FINAL EXECUTIVE SUMMARY

HUMAN DEVELOPMENT REPORT
CAMBODIA 2019

SUSTAINING NATURAL RESOURCES FOR ALL

As Cambodia continues its transition to a higher level of development, for food, shelter and income, which in turn makes them acutely
it faces a historic opportunity to manage its natural resources for the vulnerable to climatic and other shocks. The careful management
benefit of both people and the environment. Cambodia can mitigate of natural resources will enhance their resilience and improve future
mounting pressure on forests and other essential natural resources by prospects for human development.
diversifying patterns of access and use, while building the foundation While there are often trade-offs between economic and environmental
for an economy that continues to be strong and fair, and, crucially, objectives, there are also points of complementarity. This National
more sustainable. Human Development Report focuses on forests and protected areas,
Cambodia has made steady progress, with rising incomes, but the in exploring how the country might win on both fronts.
country faces long-term challenges. If Cambodia acts now, it can Cambodia is performing very well in terms of economic growth
expand and improve the quality of its gains, as well as ensure that they and human development. GDP expansion continues to top 7
can be maintained. Much depends on reaching the rural areas that are percent annually, accompanied by one of the world’s fastest rates
home to about 80 percent of the population, including the majority of of improvement in the global Human Development Index.
people in poverty. Many remain highly dependent on natural resources

Significant strides on life expectancy and to a lesser extent, higher How can Cambodia
incomes have been the primary drivers; however, educational move forward?
advances lag behind those of Southeast Asian neighbours.

Human development performance has become increasingly Ensure that effective law enforcement deters illegally sourced
equitable. Remote areas have seen major improvements, driven products so sustainable products can better compete. This should
by dramatic decreases in child and infant mortality. Longer term fit within a framework to regulate and control illegal harvesting,
trends towards gender equality are noteworthy. Yet disparities production and sale of products from natural resources. It requires
remain, and the current momentum will diminish if gaps between collaboration between Government enforcement agencies and
areas and groups do not continue to close. communities, and a shared commitment to sustainability.
Economic development has driven growth, but not without Take regulatory measures to accelerate the shift to sustainable
alarming pressures on natural resources. More rural communities production. These include ensuring property rights, so local
than ever before have roads, energy and public services, and new communities and the private sector invest in long-term, higher
economic and employment opportunities. Yet the current pattern value added, sustainable timber and non-timber forest products.
of development has taken a clear toll on the environment. Forests Regulations, legal requirements and administrative procedures
offer a salient example; in 2010, they covered 57.07 percent of should be simplified to reduce transaction costs.
Cambodia, but only 46.86 percent by 2018.

The degradation of environmental resources may harm prospects Make a start towards sustainable energy. Like all countries, Cambodia
for continued development. Large-scale developments such as dams is undergoing a transition to energy sources that are sustainable and
and the loss of common resources, especially forests, have had major non-polluting. It can take an important early step in this direction
human development impacts in rural areas. Many people who directly through the sustainable management of woodfuel, which remains an
depend on natural resources for subsistence, incomes and safety essential source of energy and income in many rural communities.
nets, are adversely affected. In the longer term, the degradation of Aim for more productive local economies that deliver higher returns
ecosystems also leaves people at large more vulnerable to disasters, for for people and the environment. This depends on the successful
example through flooding that strikes both rural and urban areas. development of promising markets for sustainable products. High
Market failures are among the sources of environmental degradation. value-added sectors include niche markets for high-end furniture made
The lack of a market value for environmental resources encourages of timber, rattan and bamboo; environmentally friendly commercial
exploitation for short-term economic returns, resulting in a timber production; and high-quality honey and medicinal plants.
proliferation of cheap, unsustainably sourced natural products. Economic returns may increase through simple and efficient equipment
Producers have limited incentives to invest in measures such as for processing and packaging, and improved local knowledge of
energy-efficient charcoal kilns, improved cooking stoves and production techniques. These should be geared towards meeting
alternative energy. Complex regulatory requirements and insecure quality requirements, environmental standards and market demands,
land tenure also discourage sustainable production as do significant including in wider domestic and international markets. Other steps
uncertainties about which areas are prioritized for conservation. might encompass directly linking producers with consumers, and
reducing transaction costs, for example, via mobile apps.

Options for sustainable natural resources management exist, but are Reinforce the State’s pivotal role in working with communities to
costly if only economic returns are factored in. For the first time in co-manage natural resources. This starts with clearer recognition
Cambodia, this report models a number of different options for timber of the formal, secure and long-term rights of communities to
production. It finds that illegal logging is far more lucrative, in purely sustainably manage natural resources and derive tangible benefits.
financial terms, than any of the seven options examined for sustainable The Government could consider accelerating approval time frames
timber production. Yet, when an array of development benefits and reducing costs for community-based management, clarifying
and longer-term costs are considered, some of the best options are resource boundaries and strengthening law enforcement. Appropriate
private teak plantations and natural forests managed by communities. measures should be in place so that community-based institutions
Community forestry has the lowest investment requirements and risks. uphold community interests as well as environmental goals.

A broader set of human development costs and benefits need to Roll out systems for payments for ecosystem services nationwide. Such
be better understood and balanced in ecological, cultural and payments should recognize the full economic value of goods and
economic terms. Modelling work on alternative forms of timber services from natural resources. Costs of preservation are reflected
production shows that while short-term economic gains from through a market mechanism, when people pay to use water, and
the extraction and use of natural resources are significant, the funds go in part towards maintaining watersheds. Priorities include
long-term gains decrease rapidly due to the finite supply of these the full valuation of the environmental services of key ecosystems in
resources. This also has ecological and cultural costs. Continued Cambodia, the operationalization of two payments for ecosystem
benefits, including human development gains, fundamentally services pilots in Sihanoukville and Siem Reap provinces, and the
depend on more sustainable management. development of policies to implement the approach nationally.

Collaborative natural resources management between the state and Apply integrated land-use planning to achieve economic and
local communities offers a promising approach but its full potential environmental goals. For strategic land-use decisions, a decision
remains untapped. Unsustainable extraction is inevitable unless support system can facilitate assessments of both social and
communities enjoy secure resource rights and realize tangible environmental impacts. It can offer vital insights into balancing
benefits. Well-calibrated collaborative management could respond to economic development, poverty alleviation and the sustainable use
the wide variances in community incentives and capacities, and guide of natural resources as part of shaping a next generation of medium
consistent progress towards sustainability and human development. and long-term human development strategies for Cambodia.