With an
average gross domestic product (GDP) growth of around seven percent in the last
decade, Cambodia is much wealthier and has just become a lower middle-income
country. But do people have enough to live the life they value? How much is
enough and how can it be measured?
Many data
and indexes have been used to measure the ability of people to live the life
they want. Development economist Mahbub Ul Haq defined this ability in the
context of human development and framed it in terms of whether people are able
to “be” and “do” desirable things in life.
The
“being” dimension includes the opportunity that people have to be fed,
sheltered or be healthy while the “doing” concerns their ability to get an
education, to work and participate in community life.
Since it
was first defined in 2010, human development has been annually recorded by the
United Nations Development Program (UNDP) through the human development index
(HDI). The index measures three dimensions that reflect countries’ achievements
in education, health and living standards, and has been complemented over the
years by other indexes that address the nuances of measuring human development.
The
multidimensional poverty index (MPI) stands out for its ability to record these
dimensions in a simple and intuitive way among countries, within countries and
most importantly between groups in the same country.
Another
unique feature of the MPI is its ability to capture the level of deprivation
and lack in human development. The MPI can gauge changes in the number of those
falling in this category ‒ the MPI poor ‒ and changes in the intensity of
poverty over time.
This
implies a pivotal innovation in the way governments approach their poverty
reduction policies. It emphasizes not only that is necessary to reduce the
number of people living in poverty, but that it is equally to improve the living conditions of those
that remain below the poverty line to improve the indicator that defines
multidimensional poverty.
The
country’s index was last calculated through the Cambodian Demographic and
Health Survey 2014 and presents insights on Cambodia’s human development. As
suggested by national and international measures defined by income and
consumption, Cambodians are better off today. The number of people deprived of
education, health and optimal living standards decreased from seven to five
million people. While Cambodians have enjoyed better health and living
conditions over the years, their educational attainment lags behind.
With over
1.6 million Cambodians living with at least one child not in primary school and
two million living with at least one household member not completing primary
education, almost a quarter of the population does not currently possess the
knowledge and skills they need to live the life they want.
Possessing
the necessary skills would be important for Cambodians but equally important
for the country if it aims to sustain the economic growth it has experienced so
far. As a determinant of human development, education is a necessary condition
for productivity and sustainability.
Many Cambodians lack the adequate education that would ensure them a
better future, and lead to greater human development.
In the
light of high employment-to-population ratios, the MPI results suggest that
Cambodians are employed in jobs that do not require a high level of education
and thus, do not bring high returns. But why are households not getting more
education if it brings better incomes? Cambodia’s high drop-out rates in
primary and secondary education, as reflected in the MPI data, demonstrates
that households reckon completing primary or secondary education not worth as
an investment because of the low returns involved.
As
highlighted in the Asian Development Bank – International Labor Organization
study on Asean integration, Cambodian growth hinges today in sectors “where
levels of productivity are not significantly higher than in agriculture ‒ and
sometimes lower” and that do not require much higher levels of education beyond
primary level. Only the business, insurance and real estate sectors are more
productive, but they require investing in education to complete at least
university studies.
If the
economic sector fails to propose viable opportunities for all secondary and
higher education graduates, what would people pursue an education for?
It would
be critical for Cambodia to go up the value chain and counter the current
underinvestment in education at the demand side. If provided with job
opportunities with high returns, Cambodian households would potentially be
encouraged to demand for higher education. Likewise, if relevant economic
sectors were to require specific technical skills, this may drive the supply to
provide quality and tailored technical higher education that would generate a
higher skills match.
By
closing the education gap, Cambodia can therefore create a virtuous circle of
education supply and demand that would bring prosperity to the middle of the
education spectrum which has, at the opposite ends, unskilled and high
qualified labor. This is especially needed in such a critical moment as in
Asean integration. The presence of higher skilled laborers at all levels
available in neighboring countries may dissuade foreign direct investors in
higher value added sectors, leaving Cambodia at the lowest step of the regional
value chains.
At the
same time, should education fail to meet the needs of the newly established
economic sectors and if necessary investments were made in higher value added
sectors, Cambodians might miss out on the best job opportunities to the benefit
of workers from neighboring countries.
All in
all, Cambodians are in need of a much better education and a more diversified
economy to live the life they want and value. That is equal to saying human
development needs to be attained in Cambodia at the individual and country
level.
Better
living standards and a reduction in consumption and income poverty have
assisted economic growth so far but they cannot, by itself, sustain this growth
over time without the necessary investment in human development. Higher level
of human development determined by better education will improve productivity
and bring prosperity to both the lower and higher skilled. It will influence
the motivation to demand for better education and thus, spur the education
sector to provide better opportunities.
Marisa
Foraci is an economist at the United Nations Development Program in Cambodia.
Marisa
Foraci
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