Cambodia – a life for all with clean water…..

One of the more impressive organisations I have observed whilst studying development economics is Sustainable Cambodia.  Sustainable Cambodia is an empowerment organisation, which works with the families of rural Cambodian villages to help them achieve sustainability and self-sufficiency through wells, irrigation systems, schools, training and empowerment (1).  I was drawn to Sustainable Cambodia and the work undertaken as it resonated with my personal experiences in Cambodia.

 

Whilst viewing the Sustainable Cambodia website, I simultaneously researched some basic information on Cambodia to help me put the information in perspective.  Cambodia has a population of 14.8 million people, 80% (11.84 million) of which live in rural areas (2).  The country has a human development index rating of 138, out of 187 countries and I was very surprised to discover that this ranking rates as ‘medium development’ (3), as I would not have expected this from my humanitarian experiences in the country.  Life expectancy is approximately 71 years, up from 37.8 years in 1980 at the close of the Pol Pot reign (3).  I found this information encouraging, however I do acknowledge that this country is still suffering in the aftermath of this genocide.  The World Bank estimates GDP at US$14.06 billion in 2012 with GNI per capita in PPP term is $2,095 (2).  In 2011, 20.5% of the population was living below the poverty line, down from 50.1% in 2007 and 62% of the rural population have access to clean water (2). Let’s do the math’s – there are still approximately 4.5 million rural Cambodians (that’s almost the entire population on Melbourne) without access to water, clearly demonstrating that the work Sustainable Cambodia undertakes in rural areas is important and necessary to improve the quality of life. 

 

Since 2004, Sustainable Cambodia’s unique empowerment model has assisted tens of thousands of Cambodian men, women and children to rebuild their lives.  The organisations head office is in the United States however what I liked about this organisation was that there was a local office in the Pursat province (north west Cambodia) where the organisation supports rural villages.  Our learnings and experience in the development field tells us that organisations are far more successful in the field when they can engage with a community at the grass roots level as opposed from an office many thousands of kilometers away.  I was also pleased to discover that organisation only employed native Cambodians; all international resources are unpaid volunteers.  This strategy assists in keeping the organisations overheads at less than 3%, promotes local job opportunities and allows the majority of funding to be used to develop rural village families and communities.  This information resonated with my development discourse learning where community programs lead by local people are generally more successful.

 

Sustainable Cambodia, works with villages that have no source of clean drinking water. Without access to clean water, communities rely on sourcing dirty water from scum-covered nearby retaining ponds, or carrying water in plastic containers from far-away rivers – just as I had seen first hand in Cambodia.    I asked myself the question – could I imagine a life where access to clean water was a constant struggle and a constant risk?  The answer is simply no and I struggle to accept that this should be acceptable for many millions of people in Cambodia and around the globe. 

 

It was interesting to learn that Sustainable Cambodia assists communities to gain access to clean water in varied ways, through installing water wells, rainwater harvesting and through bio-sand filters.  Sustainable Cambodia empowers the village families to choose their own water well. The village development committee, Sustainable Cambodia staff and well drillers then determine a suitable location for the well. The villagers themselves dig the initial well pit, usually around 20 to 30 feet deep, using hand tools.  The well driller will then drill a conventional deep-water well through the bottom of the pit and once complete the village development committee contracts with a particular family for the maintenance of each well.

 

What I liked about this process was that the village community is engaged and empowered from the initial process, they choose the well, assist with the determining the well location, they assist with building the well and they are responsible for maintaining their new asset.  In development discourse we read and learn time and time again that to ensure sustainability and success in a project, it is imperative that the individual, family or community are involved from the project inception, that they are given ownership and the tools to ensure that the project is sustainable. 

 

Through Sustainable Cambodia, a well can cost US$1,200, for a multi-purpose well to US$2,200 for a deep-water well.  This includes supplies, training and oversight to ensure the village is maintaining the wells.  Each well will service five to 15 families, dependent upon the type of well and the proximity of the families.  It was pleasing to read that Sustainable Cambodia acknowledges that the village requires training and education to maintain their new asset, without this investment it would be certain that the functionality of the well would cease over time. 

 

In taking a moment to apply these figures in an economic context, I calculated that a small financial investment (in terms of Western currency) CAN significantly improve the lives of a community, even save lives.   An investment of just US$90 to US$440 can significantly improve the lives of a Cambodian family living in poverty and without access to water.   I broke this figure down again in AUD, for approximately AUS$1.25 per day over a 12 months period an individual could support a family and provide them access to clean water.

 

We know that lives can change when clean water becomes available to a community.  Sickness and disease is dramatically reduced. Water is not only available for consumption, thus aiding in reducing hunger and malnutrition, it can be used to grow produce or even to fish in ponds.  Children who previously worked for hour’s everyday transporting water have the opportunity to attend school regularly.  The insight (and personal relief) for me was to know that there are organisations in the development field that implement their work based on sound development and economic theories and that these DO have a positive impact on lives.  This exercise reinforced my feelings that a small investment of time and money can have a life-changing outcome and has encouraged me to continue to learn more about economics and development in Cambodia.  After all, Cambodia is a country close to my heart…..

Reference:

  1. http://www.sustainablecambodia.org
  2. http://data.worldbank.org/country/cambodia
  3. http://hdrstats.undp.org/en/countries/profiles/KHM.html

The Bottom Billion (Paul Collier)

I should probably by saying I am a fan of Paul Collier, I have read his book The Bottom Billion which inspired me to enrol in the Introduction to Development Economics course.  For those who have not read the book, take 16 minutes to watch this ‘Ted Talk.’

http://www.ted.com/talks/paul_collier_shares_4_ways_to_help_the_bottom_billion.html

One billion people are stuck living in economies that have been stagnant for 40 years.  How can we as global citizens give ‘credible hope’ to these one billion people?  This is our fundamental challenge now in development, as the societies that these one billion live in cannot offer this hope.  Consider this – what if we do nothing today, where will these bottom billion be in another 40 years?

Collier identifies that the last time the rich world developed a region was in the late 1940’s, in Europe after WWII.  Lead by the USA, Europe was brought back in to economy development through aid and also through strategies including the reversal of (US) trade and security policies and dismissal of national sovereignty.  The United Nations, Organisation Economic Corporation Development, International Monetary Fund were founded and Europe was encouraged to create a European community.  These systems (aid, trade, security and governance) for mutual governance support are still the ‘waterfront’ for effective policies.

This approach is just an important in our world today however as Collier notes the challenge is different.  It is now about the bottom billion catching up, not the rebuilding Europe.  As a Gen X, (and definitely not a baby boomer!), I had never really stopped to consider that the rebuilding of Europe after the war was ‘development’.  Whilst I appreciate that life in Europe post war would have been challenging, they did have institutions in place to assist the rebuild.  Witnessing the livelihoods of developing societies around the world (i.e. Southern Africa, Cambodia, Nepal and India) that form part of the bottom billion, I do wonder how and when we will be able to bring these societies in to our developed world.  Personally I have the view that the lack of (credible) institutions and infrastructure in bottom billion countries indicate that giving credible hope for development will be more difficult than the rebuilding of Europe after the war.

Collier looks at mutual systems of support for ‘governance’ and how we can do one thing to assist the bottom billion.  The optimism is in the commodity booms, which is currently pumping unprecedented money in to many (however not all) of the bottom billion countries.  Examples of this are in Uganda and Ghana where oil has been discovered. What we are seeing is that the new revenue flows from the commodity booms dwarf aid, for example Uganda is receiving $50 billion per year in oil revenue.  Compare this to the 60 countries of the bottom billion were the total aid flow is $34 billion.  This has to provide some optimism, this flow of resources from the commodity boom to the bottom billion is without precedent.  These statistics were interesting to hear and reinforce my personal view that aid alone is not the answer to developing the countries of the bottom billion, economic development and growth is an important strategy to assist these countries.

How will this commodity boom help the development of the bottom billion?

To answer this, Collier examines the relationship between higher commodity prices of exports and the growth of commodity exporting countries for last 40 years.  He found that the first five to seven years is positive, output across the board will increase and so does GDP.  Longer term (15 years later) the data is less positive.  I was surprised to hear that most societies historically have ended up worse off than if they had no boom at all.    The critical issue here is the initial level of economic governance when resource boom accrue.  In countries with good governance (i.e. Norway, Canada and Australia) there is no resource boom; growth increases in the short term and then increases more in the long term.   The resource curse is confined to countries below a threshold of (good) governance.  These countries will still grow in short time as we see today in many countries that are experiencing their best growth rates ever.

The question is where do the countries of the bottom billion fit in this threshold?

Collier identifies that there is one big change since the commodity boom of the 1970’s and that is the spread of democracy.  What he identified is that democracies have had a significant adverse effect – democracies make more of a mess of resource booms than autocracies.  This was another surprise, however Colliers explanation did provide some clarity.  Democracy has two distinct aspects, electoral competition (how you acquire power) and checks and balances (how you use power).

What has been identified is that electoral competition is damaging democracies whereas strong checks and balances will make the resource boom a success.  Countries of the bottom billion are struggling to achieve is strong checks and balances what these countries got in the 1990’s was instant democracy, that is elections without the checks and balances.

We need to consider how we can help improve governance and introduce checks and balances, as in all countries of the bottom billion, there are intense struggles to achieve this.

Collier suggests that one simple answer is the introduction voluntary international standards that spell out ‘key decision points’ to be undertaken to harness the resource booms.  One example already exists today, the Extractive Industries Transparency Initiative where government report to their citizens of what revenue they have.

One example of the content of these international standards includes selling the rights to resource extraction through verified auctions rather than individual deals between companies and government officials.  More often tonight, ‘deals’ occur today in bottom billion countries: this is beneficial to the company and government officials and often does not benefit the countries citizenship.

We know we can’t change the societies of the bottom billion.  What we need to do is assist the reformers in these societies who are currently struggling and failing because the odds are stacked (high) against them.  I agree with Collier in that we need to form a critical mass of informed citizens otherwise politicians of the bottom billion countries will get away with gestures, that is things that look good HOWEVER will not give credible hope to the citizens of the bottom billion to live as we do in the developed world.

Reference:

http://www.ted.com/talks/paul_collier_shares_4_ways_to_help_the_bottom_billion.html

Democracy and Growth

In this article, Barro examines the relationship between democracy and economic development.  He determines that the west can contribute to the prosperity of developing states by exporting their economic systems rather than political systems.  History shows the west has often imposed political systems on developing states in an attempt to encourage economic growth, however this has been typically unsuccessful.  Barro identifies that political systems in developing states usually develop after a reasonable standard of living is attained. 

Barro acknowledges the effect of democracy on growth is ambiguous. He notes that in Capital and Freedom, Friedman argues that ‘political and economic freedoms are mutually reinforcing’ and that more democracy will encourage economic right and stimulate growth.  However, Barro also acknowledges ‘growth retarding’ features of democracy.  These include social programs that redistribute income from the rich to the poor or where interest groups redistribute resource that favor themselves.  Barro event identifies authoritarian regimes that have modern economic development in systems of limited political rights and sites examples of dictators using their power incorrectly resulting in adverse effects of growth.  He concludes that economic outcomes in such authoritarian regimes are uncertain at best.

A common viewpoint is that prosperity tends to inspire democracy and although this ‘Lipset hypothesis’ lacks theoretically foundation, there are many case studies to support this.  In examining the interaction between economic growth and democracy from 1960 to 1990, it was found that the higher the human capital of the country, (in health and education, a lower fertility rate and less government spending on consumption) the higher the states growth rate.  Examples of states with high growth rates during this period are some of the East Asian countries including Hong Kong, Singapore, Taiwan and Malaysia. 

In addition, Barro acknowledges states with higher standards of living, measured by real capita GDP, infant mortality, male and female schooling tend to approach higher levels of democracy over time.  This also can explain while countries with low levels of development typically do not sustain democracy – as can be seen in sub-Saharan Africa today.

Barro acknowledges that there have been lessons in the west exporting their democratic processes to developing states.  He identifies that democracy is not the key to economic growth, although acknowledges that this can be beneficial for countries with few political rights.    He also identifies that political freedoms will diminish over time if economic growth gets out of line with the states standard of living.  

In summary, if economic freedom can be established in a developing state, then growth would be encouraged and over time we would see the state becoming more democratic in its own right.

Reference:

Barro, R.J. 1996, “Democracy and Growth”, Journal of Economic Growth, 1, pp. 92-98.