World Bank Warns Assembly of Economic Risks

World Bank experts identified several key challenges facing the Cambodian economy—particularly a weak agricultural sector, poor education and rapid credit growth—to parliamentarians gathered on Wednesday at the National Assembly.

Ulrich Zachau, the World Bank’s country director for Southeast Asia, said the meeting was part of a “systematic country diagnostic” study seeking to establish dialogue between the government, World Bank and others regarding key priorities for developing the country’s economy, with a particular focus on ending extreme poverty.

World Bank experts would continue to meet with representatives from both the private and public sectors “to summarize and highlight the priorities that people have mentioned from all across Cambodia,” Mr. Zachau said.

“Some of the highest priorities that people have highlighted are about education and skills, to help farmers who make up the majority of people in poor rural areas,” he said.

During the presentation, World Bank representatives, citing preliminary findings, warned that credit growth was “booming” by 30 percent to 40 percent a year, and microfinance lending had saturated the market. Secondary education completion rates also remained low, creating disadvantages for citizens and limiting mobility as well as opportunities for the economy, they said.

Government representatives at the meeting brushed off some elements of the World Bank’s report.

Chheang Vun, the ruling CPP’s National Assembly spokesman, said the presentation showed the strengths and weaknesses of Cambodian finance, but it failed to account for the deaths caused by years of civil war.

“We do not just lack institutions, but also teachers. We do not have enough teachers since they got killed,” Mr. Vun said. “To train a teacher it takes many years of general education and teacher training.”

Mr. Vun also brushed off the World Bank’s warnings on rapid credit growth, particularly in the microfinance sector.

“As for the increasing growth rate of microfinance, we should be happy,” he said. “It leads to poverty reduction through lending to small businesses.”

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