World Bank : "Country’s transition to low-middle income would be officially rec in 2016"
Posted: Mon Oct 26, 2015 1:22 pm
Interesting article
A downside to economic success
http://www.phnompenhpost.com/business/d ... ic-success
A downside to economic success
http://www.phnompenhpost.com/business/d ... ic-success
Too soon?“Cambodia isn’t going to wake up one day and suddenly face a whole new world just because it is classified as middle income,” he said.
But it will face new challenges. The middle-income trap – an economic term coined to describe the difficulty in transitioning from a middle-income to high-income country – will be a real concern for Cambodia as it moves forward, Higgins added.
High wages, which will impact low-cost manufacturing, and under-investment in infrastructure and education, Higgins said, could see the country getting stuck in the middle-income trap. “In Cambodia, both of those issues are present, so we need to see a lot more investment going into education and infrastructure.”
Miguel Eduardo Sanchez-Martin, senior country economist for the World Bank in Cambodia, said the country’s transition to low-middle income would be officially recorded by the World Bank in July 2016.
He added that this migration would likely result in donors scaling back their grants to Cambodia, but that the government was aware of this and in response was scaling up revenue generation.
“In fact, domestic revenue has been improving during the past several years, thanks to the Public Financial Management Reform Program,” Sanchez-Martin said.
He added that revenue collection improved markedly after the government introduced its five-year national revenue mobilisation strategy last year.