First Regional Workshop

7 May 2002

Economic planning and protected areas

Presented by Ros Seilava, Financial Controller, Ministry of Economy and Finance

Introduction

Cambodia is an agrarian economy with 80 per cent of the workforce employed in agriculture, which accounts for about 36 per cent of GDP, while industry accounts for 25 per cent and services 35 per cent.

Cambodia has a population of about 13 million people, of which 36 per cent live under poverty line. 90 per cent of the poor live in rural areas. Average per capita income is less than US$300 per year.

Water, energy, fisheries and tourism play an important role in economic growth. These resources are critical for sustainable development.

Modern industry, such as garments, also relies on natural resource supply for its development.

The contribution of natural resource use to economic growth in Cambodia

Three phases characterise the growth in Cambodia during the nineties:

The first period: 1993-96
The second period: 1997-98
The third period: 1999-02

Growth was rapid during the first period, with a peak of 7.6% in 1995 and an average yearly rate of 6.6% over the first four-year phase. This period is characterised by an intensive use of natural resources, water, forests and fisheries resources overuse resulting in rapid deforestation and a decline in catch-per-unit-effort.

During this period there was an increase in logging and fisheries for both domestic consumption and exports and intensive development of agriculture with the repatriation of refugees from the Thai border. Between 1993-97 an estimated 700,000 ha of land was deforested; 345,000 ha being relegated to shrublands and a similar amount converted to agriculture.

Growth slowed down in 1997 and 1998 (3.7% and 1.5%). It was a boom-burst growth. However growth has picked up again since 1999-02, buoyed by garments and tourism - both dependent on natural resources.

Policy response to optimise the contribution of natural resources to the economy

For this reason, the concept of protected areas, such as national parks, fish sanctuaries and biosphere reserves is critical for sustainable development in the next decade. Protected areas cover 20% of the land area, watershed, gene pool, water and forest and also have eco-tourism potential.

Recognising its importance, the Royal Government of Cambodia moved to introduce forest reform, which focuses on combating illegal logging, improved forest concession management and community forestry.

Fisheries reform resulted in cancelling more than 50% of fishing lots and community fisheries.

Land reform, introduced to ensure security of land use and land tenure, encourages long-term investment on land productivity. A Ministry of Water Resources was established to better manage this important resource.

A shift from only using "command and control" as the tool of management to a policy mix: command/control and economic instruments, such as the level of timber royalties, community development and moral suasion has taken place.

The policy priority is for rural and agricultural development, poverty reduction and increased investment in rural areas.

The decentralisation of economic and budget planning with participation of rural communities has meant the following:

• A positive impact on protected areas;
  
• Conservation for meeting the needs of the local communities;
  
• Community development and sustainable use of natural resources;
  
• Accounting protected areas in local economic activities.

There has been movement from an open access regime to common property rights regime. In developing community forestry and fisheries, members have both rights and responsibility to protect resources.

There has also been an increase in investment in protected areas, although the level of investment did not match the contribution it made to the economy.

The contribution of protected areas to sustainable economic development in Cambodia

This presentation and the field reports highlight the contribution of protected areas to sustainable development in the next decade and the need to rationalise the use of natural resources in the protected areas:

There is great potential ecotourism value from protected areas representing an important source of development. There is an increase in national and international tourists visiting protected areas and therefore potential for job and revenue generation for local communities. However there are also negative impacts.

Forest resources and non-timber products (rattan, bamboo, resins, food etc.) are collected for traditional uses and for cash.

Development of new energy resources will boost industry and reduce pressure on forests. 95% of rural people use firewood as energy. The construction of the Kirirom hydropower station provides cheap and clean energy. There is a multiplier effect on economic activities. However environmental impacts need to be considered,

Protected areas benefit agricultural productivity through soil conservation and water flow regulation, which are critical for the provision of potable water and for the irrigation, leading to the development of sustainable agriculture and special protection for the agricultural landscape.

In the future protected areas will promote trade with full implementation of the Kyoto Convention through carbon trading, thereby renting out protected areas and biodiversity to other countries.

Actions for the future

By developing protected areas Cambodia has embraced a new instrument for sound natural resource management, which focus on both protection and sustainable use in response to overuse of natural resources during the boom-burst period. However, appropriate action needs to be taken on several issues:

1. Budget reforms need to address funding shortages through;
• Introduction of a transparent program budgeting;
  
• Performance indicators for inputs and outputs;
  
• Decentralization of budget planning.
2. Development of a regional development plan to minimize the impact of road construction, population growth and immigration on protected area natural resources.
3. Strengthening institutional capacity for the protection of biodiversity through improvement in financing and local infrastructure development.
4. Adopting an appropriate policy mix:
   • Regulatory: Command & Control
     
   • Economic instruments: Market/incentive based instruments
     
   • Institutional: Community based management and co-management
     
   • Moral suasion: ethical, moral, and duty of care.
5. Development of a common property rights regime to allow local communities to set the procedures to share the products of the common property and responsibilities for sustainable use and protection.
6. Promotion of community development by either converting common property rights to a private right or restraining the incentive to convert common property rights to private rights through regulation or restrictions.

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Review of protected areas and their role in socio-economic development
in the four countries of the lower Mekong River region

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