restricted access 17. Poverty Situation
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353 Chapter 17 Poverty Situation At the end of the Khmer Rouge regime the entire population of Cambodia was living below the poverty line. Economic liberalization in the 1990s returned normalcy to the country and development over more than two decades has improved the poverty situation. Poverty receded from 43% in 1993/94 to 30% in 2007. 17.1. Dimensions and Characteristics of Poverty 17.1.1. Updating the Poverty Line Cambodia’s poverty lines consist of a single national food poverty line (based on an unchanging reference food bundle) and three region-specific nonfood allowances. The Cambodia poverty lines are expressed as daily per capita levels of food and nonfood consumption in the current prices of each region (i.e., Phnom Penh, Other Urban and Rural). Updated Food Poverty Lines The food poverty lines for each region are based on the estimated cost of consuming a single national reference food bundle providing an average subsistence diet of 2,100 calories per day (i.e., averaged over persons of all ages and both sexes). A three-step procedure was used to update the 2004 food poverty lines to 2007: (1) use the village food price data collected in the CSES in all three regions (i.e., Phnom Penh, Other Urban, Rural) and the quantity weights from the 1993/94 baseline reference food bundle to estimate spatial (regional) differences in food prices in 2004 and 2007, (2) estimate food price inflation in Phnom Penh using price data from the Phnom Penh CPI and quantity weights from the 1993/94 baseline reference food bundle, and (3) combine the temporal price index for Phnom Penh with the spatial price index to obtain temporal price indices for the remaining two regions. Poverty line is defined as the income threshold below which the household (or individual) is considered poor. The individual poverty line set by the government is based on the consumer expenditure necessary to obtain 2,100 food calories a day, plus a minimum of non-food items computed according to the level of development of the commune. 354 Table 17.1. presents the updated food poverty lines for 2007 that are obtained by multiplying the food poverty lines for 2004 in column 1 by the 2007 values of the temporal price indices. Table 17.1. Updated food poverty lines, 2004 and 2007 Source: WB (2009). Poverty Profile and Trend in Cambodia. Updated Nonfood Allowances Table 17.2 presents the inflation-adjusted regional nonfood allowances and the overall poverty lines (i.e., the sum of the updated food poverty lines in Table 1 and the updated nonfood allowances). Table 17.2. Updated nonfood allowances and overall poverty lines (current Riel per capita per day), 2004 and 2007 Source: WB (2009). Poverty Profile and Trend in Cambodia. 17.1.2. Characteristics of Poverty in the 1990s The RGC’s 1999 Socio-economic Study, the 1998 census, and the 1999 poverty indexes of the World Food Program (WFP) can be used to determine communes affected by food insecurity. In 1999, 36 % of the 13 million inhabitants of the country live below the poverty line; 43% of them are under 14 years of age, and thus do not contribute fully to the country’s economic activity. Nearly 85% of the population lives in rural areas, and agriculture constitutes the main source of food and income for families. Nearly 50% of Region 2004* 2007* Phnom Penh 1,782 2,445 Other urban 1,568 2,274 Rural 1,389 1,965 Region 2004* 2007* Updated nonfood allowances (current Riel) Phnom Penh 569 647 Other Urban 384 430 Rural 364 402 Updated overall poverty line (= food poverty line + nonfood allowance) Phnom Penh 2,351 3,092 Other Urban 1,952 2,704 Rural 1,753 2,367 355 children under the age of five suffer from developmental abnormalities and 20% from severe malnutrition. 17.2. Defining Features of Poverty Ordinarily, poverty incidence is accelerated by war, internal conflict and economic crises that cut off access of households, especially the most vulnerable, to resources which are needed for livelihood. The lack of owned resources except labor by the poor promotes a continual deterioration of living conditions, aggravates inequalities, and leads over time to destitution and extreme poverty. In the absence of public assistance and sustained community solidarity because of changes in ethical and cultural standards, a breakdown of social bonds occurs alienating the most disadvantaged in their own country. The most noticeable...