Monday, November 25, 2013

Globalization in Cambodia, Cured or Cursed?

Sovanna Six-Story Shopping Mall, Phnom Phenh

Slum Areas on Mekong River

By Khmer Wathanakam

Globalization is a process of international integration arising from the interchanging of economic and cultural activities.  The term originates from the European age of discovery, but it has rarely used until mid-1990 when this term has been heavily used by the IMF and many academics, and it became a study course of the International Relation Major.  Since the end of Cold War 1991 causing by a collapse of the Communist Bloc in Eastern Europe and the Soviet Union,  globalization has sped up in a remarkable pace.  Separately, globalization has spread into Cambodia in full scale since the UN-organized election 1993.  As Cambodia abandoned the Communist central planned economy and embraced a free market economy, eventually, the country has opened its door to the world in the first time since 1975.  Through globalization, Cambodia has thrived with fast economic growth and modernization: it brings more jobs, increases incomes and standard of living, improves health care and education, and finally brings in technologies and new ideas to the people who have deprived for decades of war and economic embargo from the West.  However, based on a real condition in the country, dose globalization help or hurt the people in Cambodia?

There is unquestionable that globalization has brought amazing economic growth and increasing standard living of the people.  Since the Paris Peace Accord 1991, Cambodia has changed its face from  a war-torn country to the fast growing economic country in the region; some foreign economists named Cambodia as a tiger cub of the economic tigers in Asia--China, Japan, Taiwan, South Korea, and Singapore--when Cambodia's GDP grows average 7-9 percent annually.  Such a high growth strongly supported by tourism and exports of textile and farm products.  The textile industry, mostly owned by foreign investors, have employed over half a million workers, and the tourism industry has created hundred thousands of jobs and attracted millions of foreign tourists every year.  Along with the textile and tourism, agriculture products--a traditional backbone of the country economy--has become a leading export products after the textile.  Farmer can increase their incomes when their rice and other farmed products are highly demanded by export markets, and also farmers feel wealthier when their land value are multiple increased over the past twenty years.

Globalization not only bring jobs and export markets for the country but also new technologies and ideas for the people.  Today most schools, universities, government institutions, and private companies are equipped with high tech-communications--computers, Internet services, and telephones--up to date as most developed countries in the world.  English has been widely used by most educated people and students, and it has become an instructional language in many schools and universities in the country.  Hotels, resorts, casino, real estate developments, banks, businesses and shopping centers have sprung up all over the cities.  As business activities have grown, they drive up the land and property value that make some people become millionaires over night.  Many kinds of product are imported from many countries around the world: from automobiles, computers, cell phones, and many different luxury goods that are strongly demanded by wealthy people and newly emerged middle-class. We have seen many fast food restaurants, and other different Western franchises  that never had been in the country before.

Nevertheless, along with prosperity, globalization also brings miserable condition to numerous unfortunate people from the rural areas as well as the cities: destroying traditional livelihood of people and environments, creating migration and displacement of people, driving up the cost of living, and widening a gap between the rich and the poor even larger.  The old European proverb says, "If you create property, then you create the poor." Exactly, in Utopian society or in Pol Pot's regime even we lived in miserable condition without enough food to eat or clothes to wrap up our body, but we still did not consider ourselves as the poor, since there was no rich people around us and in the whole country.  Now we live in a capitalist society where wealth is being used to classify the people in the society, so if people don't possess wealth, they are poor even they have enough food to eat and clothes to wear, and shelter to live.  How can we classify the people who live without these basic needs--food, clothes, and shelters?

Now we look back to negative effect of globalization: Since it spread into the country in 1991, many peasants lost their lands, and they moved to the cities to search for jobs, especially young people even migrated to foreign countries to find job such as Thailand, Malaysia, South Korea, and so on.  And when people have crowded in the cities, they have faced many problems from shelters, sanitation, traffics, and the high cost of living that made them even more miserable.  Phnom Penh now has population nearly 3 millions, among the crowded city in the region.  Also, the government's economic mismanagement has created the gap between the rich and the poor wider when the rich have more advantage than the poor in making their livings.  This is the true negative effect of globalization; however, many countries in the world are able to take advantage from globalization to develop and modernize their economy with minimum negative effect when they have wiser and transparent policy.  Free trade, cheap labor cost, and high demand for products have made the rich countries more beneficial from globalization than the poor countries like Cambodia.

In conclusion, globalization has brought both positive and negative effects on Cambodian economy, and the people are more likely to get most benefit from it if the government has more transparent and sustainable economic policy.  Corruption and mismanagement are the great obstacles in reaping most benefit from globalization.  In the industrialized nations, their governments try to bring economic justice for the people by narrowing the gap between the rich and the poor through progressive taxation.  The rich and high income person must pay higher tax rate while the poorest person pays no tax.  In such process, the government will use the tax surplus to improve health care, education, welfare, and many other social programs that benefit the poor.  In Cambodia, there is no brake to stop the rich and accelerator to push the poor up; as result, the rich will get richer and the poor will get poorer.  At the end, globalization just brings economic injustice to the country not a true economic prosperity. 

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