Economic Growth

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Background
Although Cambodia has experienced strong growth since 1999, the economy is fragile and undiversified. Growth was fueled by garment exports, tourism and urban construction, leaving the economy vulnerable to external factors. In addition, the benefits of growth are concentrated in a few urban centers and not rural areas, where most of the population lives. The economy is largely based on micro, small and medium enterprises (MSME) in the informal sector that are hampered by a poor business-enabling environment, endemic smuggling, lack of transparent regulation and few business-development service providers. These MSMEs have difficulty competing for domestic market share with products from neighboring countries.

Objectives
USAID’s Economic Growth program is helping MSMEs in rural areas increase their productivity and enhance the business-enabling environment. The program’s focus is on improving selected value chains; strengthening the voice of the private sector to better articulate its views on trade and investment; and improving the government’s capacity to promulgate and implement policy reforms and address regulatory constraints on trade and investment. USAID works in 12 provinces and seven value chains: swine, aquaculture, brick and tile, wild honey, resin, water and sanitation, and eco-tourism.

Results
• Helped over 5,800 poor rural entrepreneurs, who typically lack opportunity, training, and access to business-related information, to boost production and sales by 100% - 340%.

• Nearly 25,000 mostly poor households now have affordable, clean water piped directly to their homes.

• Dramatically increased the sales of animal input suppliers, after persuading them to train small farmers on the uses of their medicines and vaccines. USAID is now working with seven of these suppliers and several village veterinarians, and has facilitated over 80 training sessions for roughly 2,500 MSME clients.

• Rallied 200 farmers to write a letter to the government about foreign firms dumping diseased pigs at below-market prices. Soon after, the pig producers received an eight-month moratorium on pig imports. USAID has facilitated 32 instances of provincial-level public/private dialogues, helping over 500 MSMEs express their concerns to government representatives.

• Organized over 60 domestic and international trips for government officials and small business owners. These exposure trips have bolstered government support for improving the business-enabling environment, and they have shown participants how business is done in other parts of Cambodia and abroad.