“The Challenges of the CLMV Countries and “The Challenges of the CLMV Countries and the Role of Development Partner” the Role of Development Partner”
Pou Sovachana Professor Paññāsāstra University of Cambodia
After the cold war ended in the late 1980s, ASEAN tried to strengthen itself by expanding its members on the hope that an increased in population would translate in to economic growth, and strength. Vietnam joined ASEAN in July 1995, Laos and Myanmar in July 1997, and Cambodia in April 1999. The admission of the four new members noticeably widened the political, economical, and cultural diversity of ASEAN. The ten members states have agreed that political stability and long term economic growth could only be attained if they all cooperate (ASEAN Charter). However, with the expansion of Cambodia, Laos, Myanmar, and Vietnam (CLMV), political and economical disparities have ensued between the old and the new member states. Moreover, the development gap among the member states in the region has also persisted. The challenges of the CLMV countries and the role of development partner will be discussed and examined.
Present Situation of the
CMLV Countries
Despite serious attempts for economic development throughout the South East Asian region, there remains a large gap between the CLMV countries and other nations within ASEAN. To achieve the ambitious goal of having an ASEAN Economic Community (AEC) by 2015, it is essential
to reduce this development gap, which in turn necessitates further reforms in the CLMV countries.
I begin by describing the present economic condition of each of the four CLMV countries and discuss broadly their economic challenges as follows:
Cambodia: Since peace and national reconciliation had returned after the 1991 Paris Accord, Cambodia has enjoyed a broad degree of macroeconomic stability and development. Starting from a very low base, Cambodia is now considered as one of the fastest-growing economies in the region, enjoying double-digit growth rates before the global economic down turn. Growth in 2013 has been estimated by the Ministry of Finance and Economy at 7.6 percent this year, driven by garment exports, agriculture, tourism and construction. The ministry said that the GDP volume would be around 15.19 billion U.S. dollars and GDP per capital would be 1,036 U.S. dollars in 2013. The industry sector is expected to go up by 9 percent this year, agriculture by 4 percent, service sector by 9 percent, hotel and restaurant sector by 14 percent, financial sector by 12 percent, and real estate by 11 percent. However, the International Monetary Fund (IMF) had predicted in April 2013 that Cambodia's GDP growth would be at 6.7 percent, while the Asian Development Bank (ADB) and the World Bank (WB) put the country's growth at 7.2 percent and 7 percent, respectively. Despites steady economic growth, the UN Economic
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and Social Commission for Asia and the Pacific (ESCAP) said in its annual report that Cambodia remains one of the least-developed countries in the Asia-Pacific region and face challenge of diversifying its economy and moving up the production value chain. There are still widening income inequalities and depleting natural resources. Government should tackle economic policies that are more inclusive and sustainable to stamp out high poverty rate, large income gap and low production base, and inadequate human resources. Cambodia still experiences difficulty with its neighbors in terms of exports.
Lao PDR: Lao PDR is aiming to remove itself from the list of least developed countries (LDC) by 2020 and eradicate mass poverty by 2010. However, to achieve those goals, it must first deal with a number of constraints such as a low production base, lack of highly skilled human resources, poor infrastructure, and an unfavorable geographical position as a landlocked country. The government hopes that infrastructure development, tourism development, and promotion of natural resourcesbased industries will change the country from being a landlocked one to a land-linked one. It is also hoped that this will provide Lao PDR full access to the seaports of neighboring countries and other regional networks of roads and railways. These priority sectors are expected to significantly enhance the process of economic development and poverty reduction
Myanmar: Myanmar’s huge and untapped potential for future economic development lies in its large local market, abundant natural resources, and young labor force. Although the country is dealing with a number of challenging domestic and international problems, it is committed to regional
economic integration. Myanmar’s four economic objectives (Basic Economic Guidelines towards Democratic State) are the following: 1) to develop agriculture as the base of the economy along with the other sectors; 2) to allow the a market-oriented system to evolve properly; 3) to spur economic development with the technica