[World Bank] Cambodia's Poverty Rate Falls

from MSN Money

PHNOM PENH, Cambodia (AP) - The World Bank said Thursday the number of Cambodians living under the poverty line has dropped from 47 to 35 percent over the last decade, but that the income gap between rich and poor remains a serious problem.

"This is a good news day for Cambodia," Nisha Agrawal, the bank's country manager, said at a press conference releasing a report on the Southeast Asian nation. The study contained the new assessment of how many Cambodians lived below the poverty line, defined as less than 1,826 riel ($0.45) a day.

Economic growth, driven by tourism and the garment industry, has led to "a very dramatic rise" in the accumulation of assets among even the poorest of the poor who form the bottom 20 percent of the country's 14 million people, Agrawal said.

In this group, she said, access to modern sources of energy such as electricity has risen from 2 to 28 percent, possession of radio from 24 to 32 percent and ownership of television sets from "3 to a surprisingly high 36 percent."

The use of thatched roofing materials has declined from 74 to 29 percent while the use of iron or aluminum for roofing has gone from 6 to 31 percent.

But development has also widened the gap between the richest and poorest people in the country -- a major political and social challenge, she said.

"The income of the richest group grew by about six times the rate of the poorest. This has led to a very rapid rise in inequality in Cambodia," Agrawal said.

Per capita consumption of the richest 20 percent of the population grew by 45 percent over the last decade, compared to 8 percent of the poorest 20 percent, she said.

Prime Minister Hun Sen, speaking at the ceremony, called the report proof that the development policy of his government was on the right course.

"Politically, this assessment has helped correct the unfair perception in several domestic and international circles, who have believed that the economic growth over the last decade has not helped reduce poverty in Cambodia at all," he said.

But "we must not overtaken by joy over our performance," he cautioned. "We must double our effort to achieve better."