education for the disadvantaged groups for this remote and rural village by providing schools, classroom, library, and carrying out the educational campaign, setting up the school management board for future sustainability which is far behind the government’s primary education development, especially, MOEYS and international non governmental organizations.

In this regards, the disadvantaged groups and villagers will have more opportunities to allow their children to attend school, thus the dropout rates will be cut by providing closest school access to their village and the poverty will be gradually reduced in the community in the future.

5.2.6 Strengthen primary education

In the long term goal, strengthening and improving the primary education for the whole community is significant. The school board management is responsible for working with relevant provincial and district education department and MOEYS to provide additional resources such as books, school materials, computers, and further academic curriculum development and textbook improvement. Moreover, strengthening and enhancing primary education, MOEYS plays an important role in building capacity of the provincial and district functioning in terms of educational planning and teacher training since they have legitimate rights to the relevant education institutions. The teacher training should be conducted with the technical assistance from MOEYS and the school management board which aims to improve educational quality and curriculum development. In the mean time, most of the regional teachers are unqualified. Although, it might be difficult for the project team to liaise with the provincial and district education department in order to further strengthening the quality of education at the primary level but it is not expected to receive an immediate result and achievements but it will be gradually improved from January, 2009.

5.3 Objective 3: To establish school board management for sustainability
5.3.1 Conduct election of school management board

ACC will be responsible for coordinating to set up the school board management election which will be held early April, 2009 to provide for the educational needs of the local community. The school board management will be held every four years in conjunction with the provincial and district education department. The application will be publicly announced by the provincial and district education department for this school board members’ selection. The application must be met the requirement which set by ACC to ensure the effectiveness of management of the school. To ensure the sustainability, the members must reside within this province when they are joining the election. So, it is expected that the school board management will be set up by end of April, 2009.

5.3.2 Identify school board management’s responsibility

When the school management board is elected, this team is able to manage the general activities of the school to ensure that this school meets the community’s needs. The team has a primary function for making school policy through the decisions which are open to the public. In addition, this team needs to deal with the relevant matters such as personnel, finance, facilities, and curriculum and is also responsible for employing the necessary teachers and other staff for the school. They could select the local community teachers to join the teacher training program. Therefore, the school management board plays an important role in sustaining, maintaining the sustainability of the project’s outcome in the long term goal, and reinforce the community’s involvement and responsibilities for their children’s education.

5.3.3 Develop structure, procedures, and regulation for school

When the school management board is elected and set up in April, 2009, their main responsibilities are to develop the school structure, procedures, and regulation which is needed to abide by MOEYS. Developing the school structure, procedures, and regulation aim to articulate a common vision and provide a school framework for the local community. It is important to ensure that the staff, students, and relevant members are aware of any causes of staff harassment, inappropriate individual behaviour which could lead to be responsible for the school regulation. More importantly, due to a lack of teachers in the community, the team needs to closely work with the provincial and district education department for recruiting teachers and conducting training teachers in the community.

5.3.4 Improve the quality of education

Most of the Cambodian primary school lacks of library resources and curriculum development and particularly qualified teachers. So, the school management board will work closely with the provincial and district education department about the providing the quality of primary education. It aims to provide the local community with better education and achieve the learning outcomes necessary for the future. Therefore, the qualified teachers are needed and library resources should be available for the school. The school equipped with adequate resources such as books, and other study materials to stimulate students for further learning. Thus, it gradually increases the learning outcome for the students in the whole community.

6. Gender Analysis

In Cambodia, women’s involvement in management and controlling in the work society is less due to some factors such as education, family’s responsibilities, and particularly culture. Most of them are mainly responsible for taking care of their family and children. However, in this project, women’s involvement in the school management board committee and project decision-making process is highly considered. Women have equally rights in controlling and managing in any project’s activities to enhance the project’s achievement to reach the project’s goal and objectives. Women’s participation in this project is also highly encouraged. For instance, the women’s participation of the educational campaign is very necessary for helping to promote the awareness of the education to the local community since women can get involved deeply and closely with most of the people in the village. According to Moser argues that the roles of men and women in the third world society could offer the tools of the concepts and methodology to incorporate gender into planning (1991, p. 323). Hence, this project aims to have a gender balance for both men and women to join all the project activities in order to provide different perspectives and contribution to reach the goal and objectives of the project. The awareness for women and men are crucial for sharing common understanding for the purpose of this project which enhances an opportunity to make the project’s implementation a success.

Due to a very long distance of primary school in this village, the majority of women have not attended school. When the school is constructed, it will provide the closest proximity to the communities. Thus, more women will get an opportunity to attend education comparable to men who have always had the opportunity. The women are equal beneficiaries of the school as a resource too. Regarding the welfare, both women and men will be equally enhanced. They have equally rights to attend education. The detail of the gender analysis is provided in annex 2.

7. Risk Management

According to the study of ACC, it is clearly identified that this project will face some difficulties resulting from a number of issues which might reduce the effectiveness of the project’s goal and objectives. Therefore, this project has been designed to overcome these difficulties and provide a solution to the risks which might occur during the project implementation.

7.1 Environment risk

Some risks might exist during the project implementation. For instance, the environment risk in terms of flooding might occur during the project implementation which might effect on the infrastructure of the building or projection’s functions might prolong. A research by a natural disaster office shows that the flooding in this village rarely happens. However, the local community advises that flooding might occur during a raining season. Given to this circumstance, an emergency mitigation plan has been developed to prevent the school infrastructure.

7.2 Administrative risk

Due to a poor stakeholder perceptions, it is anticipated that the relevant stakeholders particularly, the local leaders, local community, and relevant government’s institutions might not cooperate or work well with the project team. They might be reluctant to participate due to limitation of their staff, and their time and commitment. Importantly, they will not provide their resources or time without getting any benefits. For instance, the district education department might not send their staff or representative to participate in the project’s campaign or meeting since this project location is in the remote area. Thus, ACC will refer the previous project design activities and implementation to study on the issues which might occur with the stakeholder’s participation.

Due to a geographic distance from business area, the unavailability of school materials and equipments supply is of medium concern. Therefore, ACC will have an advanced dialogue with the district education department to contact and assign the school materials and equipments’ suppliers which will be available for students by January, 2009. Similarly, the unavailability of project supplies and construction materials might not deliver to the village in time. Hence, ACC needs to contact with the construction companies in advance and establishes an agreement with them in order to deliver project supplies and equipments for school construction by January, 2009. Regarding the selection of the contractor for school construction, ACC has identified that it might not have a delay in processing this selection since they will have a tender committee to manage the process of tendering. They also experienced with a similar cases from previous project approval.

7.3 Social risk

It is also of medium concern that a low participation of the local community involved in the project’s activities due to a lack of awareness and education, and poor living condition. Most of them might not be interested in participating in the project educational campaign or the project activities since they almost cannot afford themselves for their living. Therefore, ACC needs to work with the local leaders and provincial and district education department to conduct the consultations, community’s involvement, and the community participation’s importance to assist the local community, individuals, and households to better understand the importance of education for their children in order to improve their living standard and the community for a long term goal.

7.4 Budget risk

Although, there is a low level of approving project budget from the sponsors, however, ACC experiences that it might occur. Therefore, the project team needs to assure that the prior approval of project budget needed to be done in advance.
Since there might have some difficulties or risks during the project implementation which might impact on the project’s achievement and effectiveness. Thus, some foreseeing risks have been identified and a mitigation plan is planned to minimize and resolve the risks. Further details of the risk matrix is enclosed with annex 4.

8. Sustainability

When the project finishes, AAC is concerned about maintaining the effectiveness of the project’s goal and objectives. The literacy level and school enrolment rate might decrease in this community. The local community might less focus on educating their children and the relevant stakeholders are less involving in this community. So, only the government and local leader’s role are significantly important for sustaining, developing, and increasing the literacy level and school enrolment rate in this community.


8.1 The roles of local leaders

The local leaders such as village representative, youth leader, and women leader are able to sustain and maintain the effectiveness of the project’s goal and objectives when the project finishes. Since they have been provided some training on the children’s rights, awareness and the importance of education prior to the education campaign, therefore, they can use their knowledge to lobby the local community particularly, parents, children and villagers to understand more on their children’s rights on access to education and how this could change their children’s future. Thus, they have the important roles to promote and deliver education’s services for their community. However, the village representatives, youth leader, and women leader need to work closely and regularly to maintain and sustain the effectiveness of this project. For example, they can set up a quarterly schedule for meeting to follow up any activities on promoting the awareness and importance of education for the children. Thus, sustainability of this project will be maintained, the literacy level rate and school enrolment rate will keep increase respectively.

8.2 The roles of government

The government has a major responsibility and power for sustaining and maintaining the project’s effectiveness because they can strengthen the education through the provincial and district education department to be responsible for improving the education in this community. Since the school is available, they could provide further supports or facilities either through the provincial and district education department. For instance, they can conduct further training for the local leaders and promote an educational campaign for the local community to keep them informed about the importance of education. To maintain the awareness, the government can endorse the relevant education departments in this village to have a regular monitoring and promotion of education. Moreover, the government and its counterparts need to take into account to the remote and rural areas to eradicate poverty and increase the opportunities for all the people to attend education.

Hence, the government and local leaders have significant roles in maintaining and sustaining the outcome of this project. Particularly, MOEYS could provide intensive supports to the provincial and district education department to keep improving and enhancing the awareness of education and also provide the school material resources since they have a legitimate power to implement the innovative education intervention. Thus, the literacy level and school enrolment rate will be increased, and the poverty will be reduced. Thus, the living conditions will be improved in this community in the future.

9. Monitoring and Evaluation
9.1 Monitoring

Project monitoring is crucial to make sure that the project implementation and guideline are carried out as planned whether the goal and objectives of the project have been achieved. So, the project monitoring has been divided into two stages as follows.
First, the monitoring and evaluation team of the project will monitor the implementation process of the project whether the implementation activities have been carried out by the project guideline and procedures. The monitoring should be undertaken before and during the project is implemented and form the monitoring and evaluation system base. It is so important that if any issues come up during the project implementation, the team would be able to identify the problems and to recommend or advise if any changes needed to be done during the project implementation. So, that the rest of the project implementation process and activities could be directed or amended to meet the overall goal and objectives of the project. For example, if there is a low participation of the local community to participate in the educational campaign, they need to find out what is the weakness of campaign. It might lack of communication between the local leaders and the local community or the message is not spread over the whole community.

Second, the team will conduct a field monitoring to monitor on the impact of the educational campaign which has been promoted to the local community. The purpose is to make sure that the local community, parents, villagers are aware of the importance of education for their children. This monitoring will be conducted for a semester base. So, there will be an increase in the primary school enrolment. Thus, the literacy level will be improved and the living condition of this village will be enhanced for the long term goal. After the monitoring, the team needs to come up with the reports for the project team and donors; the World Bank and ADB, and MOEYS.

9.2 Evaluation

The evaluation process can highlight the strengths and weaknesses of the project’s implementation process to improve the future of the project design (Bamberger & Hewitt, 1986). Thus, this evaluation will study the outcome of a project; an increase in literacy level and an increase in primary school enrolment rate which would lead the local community to reducing the poverty and improving the living standard in the long term plan. The evaluation will be conducted semesterly by the monitoring and evaluation team, which will be held at the end of each year. It is important that the donors, district education department, and local leaders will be invited to participate in the evaluation meeting. The purpose of the evaluation is to make sure that the project implementation and activities are abided by the project guideline whether the goal and objectives of this project is highly achieved. The evaluation mechanism is based on the quarterly, yearly report, primary and secondary sources, and survey to evaluate the project’s outcome and the increase in primary enrolment rate. Importantly, the interview will be conducted with relevant stakeholders such as the local community, local people, village chief, and pupils to get better interaction of the outcome of the project and from the expression of the community. It is one of the most important parts of the evaluation, since it is most reliable for evaluation and assessment in order to have further judgment.

10. Personnel

The engagement of all stakeholders in various stages is significant to make this project run smoothly. Therefore, the project management designs to have all the relevant stakeholders actively involve from the early stage to the end of the project such as preparation, implementation, evaluation and monitoring. Thus, three main teams have been identified such as advisory team, management team, and implementation team. First, the main role of advisory team is to liaise with the major stakeholders’ representatives on the consultation, advice, and guideline for the whole process of this project. Therefore, this team should be attended by the representatives from each major stakeholder such as donors, MOEYS, MOH, MOPW, MOEF, MOE, and LL. Second, the management team plays an important role for taking fully responsibilities for the project management and implementation. This team will work together to ensure that the project activities are followed by the project guidelines and procedures. Third, the responsibilities of implementation team mainly involve in carrying out the activities of the project and ensure that the project activities are abided by the project guideline and procedures.

11. Cost and Benefit Analysis

Cost and benefit analysis is a useful tool to analyze relevant expenditures of the whole project including project preparation, implementation, and evaluation cost. It estimates the benefits and costs of the equivalent money value for the projects (Thayer, 2008). The main purpose of this tool is to minimize the cost but efficiently achieve the goal and objectives of the project. Some major considerations on a high cost are the expenses on staff, administration, transportation and project activities. Since this village is located in the remote and rural area, the management cost and administrative cost are highly expensive. For example, the project staffs are reluctant to join the project team in that area due to the distance and infrastructure unless high salary is provided. Regarding the construction and material cost it is estimated that it is not high due the current market situation and it is officially estimated and used by MOEYS which they normally spends this amount of funds to build a new primary school with 5 rooms. However, it is also advantageous that the project activities implementation is low expense since there will be more local communities, local people are happy to contribute their time and strength and join this project, particularly during the project campaign. Thus, there is a small amount of expense on these activities such as providing some drinks.

12. Budget Summary

The total expense of the whole project is estimated USD 296,200 (two hundred ninety six and two hundred thousands US dollars) for two-year plan commencing from January, 2009 to December, 2010. USD 139,650 is estimated to expend on the building construction materials including bricks, stones, sands, et cetera. USD 84,000 expends on the project management and staffs. USD 68,550 will expend on the administration cost such as office rent and purchasing the office equipment for the project team. The cost of the campaign is less compared to the other expenses which cost about USD 4,000. The fund of this project will be sourced from the WB, ADB and other educational institutions. Further detail of the budget summary is attached in annex 5.

(By Bong Angkeara)

Malaysia: Halfway to 2020 Plan

Halfway through its first century of independence and halfway to 2020 plan which is expected towards becoming a developed country by 2020 due to its booming economic growth. The average growth rate is about 6.1 per cents and its GDP per capita was double to USD 15,385 by 2008. Notably, Malaysia has an impressive current account surplus of 99.3 billion Ringgit equivalents to USD 31 billion (Richard, 2006).
The growth in manufacturing, agriculture, and services are significantly bringing Malaysia forwards. The Malaysian electronic export is equivalent to nearly 47 per cents and agricultural commodities such palm oil and rubber contributing 8.6 per cents which leads to a surplus of USD 310 million. Given to its rapid economic growth during the past five years, Malaysian Prime Minister Badawi was satisfied with the achievements and the progress of its halfway in its vision 2020.


Despite a rapid economic growth, it is concerned that this plan might face the risks of getting stuck in the middle in term of great challenges and even more perilous and demanding in the global environments. The main issue in Malaysia Halfway to 2020 plan is a low investment rate. Therefore, this case paper intends to analyze this key issue and provide some new alternative options for the government to achieve the objectives of its vision 2020 plan.


Despite a positive economic growth, Malaysia has a negative investment rate due to its restrictions on openness to trade and investment in terms of government regulations. Comparing to the Asian countries such as China, India, Singapore, and Hong Kong, Malaysia has a lower rate of economic growth. For instance, China receives a huge amount of foreign direct investment which leads to an increase in growth rate in excess of 9 per cents in the past two decades. India became the fastest growing centre of information technology and outsourcing contributing to a growth of 8 per cents annually for the past six years. Exhibit 3 and 4 indicate a huge negative investment of Malaysia which is USD 14.5 billion leading to a decrease in the account surplus (pp. 12-13). According to Figure 1 and 2, Malaysia is similar to the Asian countries in terms of starting a business but considerably worse in terms of excessive regulation which leads to a decrease in investment (p. 9). Therefore, Malaysia might face economic slowdown if this problem is ignored.


To overcome the above issue, two alternative options are recommended to boost the economic growth: ongoing increase in savings and investment rates, and ongoing technological change and human capital accumulation to ensure the stability and enhancement of its economic growth. These options will strengthen the Malaysian economic growth fundamentals.


First, the Malaysian government should continue to increase a level of investment and reduce restrictions on openness to trade to boost an inflow of foreign direct investment. It is significant to keep ongoing increase in savings and investment which lead to an increase in capital stock and income per capita. The high level of inward foreign direct investment leads to an increase in the capital stock and formation which contributes more to the Malaysian economic growth. Additionally, the transparency and consistency of the government policies should be treated for the openness to trade and competitiveness. Thus, it will boost the industrialized sector and enhance an increase in manufacturing, construction and services. For instance, the government’s surplus savings and capital should be used to channel into investments.


Second, ongoing technological change and human capital accumulation significantly boost the productivity and total productivity leading to an economic growth (Helpman 1994, p. 55). Although, the growth of output increases to 6.3 per cents in 2007, it is expected that the growth will decrease at 5.5 per cents in 2008 due to a global turndown. Notably, the Malaysian total factor productivity of more than 2 per cents annually is significant for boosting its economy apart from the growth of labor and capital inputs. For this reason, by continuing the technological change and human capital accumulation will enhance the total factor productivity and could sustain the economic growth.


Although, both two alternative options above are significant to take into accounts, it is preferably suggested that the most significant option to deal with the above issue is option one: Malaysia should increase the level of investment and reduce restrictions on openness to trade to boost an inflow of foreign direct investment. Exhibit 3 and 4 indicate the Malaysian investment was hugely negative USD 14.5 billion which leads to a decrease in their account surplus. Therefore, the government should take into account to further step their investment rates. However, increasing the level of investment alone does not exert an independent positive effect on growth, the openness to trade and human capital development in particular is needed to be tied to investment (Ventura 1997, p. 58). For this reason, the government needs to challenge more with the Asian Countries such as China and India. If they do not improve the weakness of its investment, it would clearly decline as China and India will take more foreign direct investment. At the same time, education and training should be enhanced and government regulation on trade and investment should be simplified to provide for both domestic and foreign investors an opportunity for further investment. As a result, Malaysia would be able to sustain and enhance its economic growth, and even actively compete with the global markets.


Finally, Malaysia has a remarkable economic growth. They could continue to forge ahead with their economic policy towards the achievement of vision 2020 plan. Given to its current account surplus and strong economic growth, Malaysia has clearly stayed on the course of growth. Although, it is concerned that the plan might get stuck in the middle, their economic trend indicates positive growth. However, they need to challenge more on investment, which is suggested in option one above, in order to sustain and boost the economic growth, and seize the opportunities in the next decade.

(Author: Bong Angkeara)

The opportunities and challenges to the WTO accession: the case of Cambodia

Cambodia is one of the poorest countries in the world. The government has deployed many efforts to reintegrate itself into the international economy since the signing of the Paris Peace Accord in 1991. Following this accord, the government's strategies aim to open its economic and trade policies to boost its economy and development, which intends to reduce poverty. As part of this strategy, Cambodia became 148th member of the World Trade Organization (WTO) in 2004 approved at the Ministerial Conference in Cancun, Mexico (Simon & Carlos, 2005). Accession to WTO aims to foster free and fair international trade into the world markets, which is believed to accelerate its domestic economic, legal and institutional reforms to create stable business environments and attract more foreign direct investment (FDI). However, being a member of WTO means that most of external trade barriers will be removed. In this context, the accession of Cambodia to the WTO might be exceptionally beneficial for the country but it also poses great challenges for the country as well (EIC, 2003).

Therefore, the main objectives of this paper aim to highlight the opportunities and challenges facing Cambodia. This paper divides into two sections. Section one discusses three main opportunities of WTO accession: first, access to the world markets; second, access to dispute settlement mechanisms for trade issues and non-discrimination; third, improve better governance and credibility. Section two discusses four key challenges of WTO accession: first, commit in legal and judicial system reforms; second, compete in global markets; third, protect trade-related aspects of intellectual property rights (TRIPS); fourth, forgo high tariff on agriculture products and protect small farmers. 

First, by accession to WTO, Cambodia can integrate its market access to the world economy, which may result in higher exports to the foreign markets and boost FDI inward for the country. This is the substantial milestones not only for the Cambodian economy but for all the Least Developed Countries (LDCs), which seek to leverage the benefits of trade. By this accession, Cambodia is treated by all the WTO³ members as a most-favoured nation (MFN), which cannot be discriminated against unfairly according to the principles and rules underlying the trading system. This provides superior market access in a wide range of products and a wide range of countries. For instance, the garment industry⁴ is one of the Cambodian key industries, which are the powerful stimulus to the Cambodian development. By this accession, Cambodia could protect its garment industry after the export quotas removal under the Multi Fibre Agreement (MFA) arrangements, which are applicable to the WTO members. After the removal, all exports, especially those to the United States (US) markets, will be subject to a high import tariff (EIC, 2003). For instance, about 50 percent of the garment exports have been delivered to the foreign markets, particularly the US. Thus, by accession to WTO could help to secure a lower tariff rate for the LDCs like Cambodia. Indeed, without a WTO membership, it could be difficult for the Cambodian garment export industries to cope competitively with the normal US tariff regime, particularly, after the quota system is removed. This means that a high import tariff imposed by the US might ensure a quick collapse of the non-competitive Cambodian garment industries. 

From these observations, becoming a WTO member is very important for Cambodia to accelerate its economic development process and to raise the living standards of the people through market access to the world markets. Importantly, it also sends a strong signal to trade and investment partners about the future directions of Cambodia, which could attract more FDI inwards. Yet, it does not mean that integration into the global markets access brings higher exports and FDI inwards for the country. Many developed countries still maintain high tariff peaks barriers to protect policy, which close markets for the Cambodian export products.

Second, by accession to WTO, Cambodia can join the WTO dispute settlement mechanism⁵, which is an effective system for dealing with the disputes of international trade. This mechanism is widely recognized as one of the most critical and successful features of trade regime and is very crucial for offering security, safety and predication to the economic issues of the member countries. With suitable dispute settlement mechanisms under the WTO agreements, it would support small and vulnerable economies like Cambodia from any violations, which might be made by the big markets, particularly, from the developed countries. This mechanism is also considered as an important factor in upgrading the rights and obligations of the members under the agreements. This factor is very important for Cambodia to ensure current investment and attract more foreign direct investment for the country. Thus, by accession to this mechanism, the WTO members can shine the spotlight of international legal scrutiny on the protectionist practices of their trading partners. This means that it is significant for the developing countries like Cambodia, which typically lack the market size to exert much influence through more power-oriented trade diplomacy.

In addition, Cambodia can fully benefit from the rights accorded to all members under the WTO agreements such as non-discrimination by other WTO members known as MFN, and potential increase in FDI. For instance, the developed countries provide market opportunities for goods from the developing countries like Cambodia, with better terms and zero percent tariff rates, which could promote more investments, and thus create more local employments in the country. 

On the other hand, Cambodia faces the concept of bad governance and weakness of the government, that is, lack of control, corruption and illegal monopolies, which would discourage and threaten the foreign investors. This signal could affect on the trade environment in the country (WTO, 2003).

Therefore, by accession to WTO offers the opportunities for Cambodia to set up a legal framework, which would improve better governance and credibility. It is significant for the economy of the country to introduce its credibility in the commercial policy, which is a consequence of adherence to WTO rules. Better governance and credibility is very vital for both domestic producers and exporters from other countries wishing to access the economy’s markets in Cambodia. Thus, by strengthening better governance and enhancing credibility would significantly improve the confidences of the foreign investor.

However, by accession to WTO, it does not mean a panacea⁶. Simultaneously, it will also bring the challenges to the Cambodian government as well. One of the most challenging tasks facing Cambodia is to make its commitments in legal and judicial system reforms such as the establishment of a specialised commercial court and the enforcement of rule of law as part of its accession to WTO (Bernard, et al, 2002). For instance, 47 laws and regulations are needed to fulfil the requirements of the WTO membership and needed to be passed by 2006 (EIC, 2003). This means that the government needs to implement committed reforms to align its domestic institutions and policies with the disciplines of WTO. Indeed, the government also needs to re-establish itself as an open-market and democratic country. Particularly, the social justices, human development, and the rules of human rights, which are the most immediate and important tasks for the government, are needed to be promoted to enhance the investment for reconstruction and development, and reform the central institutions of macro-economic management. For example, according to a report of the World Bank (WB), the CamControl and customs office are one of the most corrupt government agencies (2003). Therefore, if these institutions are not well managed, it could damage the Cambodian economy, which increase unemployment and make the Cambodian people poorer.

However, if all of these reforms are carried out properly, it would stimulate related economic reforms, which will be conducive to improving the investor confidences and hence it could attract more foreign investments for the country, which leads to the development of the country as whole.

Moreover, another primary challenging tasks facing Cambodia is to make local industries and private sectors more competitive. It would open the foreign markets for Cambodian exports as well as opening the domestic market for imports. In this situation, the Cambodian local product sectors might be difficult for competing with the foreign producers since its production cost is not competitive. That is for such reason as poor infrastructure, high energy prices and corruption in the country. For instance, the Cambodian agriculture products are not competitive with the agriculture products in the neighbouring countries due to high trade costs, which involve some unregulated practices in the exporting process. For this reason, the local industries and private sectors face difficulties to compete with the foreign investors.

In addition, the agreements of TRIPS are needed to be fully implemented while accession to the WTO. Therefore, the implementation of intellectual property rights, which intends to protect authors, inventors, brands and names against imitation and reproduction, could affect the Cambodian education and human resource development. For example, the pirated compact disk, video compact disk, and copied books, unlicensed films might no longer exist in Cambodia due to the pressures of this accession. Thus, a high price of the original books and related educational materials with copyright cannot be afforded by the Cambodian citizens in such a poor country like Cambodia, which the majority of the population earning is less than one dollar per day. For this reason, the enforcement of intellectual property rights law would take away the livelihood of thousands, and cut off many from educational and entertainment materials.

The Cambodian agriculture also plays a major role in the Cambodian economy. More than 80 percent of the workforce is in the agricultural sectors and most of them are small and poor farmers. By accession to WTO, the government needs to take specific attention given to the impacts of this accession, particularly on agriculture with a focus on small farmers (Benedicte, 2004). There will be of a risk of social crisis if the impact is not mitigated. It might be useful for implementing a price policy to protect the farmers’ income under the constraints of WTO. In addition, under the WTO membership, Cambodia basically needs to forgo its rights to use high tariffs and farm subsidies in the agriculture products. Some of the requirements, which are imposed on Cambodia, go far beyond what the US and the European Union (EU) commits themselves in the negotiations (Oxfam, 2003). Thus, the Cambodian government limits its tariff to an average rate of about 30% for agriculture products and 20% for industrial products. Cambodia also agrees not to subsidize its agricultural exports, although the other least developed countries are not required to undertake such commitments. However, this provision could effectively seal off Cambodia’s right under the agreement on agriculture (AOA) to introduce export subsidies on any agricultural product in the future (Cham, 2004). 

Finally, by accession to the WTO could be exceptionally beneficial for the country but it also poses great challenges for the country as well. By this accession, the WTO offers several opportunities for Cambodia. That is; accessions to foreign markets; accession to dispute settlement mechanisms for trade issues and non-discrimination, and improving better governance and credibility. It is the substantial milestone for the Cambodian economy and an effective lever to promote trade liberalization and market access in the world markets, and also sends a strong signal to trade and investment partners about future directions of Cambodia’s investment. With suitable dispute settlement mechanisms under the WTO agreements, it would support small and vulnerable economies like Cambodia from any violations made by the big markets from the developed countries. This mechanism is very crucial for offering security, safety and predication to the economic issues of the member countries. Cambodia also has the opportunities to improve its own governance and credibility for the foreign investors.  Therefore, all of these opportunities would lead to an overall economic growth, which is believed to lead to reduce poverty in the country. 

Yet, matching the opportunities and facing the challenges, the Cambodian governments have significant roles to play under the WTO agreements. By participating in these global economies, Cambodia needs to face several challenges to fully take the advantages of this accession. That is, Cambodia needs substantive legal and judicial system reforms and competing in global markets. The government needs to speed up its legal and judicial system reforms to transform Cambodia to a country governed by the rule of law, and protect trade-related aspects of intellectual property rights (TRIPS), and forgo high tariff on agriculture products and protect small farmers. Therefore, the Cambodian government strongly believe that by receiving these opportunities and facing these challenges would significantly accelerate its domestic economic, legal and institutional reforms to create stable business environments and attract more FDI for a long term goal of the country’s development as a whole.
(Writer: Bong Angkeara)

My Deepest Condolences Message to our King Father Norodom Sihanouk

Dear all,

Photographer: Bo, Royal Embassy of Cambodia to Brunei

Our nation and people are currently of greatest sadness for the loss of our beloved King Father Norodom Sihanouk who passed away on 15 October 2012. Millions of Cambodian people sadly joined His Majesty's procession ceremony from the airport to the Royal Palace to respectfully pay tributes to our King Father with a heavy heart, heartfelt love and respect, and with deepest sadness in the country as a whole. This has shown a truly emotional unity from our people from different provinces and places in our country including the monks, the old and the young who held mourning ceremony for our beloved King Father.

On behalf of the Cambodian Economist Group (http://groups.yahoo.com/group/CamEconomistGroup/) and the Cambodian Development Network (http://www.angkeara.blogspot.com/), I would like to sincerely express my deepest and heartfelt condolences to our King Father Norodom Sihanouk. His Majesty's great success and achievements have led our country into peace, unity, and prosperity over the past decades till present. Therefore, His Majesty's glorious achievements and honor will never be forgotten and always be in our sincere heart. In this sense, I am strongly confident that our King Father will be a good and respected model in our history for our next generation in the future. Further information on our King Father's bio, please feel free to go through His Majesty's website: http://www.norodomsihanouk.info/

May our beloved King Father's soul rest in eternal peace... His Majesty King Father is always in the heart of Cambodian people forever...

Please kindly accept my deepest condolences, sincere love and respect on this occasion.

Brunei Darussalam, 31 January 2013,

Yours Sincerely,
Bong Angkeara

220 Scholarships for Cambodian Students