Contribution of Forestry to Poverty Alleviation - APFNet

harvesting, resin tapping, fodder, and traditional medicines. Thus, local peoples’ rights of access to
forest resource utilization are fundamental. The contribution of forests to the national economy is not
fully realized and the GDP share of the forestry sector continues to decline. The challenge is to capture
revenues from extractive activities relating to forest and non-forest products and to fully account the
values of biodiversity conservation and environmental services.
Economic Outlook: 2009-2013
In mid-2009, the economic outlook in the very short-term faced two important downside risks. The
first was the uncertainties about the severity and duration of the global financial crisis and the ongoing
economic recession in developed economies, as well as the potential impact of the swine flu epidemic
on the tourism sector. The second risk was a very slow pace of economic recovery in developed
economies. With timely responses by the RGC in relation to the severe global financial crisis, the
downside risks and the negative impact on Cambodia’s economic growth as well as on the wellbeing of
people, especially the poor and vulnerable, were minimized. On the other hand, the swine flu epidemic
did not expand to a level that was anticipated. The country now faces a daunting challenge of finding
new markets beyond the US and the European countries to return to the high rates of economic growth,
with significant poverty reduction that the country achieved over the last decade.
In the past five years, RGC’s sustained efforts to strengthen fiscal discipline, to put in place an
increasingly credible monetary policy framework, and the implementation of structural reforms helped
to produce the best economic performance in Cambodia’s history since 1993. Structural changes enabled
a well-performing economy in the modern history of Cambodia since 2003. During the current crisis,
the Cambodian economy shows a strong degree of resilience and flexibility. The RGC is confident
that continuing to vigorously pursue the implementation of its policies will greatly contribute toward
improving the economy.
To achieve the target growth rate by the economic sector for 2009 until 2013, the following capital
investments in forestry-related sectors are needed: about CR 11.8 billion (US$ 2.9 billion) for agriculture,
fisheries, and forestry sector and CR 488.3 billion (US$ 119 million) for the forestry and logging sectors
(Ministry of Economy and Finance 2002). Until 2013, the contribution of the agriculture, fishery, and
forestry sector to the GDP will slightly go down (from 4% in 2010 to 3.2% in 2013), while that of the
forestry and logging sector will remain constant at 1.1%.
Rural Poverty Reduction
Poverty reduction remains a major challenge for Cambodia. Poverty declined slightly from 39%
to 35.9% between 1993 and 1999, then to 30.1% in 2007 based on the poverty headcount index. A
number of challenges need to be addressed in the years to come. It is clear that poverty and hunger
eradication require a multi-faceted response addressing economic, social, and governance issues. In
terms of economic policies, there is a need to ensure that the growth process is increasingly pro-poor,
generating benefits for those in most need. Democratic reforms must be pursued, along with progressive
decentralization. On the social front, measures of effective social protection need to be strengthened
and human capacities reinforced. More generally, changes in the institutional environment are required
to strengthen the role of civil society and the private sector in the development process.
In addition to chronic poverty, there are major challenges associated with vulnerability and insecurity,
in particular food insecurity and vulnerability to floods and droughts. As the poor are more vulnerable
to disaster, specific measures to reduce the effects of shocks as well as to improve people’s capacity to
respond are needed. The government’s capacity to manage natural disasters must be improved and, more
generally, the government must position itself to provide broader social protection to those in greater
need. The challenge is to find innovative approaches which complement coping strategies of rural
populations and to ensure that social assistance programs are directed to those in the direst need.
Cambodia’s strategies to promote socio-economic development and poverty reduction are outlined in
NPRS 2003-05. The Governance Action Plan complements these documents, setting the framework
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