Kov Phyrum Va Sothy Kheang Seang Horn

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2 Social and Economic Impacts of GMS Southern Economic Corridor on Cambodia Kov Phyrum Va Sothy Kheang Seang Horn Economic Institute of Cambodia Suite 234, Phnom Penh Center Corner Street 274&3, Phnom Penh, Cambodia Tel: /Fax: Mobile: October 2007 Research and Learning Resource Center MEKONG INSTITUTE Khon Kaen University Khon Kaen 40002, Thailand -Mekong Institute Research Working Paper Series No. 01/ i

3 Published by the Research and Learning Resource Center of the Mekong Institute (MI) Khon Kaen 40002, Thailand Telephone: to 2 Ext. 401 Fax: research@mekonginstitute.org library@mekonginstitute.org Website: Mekong Institute Research Working Paper Series are the outputs of research study projects supported by the Mekong Institute. The research reports have been reviewed and edited by at least one Technical Editor of the Mekong Institute Research Advisory Committee (MIRAC). Social and Economic Impacts of GMS Southern Economic Corridor on Cambodia Kov Phyrum Va Sothy Kheang Seang Horn ISBN Keywords 1. Southern Economic Corridors 2. Implications for Cambodia 3. Development Concepts and Challenge The findings, interpretations, and conclusions expressed in this report are entirely those of the author/s and should not be attributed in any manner to Mekong Institute or its donors/sponsors or editors unless otherwise stated. Mekong Institute does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The material in this publication is copyrighted and Mekong Institute will normally grant permission to reproduce portions of the work. -Mekong Institute Research Working Paper Series No. 01/ ii

4 THE MEKONG INSTITUTE The Mekong Institute (MI) is an inter-governmental organization working in the six Greater Mekong Subregion (GMS) countries (Cambodia, Lao PDR, Myanmar, Thailand, Vietnam and Yunnan Provice of China) to provide capacity building activities for government officials, members of private enterprises and civil society involved in the development of the subregion. MI works closely with the governments of the six GMS countries in designing and delivering high quality and relevant human resource development programs. The capacity building activities include learning programs, special focus learning forums (policy dialogue), and GMS focused research in areas of GMS high priority development needs identified by the stakeholders. To support GMS focused research activities, MI has started an in-house research capability by establishing Research and Learning Resource Center. At the beginning of 2006, MI formed the Mekong Institute Research Advisory Committee (MIRAC). The aims of this research networking are, to bring together researchers from the GMS countries as well as researchers from non-gms countries to initiate research networking and participate on collaborative research activities on GMS related topics. MI has currently at least 2,500 alumni throughout the GMS and beyond and 33 staff at the headquarters in Khon Kaen, Thailand. Managing Editor Bhoj Raj Khanal Research Manager Mekong Institute, Thailand English and Technical Editor Dr. Christopher Gan Associate Professor Lincoln University, New Zealand Comments should be sent to the first author Mr. Kov Phyrum Researcher/Infrastructure Specialist, Economic Institute of Cambodia (EIC), Suite 234, Phnom Penh Center, Corner Street 274&3, Phnom Penh, Cambodia, Tel: /Fax: , Mobile: ; Or Research and Learning Resource Center Mekong Institute, Khon Kaen University, Khon Kaen 40002, Thailand s: -Mekong Institute Research Working Paper Series No. 01/ iii

5 Mekong Institute Research Advisory Committee Mekong Institute Research Advisory Committee (MIRAC) consists of a total of eleven members and representatives; six GMS researchers, three international advisors, Director and Research Manager of the Mekong Institute. The objective of the MI Research activities is to establish research profiles/ research culture and implement GMS focused researches through MIRAC and GMS researchers. The specific purpose of MIRAC is to initiate collaborative and individual country researches among the GMS countries; to build in-house research capacity of MI and GMS researchers; and to promote MI as learning and research resource oriented institute. List of Current MIRAC Members A. Regionally Known Researchers from the GMS Member Countries 1. Prof. Zhu Zhenming, Deputy Director, Institute of South East Asian Studies, Yunnan Academy of Social Sciences, Yunnan Province, China 2. Dr. Yaowalak Apichatvullop, Director, Center for Research on Plurality in the Mekong Region and Dean of Faculty of Humanities and Social Sciences, Khon Kaen University, Thailand, 3. Dr. Ngin Chanrith, Lecturer and Director, Graduate Programs in Development Studies, Royal University of Phnom Penh (RUPP), Russian Federation Boulevard, Tuol Kork, Phnom Penh, Cambodia 4. Mrs. Monemany Nhoybouakong, Director General, Environmental Research Institute (ERI), Science Technology and Environment Agency (STEA), Prime Minister s Office, Vientiane, Lao PDR 5. Dr. Bui Quang Tuan, Director, Department for Globalization and Economic Integration Studies, Institute of World Economics and Politics (IWEP), Hanoi, Vietnam 6. Prof. Myat Thein, Retired Rector of Yangon Institute of Economics, Add: No. 27/1 Shwedaunggyar Rd, Bahan Township, Yangon, Myanmar B. Internationally Known Research Advisors 7. Prof. Dr. Masaya Shiraishi, Graduate School of Asia-Pacific Studies, Waseda University, Sodai- Nishiwaseda Bldg., , Nishi-Waseda, Shinjuku-ku, Tokyo , Japan 8. Dr. Christopher Gan, Associate Professor in Economics, Commerce Division, Lincoln University, PO Box 84, Canterbury, New Zealand 9. Dr. Guy Faure, Director, Research Institute on Contemporary Southeast Asia (IRASEC), 29 Sathorn Tai Road, Bangkok 10120, Thailand C. Mekong Institute Staff 10. Dr. Suchat Katima, Director, Mekong Institute, Khon Kaen University, Khon Kaen 40002, Thailand 11. Mr. Bhoj Raj Khanal, Research Manager, Mekong Institute, Khon Kaen University, Khon Kaen 40002, Thailand -Mekong Institute Research Working Paper Series No. 01/ iv

6 TABLE OF CONTENTS 1. INTRODUCTION Why the study of Southern Economic Corridor in Cambodia? Study Objectives Characteristics of Study Sites 2 2. LITERATURE REVIEW 2.1 Overview of GMS Program GMS Economic Corridors 6 3. DEVELOPMENT CONCEPTS AND CHALLENGES OF THE SEC 7 4. METHODOLOGY AND DATA IMPLICATION OF SEC ON CAMBODIA Characteristics of Respondents Socio-Economic Implications Implication on Trade and Investment Implication on Tourism Sector Environmental Issues Social Issues POLICY IMPLICATIONS AND CONCLUSIONS 34 REFERENCES 36 APPENDIX: QUESTIONNAIRE FOR LOCAL RESIDENTS 37 -Mekong Institute Research Working Paper Series No. 01/ v

7 LIST OF BOX, TABLES AND FIGURES Box 1: Working Groups and Forums in the GMS Program 6 Box 2: Case Study on Sihanouk Ville Port Rehabilitation Workers 33 Table 1: Coverage of Southern Economic Corridor 9 Table 2: Literacy Rate of Respondents along the Economic Corridor 17 Table 3: Main Source of Income for Respondents along Economic Corridor 17 Table 4: Highlight of Geographical Location Affect to HIV Risk Situation Assessment in Cambodia 34 Figure 1: Location Map of Study Sites 3 Figure 2: GMS Economic Corridors 4 Figure 3: Routes of Southern Economic Corridor in Cambodia 10 Figure 4: Industrial Development Zones and Southern Economic Corridor 12 Figure 5: Poverty Headcount Index by Province 15 Figure 6: Illiteracy Rate by Districts 15 Figure 7: Change in Living Standard of Residents in Central Sub-corridor after Road Rehabilitation 18 Figure 8: Average Vehicle Ownership of Residents along Central Sub-corridor 19 Figure 9: Expectation of Change in Family Living Standard of Local Residents 20 Figure 10: Career Perspective of Local Residents along the Corridor 22 Figure 11: Development Needs of Local People along the Corridor 22 Figure 12: Residents Concerns about the Development of the Corridor 23 Figure 13: Cambodia s Trade with GMS Countries, Mekong Institute Research Working Paper Series No. 01/ vi

8 ACKNOWLEDGEMENTS The research team would like to thank the Mekong Institute for providing the research fund. This research would not have been possible without the kind contributions of public officials, provincial and local authorities, border officials, and members of local communities, all of whom have given their time and resources in the interview and discussion process. In addition, we would also like to thank the EIC staff for their concerted efforts in arranging and facilitating our research activities in the project. The remaining errors are our responsibility. ACRONYMS AND ABBREVIATIONS ADB ASEAN EIC EWEC FDI GMS GMSEC IOM Lao PDR MI MOE MOT MPWT NAFTA NSEC PRC SEC Asian Development Bank Association for South East Asian Nations Economic Institute of Cambodia East-West Economic Corridor Foreign Direct Investment Greater Mekong Sub-region Greater Mekong Sub-region s Economic Corridor International Organization for Migration Lao People s Democratic Republic Mekong Institute Ministry of Environment Ministry of Tourism Ministry of Public Works and Transport North American Free Trade Agreement North-South Economic Corridor People s Republic of China Southern Economic Corridor -Mekong Institute Research Working Paper Series No. 01/ vii

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10 ABSTRACT The Southern Economic Corridors (SEC), which are a component of the GMS flagship programs, were proposed as a means of stimulating economic cooperation between Cambodia, Thailand, Vietnam, and the southern part of the Lao PDR. This study attempts to identify the key development concepts behind the SEC, and to identify developmental challenges in the context of Cambodia, from which a policy framework can be drawn. It is highlighted in the report that each sub-corridor of the SEC has various development potentials, in terms of agricultural, industrial, agro-industrial, and tourism development. However, the SEC is still relatively undeveloped with regard to their physical infrastructure and other software factors. While the SEC s infrastructures are mostly in poor condition, some parts are characterized by low population density, low-skilled labor, high levels of illiteracy, and high poverty rates. In addition, majority of people and authorities along the SEC are not aware of the corridors or the GMS program and public institutional coordination is non-existent. The study also examines the potential implications of the SEC on people s livelihoods, trade, investment, and tourism. The study findings show that infrastructure development along the corridors has brought with it some improvements in people s living conditions due to expanding business opportunities. However, many people have also expressed their concerns regarding the SEC development. In terms of trade and investment, the SEC have expected to produce increased investment along their routes, resulting from better infrastructure and regulations, which in turn will help to boost trade with neighboring countries and lead to a narrowing of Cambodia s trade deficit. The development of the SEC could also lead to growth of Cambodia s tourism sector, by easing the arrival of tourists into the country and improving their access to a greater variety of destinations, leading to a more even distribution of tourism-generated income among the local communities. The study also identifies the potential environmental, social, and cultural impacts of the SEC development. Keywords: Southern Economic Corridors, Implications for Cambodia, Development Concepts and Challenge -Mekong Institute Research Working Paper Series No. 01/ ix

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12 SOCIAL AND ECONOMIC IMPACTS OF GMS SOUTHERN ECONOMIC CORRIDOR ON CAMBODIA 1. INTRODUCTION The GMS Program was established in 1992, but the concept of economic corridors is still relatively new, having gained the endorsement of the GMS countries only as recently as 2001 during the 10 th Ministerial Conference in Yangon, Myanmar. The economic corridors such as the North-South Economic Corridor (NSEC), the East- West Economic Corridor (EWEC), and the Southern Economic Corridor (SEC), are to improve connectivity through sub-regional infrastructure linkage. This regional linkage is expected to foster the sub-regions sustainable economic growth, through greater investment, increased trade, and equal sharing of the benefits among participating countries. 1.1 Why the study of Southern Economic Corridor in Cambodia? Cambodia is one of the Least Developed Countries (LDCs) in the GMS, with a share of only 2.2 percent of the sub-region s total nominal GDP in This places Cambodia second from bottom (in terms of GDP) in the sub-region, slightly above Lao PDR. With a total length of about 3,510km, the SEC extends from Thailand to Vietnam and 2,172km of the SEC s routes lie on Cambodian territory, accounting for 62 percent of their total length. Cambodia, therefore, has a major share of the corridors, which means the development and management costs of the infrastructure will be high, while the benefits derive from the corridor are still distant in the future. The success of the SEC will depend strongly on Cambodia s preparedness and readiness for regional economic integration. Compared to other GMS economic corridors such as the EWEC, which is at an advanced stage of its development including the NSEC, which is in a relatively preliminary phase, the SEC is still in its infancy, and not much attention has been paid by donors and other development agencies. Since most of the SEC development involves Cambodia, this neglect may impede Cambodia in its efforts to seize the benefits of sub-regional cooperation. The SEC is expected to bring multi-dimensional benefits to Cambodia, such as an efficient infrastructure system, the intensification of cross-border trade and -Mekong Institute Research Working Paper Series No. 01/

13 investment, as well as increased tourism, which could help to alleviate poverty. However, there are also many possible adverse impacts that could hinder Cambodia s ability to fully exploit the opportunities arising from the SEC and even exacerbate the country s economic situation if inappropriate policy framework is installed. Development has frequently includes both positive and negative consequences especially in countries that suffer from poor governance, law enforcement, and natural resource management. Cambodia is no exception. The SEC can only be beneficial and sustainable if the potential negative impacts are thoroughly addressed within the framework of developmental policies. This includes maximizing the potential benefits while minimizing the threats. 1.2 Study Objective This study examines the developmental impacts of SEC on Cambodia. This includes an analysis of the positive and negative consequences of SEC development and the impacts on Cambodia s economy. A set of policy recommendations will be put forward in accordance with the study s findings. 1.3 Characteristics of Study Sites The Central Sub-corridor is the most developed of the SEC, and is a pilot project of the Asian Development Bank (ADB). It extends from the Thai-Cambodian border in the northwest to the Vietnamese-Cambodian border in the southeast, and has a total length of 565 km. The population density along the axis of this subcorridor is the highest in the country. In addition, most of the infrastructure, particularly roads, has already been rehabilitated, though certain portions are still undergoing reconstruction. For this reason, the field survey in this sub-corridor provides an opportunity to understand the impacts of its development and lessons that can be learnt for the future development of the remaining sections. The Northern Sub-corridor, on the other hand, is the least developed, since most of its infrastructure is in poor condition, and the population density is very low. The field research in this sub-corridor was undertaken in the area between the Vietnamese-Cambodian border and Stung Treng Province, as well as some sections of National Road No. 7 (NR7) near Stung Treng Province. It is important to note that the field survey in this sub-corridor can provide another perspective on the developmental impacts of the SEC on the local residents. -Mekong Institute Research Working Paper Series No. 01/

14 Figure 1: Location Map of Study Sites Central sub-corridor Northern sub-corridor -Mekong Institute Research Working Paper Series No. 01/

15 Figure 2: GMS Economic Corridors Source: Asian Development Bank Source: Asian Development Bank -Mekong Institute Research Working Paper Series No. 01/

16 2. LITERATURE REVIEW 2.1 Overview of GMS Program The Greater Mekong Sub-region Economic Cooperation Program was established in 1992 with assistance of the ADB. The Program initially focused promoting economic and social development by strengthening economic linkages among Cambodia, Lao PDR, Myanmar, Thailand, Vietnam, and Yunnan Province of the People s Republic of China. The GMS Program is guided by mutual principles and institutional agreements compared to the strict constitution or set of by laws of other regional cooperation program such as Association for South East Asian Nations (ASEAN) and North American Free Trade Agreement-NAFTA (ADB, 2002; 2004). The main goal of the GMS program is to promote economic cooperation and integration among the six GMS participating countries in the expectation of promoting the wellbeing of people throughout the sub-region, and freeing them from poverty. The total area of the GMS is about 2.6 million square kilometers, has a total population of nearly 309 million people in Most of people make their living from agriculture. The GMS region is one of the fastest growing sub-regions in the world. In 2004 and 2005 its economic growth was robust, at nearly 8 percent. The combined nominal Gross Domestic Product (GDP) of the GMS in 2004 amounted to around US$300 billion, with an average GDP per capita in the sub-region of US$970. In 2004, the GMS s total export value reached US$135 billion, and intraregional trade among GMS countries amounted to another US$27.3 billion. Given this large trade value in the sub-region, the GMS is an attractive place for both local and foreign direct investment. It is estimated that the GMS region received Foreign Direct Investment (FDI) of around US$3.82 billion in In spite of this positive growth and development, about 17 percent of the GMS s population (about 52 million people) is still live below the poverty line. In addition, the disparities in economic development and living standards also prevail across the sub-region. By 2004, the GDP per capita in the GMS varied hugely throughout the sub-region, ranging from US$180 to US$2500. This unbalanced development poses major challenges for the GMS program. -Mekong Institute Research Working Paper Series No. 01/

17 2.1.1 GMS Priority Sectors Since 1992, the GMS countries have strengthened their economic cooperation by concentrating on nine priority sectors such as agriculture, energy, environment, human resource development, investment, telecommunications, tourism, trade, and transport. These sectors are expected to result in faster and more sustainable economic growth in the sub-region, which will in turn help to alleviate poverty reduction among participating countries. Box 1: Working Groups and Forums in the GMS Program N o Name Objectives / Activities Meeting Frequency Inception date 1 Working Group on Agriculture - Improving sub-regional cooperation in Once a year July 2002 (WGA) agriculture 2 Sub-regional Electric Power Forum (EPF) - Facilitating implementation of sub-regional power projects - Addressing hard and soft aspects of subregional power system - April Sub-regional Working Group on Environment (WGE) 4 Sub-regional Working Group on Human Resource Development (WGHRD) 5 Sub-regional Investment Working Group (SIWG) 6 Sub-regional Telecommunications Forum (STCF) 7 Sub-regional Tourism Working Group (TWG) 8 Sub-regional Trade Facilitation Working Group (TFWG) 9 Sub-regional Transport Forum (STF) - Facilitating implementation of sub-regional environmental projects - Ensuring environmental issues are addressed in other sub-regional projects - Addressing national environmental legislation and regulations in GMS - Facilitating implementation of sub-regional HRD projects - Contributing to strengthening HRD in other sectors - Investment promotion efforts - General investment facilitation - Regulatory framework for investment - Facilitating implementation of sub-regional telecom projects - Addressing facilities, regulatory and policy aspects of sub-regional telecom network - Providing guidance and support for implementation of sub-regional tourism projects Twice a year Once a year Once a year Once a year October 1995 December 1996 December 1995 November 1995 Twice a April 1995 year - Facilitating trade-related transactions Once a year November Facilitating implementation of sub-regional transport projects Once a year April Addressing hard and soft aspects of subregional transport system Source: TOR of GMS Working Groups and Forums available at Cooperation in each sector is supported by six sub-regional working groups and three forums, whose task is to foster and facilitate the implementation of each sector s projects, as well as report to the relevant GMS ministerial conferences and respective governments. These working groups and forums also provide platforms for discussion and dialogue among GMS countries, thereby enhancing cooperation (see Box 1). -Mekong Institute Research Working Paper Series No. 01/

18 2.1.2 GMS Vision and Flagship Programs The GMS countries are united in envisioning the Mekong sub-region as an integrated, prosperous, and harmonious region, free of poverty and environmentally stable. With this vision, the member countries are seeking to achieve better connectivity, greater competitiveness, and a stronger sense of community. These are known as the 3 Cs in economic cooperation. To make this vision a reality, the GMS program has identified five strategic development thrusts: i) strengthen infrastructure linkages through a multi-sectoral approach; ii) facilitate cross-border trade and investment; iii) enhance private sector participation in development and improve its competitiveness; iv) develop human resources and skill competencies; and v) protect the environment and promote sustainable use of the sub-region s shared natural resources. In pursuit of these strategic thrusts, the six GMS countries have established a set of prioritized holistic programs. These so-called flagship programs focus on eleven key areas and address both hardware and software aspects of sub-regional development. They help to link closely together all six of the GMS countries and serve to create an enabling environment for trade and investment in the sub-region. These include: a) North-South Economic Corridor b) East-West Economic Corridor c) Southern Economic Corridor d) Telecommunications Backbone and ICT e) Regional Power Interconnection and Trading Arrangements f) Facilitating Cross-Border Trade and Investment g) Enhancing Private Sector Participation and Competitiveness h) Developing Human Resources and Skills Competencies i) Strategic Environmental Framework j) Flood Control and Water Resource Management k) GMS Tourism Development -Mekong Institute Research Working Paper Series No. 01/

19 2.2 GMS Economic Corridors In their efforts to strengthen sub-regional economic cooperation, the GMS countries took the informal approach to develop the economic corridors. The investment priority in infrastructure sectors focuses on the same geographic space, maximizing development impacts while minimizing development costs. The GMS Economic Corridors (GMSEC) were established with the intention of closely intertwining the GMS countries both physically and economically. Each proposed corridor is considered to be a holistic asset, to which the change of any part might lead to unforeseen ramifications elsewhere in the corridor, or in the GMS as a whole. GMSEC is part of the flagship programs endorsed by the 10 th GMS Ministerial Conference in 2001 in Yangon, Myanmar. The idea of GMSEC directly supports the GMS vision of enhanced connectivity, greater competitiveness, and a stronger sense of community. The objective of GMSEC is to develop a highly efficient transport system, which allows goods and people to move around the sub-region without significant impediment or excessive cost/delay. With mobility improved, various activities will cluster and transforms these regions into areas of rapid economic growth. There are three designated GMSEC. First, the North-South Economic Corridor (NSEC) connects the northern and southern parts of the GMS. Second, the East-West Economic Corridor (EWEC) promotes trade, investment, and development along the east-west axis encompassing Vietnam, Lao PDR, Thailand, and Myanmar. Third, the Southern Economic Corridor (SEC) interlinks the southern portion of the GMS. Among these economic corridors, only the SEC directly impacts Cambodia. Located on and around major national roads, the SEC have a total combined length of about 3,510km, connecting Vietnam, Cambodia, and Thailand, and to a limited extent the southern part of Lao PDR. These economic corridors are expected to promote regional cooperation, foster economic integration, and support increased trade and investment, as well as facilitating exchange and development among the countries concerned, through the provision of efficient infrastructure and institutional enhancement. -Mekong Institute Research Working Paper Series No. 01/

20 3. DEVELOPMENT CONCEPTS AND CHALLENGES OF THE SEC 3.1 Extent of SEC Development The SEC consists of three main sub-corridors Northern, Central, and Coastal as well as an Inter-corridor link. Approximately 62 percent of the total length of the SEC (2,172km) lies in Cambodian territory, which means that Cambodia possesses the lion s share of the SEC. This both provides opportunities and poses challenges, since the country will be compelled to bear huge development costs, but the economic benefits are uncertain. Table 1 shows the coverage of the SEC. Table 1. Coverage of Southern Economic Corridor Corridor Name/ Unit KM Thailand Cambodia Vietnam Total Central Sub-corridor Northern Sub-corridor 300 * ** Coastal Sub-corridor Inter-Corridor Total 699 (20%) 2172 (62%) (18%) * Overlapping section with Central Sub-corridor ** 47km of which overlaps with Central Sub-corridor 3.2 Developmental Concepts of SEC Geographically, the SEC passes through a number of major international border crossings, as well as some of Cambodia s most important economic poles, linking various agricultural, industrial, and tourist hubs. The SEC not only help to foster economic integration with neighboring countries, but also play a vital role in improving connectivity within Cambodia s domestic market. While the former is attributable to cross-border infrastructure and policy improvements, the latter will be achieved through the amelioration of internal physical infrastructure and the probable intensification of economic activities along the corridor routes. The optimal functioning of the domestic market will place Cambodia in a better position when it comes to seizing the benefits derived from trade liberalization and regional integration. -Mekong Institute Research Working Paper Series No. 01/

21 3.2.1 Northern Sub-corridor Stretching from the northwest to the northeast, the Northern Sub-corridor runs through both the cultural tourism area surrounding Angkor Wat and the eco-tourism area that exists in northeastern Cambodia. It also passes through a part of Cambodia that is rich in renewable energy resources (hydropower) and abundant agricultural crops. This sub-corridor has huge potential for agro-industrial development, and facilitating the inflow of tourists from Central Vietnam and Thailand to Cambodia s northern tourism hubs. Unfortunately, it is also the least developed of all country s sub-corridors, with infrastructure improvements progressing at a sluggish pace. Figure 3: Routes of Southern Economic Corridor in Cambodia Northern Sub-corridor Tourist region Agro-Industrial & Eco-Tourist region Central Sub-corridor Inter-corridor link Industrial region Coastal Sub-corridor Source: The Study on the Road Network Development in the Kingdom or Cambodia, JICA Mekong Institute Research Working Paper Series No. 01/

22 3.2.2 Central Sub-corridor The Central Sub-corridor is strategically located, extending from Cambodia s northwest to its southeast borders. This sub-corridor covers both important agricultural zones in the proximity of Tonle Sap Lake with high population densities. The abundant human resources provide a pool of available labor resource for agricultural or industrial development Coastal Sub-corridor The Coastal Sub-corridor traverses the coastal regions of Cambodia, passing through various industrial areas and tourist spots. A number of potential industrial and special economic zones located in Koh Kong and Sihanouk Ville are situated within close proximity of the sub-corridor, linking future domestic and international industrial in these areas. The Coastal Sub-corridor has another important feature. It connects Cambodia to one of the Thailand s major industrial regions its Eastern Seaboard as well as some important industrial zones in Vietnam. The cross-border facilitation in this subcorridor allows the inflow of industry from neighboring countries, for instance, support industries for the Eastern Seaboard of Thailand. Besides potential industrial development, the sub-corridor can play a role in promoting tourism in the coastal regions of the country, especially by attracting tourists from neighboring countries to Cambodia s beaches Inter-corridor Link The inter-corridor link of the SEC connects all the sub-corridors together, thereby facilitating the interaction and exchange of economic activity across them. In addition, improved connectivity between Cambodia s northern and coastal regions will provide added impetus for growth in the impoverished north, through better access to seaports and a more even distribution of tourists throughout the country. With their strategic layout, the development of the SEC will vitalize the economic development of Cambodia. By linking the growth pillars of Cambodia, the SEC will promote the development of the agricultural, agro-industrial, industrial, and tourism sectors. The SEC will also provide an enabling playground for domestic and foreign direct investment in Cambodia. However, the development of the -Mekong Institute Research Working Paper Series No. 01/

23 corridors, though a necessary but not sufficient condition to increase investment without improvements in the infrastructure of the areas or the amelioration of various associated software factors. Figure 4: Industrial Development Zones and Southern Economic Corridor Source: Ministry of Commerce, Cambodia; Development Challenges Despite the potential tremendous benefits from the development of the SEC, Cambodia still faces a number of challenging issues relating to the development of the SEC. Without appropriate action, those challenges are likely to place obstacles in the way of the country fully exploit the potential opportunities the corridors have to offer. The dominant and pervasive challenges of the SEC are poor physical infrastructure, low population density in the influence areas, high illiteracy levels, low-skilled labor force, poverty along the corridors, low public awareness, and insufficient institutional coordination Weak Infrastructure The major infrastructure along the SEC and other social and economic infrastructure in the areas are not comparable to those of the neighboring countries. -Mekong Institute Research Working Paper Series No. 01/

24 All existing roads along Cambodian sections of the corridors are two-lane carriageways, while 97 percent in Thailand and 50 percent in Vietnam either have been upgraded or are being upgraded to four-lane highways. Moreover, three major missing links have been identified along the SEC routes in Cambodia, i.e. a 383km section of road, a Mekong bridge in the Northern Sub-corridor (Stung Treng), and a Mekong bridge in the Central Sub-corridor (Prey Veng). Beside the main network of roads, rural roads and electricity supplies in most SEC areas are below acceptable standards. While nearly all rural roads are unpaved and most are hardly accessible during the rainy season, access to electricity by rural households remain at less than 9 percent, due to the limited extent of the power grid and high tariffs. The field survey along the corridors reveal that although infrastructure development is taking place, the poor condition of rural roads and the time required to traverse them remains a major obstacle to local residents wishing to access basic public services such as education or healthcare. In terms of electricity, about 40 percent of interviewed households, especially in urban or more densely populated areas, were connected to either their provincial or district grid, while the remainder use batteries or their own generators for electricity. In addition to the lack of a power supply network, the price of electricity varies from one area to another along the corridors, ranging from US$0.15/kw in border areas to US$0.75/kw in areas nearby provincial towns, which is expensive compared to neighboring countries. While the deplorable condition of rural roads make it difficult for local communities to exploit the opportunities offered by the SEC, the poor electricity supply will further slow down the development of the areas adjacent to the corridors, making it unlikely that the private sector will grow. Thus, the surrounding infrastructure, specifically rural roads and electricity needs to be upgraded in order to improve the living conditions of the people living in the areas Low Population, Low-skilled Labor, and High Illiteracy Another challenge for the development of the SEC in Cambodia is that some sections of the corridor, particularly the Northern and Coastal Sub-corridors, run through isolated and low-populated rural regions. The population density in some of these areas is below 50 persons/km2, compared to the national average of 76 persons/km2. This leads to high development costs, and makes it difficult to initiate private sector development in these areas. Moreover, the regions surrounding the SEC are characterized by low-skilled labor and a high rate of illiteracy. According to Commune Database, the illiteracy rate among 15-years old and above in the -Mekong Institute Research Working Paper Series No. 01/

25 communes along most sections of the Northern and Coastal Sub-corridors is very high, ranging from 20 percent to more than 50 percent. Most people in those areas make their livings mainly from subsistence agriculture, requiring low levels of skill and technology. Furthermore, undiversified economic activities have made illiteracy a determinant factor, leading to an unskilled labor force in the SEC areas. This lack of skills and basic knowledge among the local population mean that they will not benefit from value-added activity, particularly from the industrial and tourism sectors, which could potentially develop along the corridors. High illiteracy rates, coupled with a low-skilled labor force have made the regions along the economic corridors less developed and unattractive for investment. Thus, the enhancement of educational provision, including basic technical and managerial skills training at local community level along the SEC is crucial High Poverty Rate The high poverty rate and low level of economic development in many areas along the SEC, especially in the northern region poses great challenges to the government. According to Poverty Profile of Cambodia 2004, the poverty rate in the provinces around the Northern Sub-corridor, such as Rattanakiri, Mondulkiri, Stung Treng, Kratie, Preah Vihear, Siem Reap, and Kampong Thom, is more than 50 percent, which is higher than the national average of 36 percent. This pervasively high poverty rate is a major underlying impediment to the development of the Northern Subcorridor, as no one area can serve as a dominant economic engine. While Siem Reap, with its major tourist attractions, should be a growth zone, the province still has a poverty rate of more than 50 percent, which is one of the highest in Cambodia. Thus, Siem Reap can hardly be considered as an economic engine for the SEC, if high levels of tourism are unable to contribute significantly to poverty reduction and economic development in the province. These challenges need to be addressed if Siem Reap is to realize its potential and become an economic engine of growth. -Mekong Institute Research Working Paper Series No. 01/

26 Figure 5: Poverty Headcount Index by Province Otdar Mean Chey Stueng Traeng Banteay Mean Chey Preah Vihear Siem Reab Rotanak Kiri Bat Dambang Krong Pailin Kampong Thum Kracheh Mondol Kiri Pousat Kampong Chhnang Kampong Cham Kaoh Kong Kampong Spueu Phnom PenhPrey Veaeng Kandal Svay Rieng Kampot Takaev Krong Preah Sihanouk Krong Kaeb Province Poverty Headcounter Index (%) Less than 5% 20% to 30% 30% to 40% 40% to 50% 50% and above Source: Poverty Profile of Cambodia, 2004 Figure 6: Illiteracy Rate by Districts Source: Commune Database, Seila Low Public Awareness and Institutional Coordination -Mekong Institute Research Working Paper Series No. 01/

27 Low public awareness of the corridors and a lack of coordination mechanisms at meso-level challenge the development of the SEC in Cambodia. The field visit along the Central and Northern Sub-corridors revealed that 93 percent of respondents have never heard about the GMS program or the economic corridors. This low level of awareness limits people s participation and involvement in the development of the SEC, in terms of their preparation for the challenges from the economic corridors. They may be incapable of exploiting the opportunities that are likely to be generated by the development of the SEC. In addition to the limited awareness of local people, it is also noted that provincial governments located along the SEC seem to know little about the corridor. For example, local governments do not have clear development initiatives vis-à-vis the SEC, which undermines their development process. Moreover, cooperation among public institutions in the provinces along the SEC, regarding their development, is extremely weak if nonexistent. As a result, harmonized policies capable of grasping the potential windfalls arising from the economic corridors cannot be drawn up. Clearly, disseminating information among the public and enhancing institutional cooperation among provinces along the SEC are crucial steps towards their optimal development. 4. METHODOLOGY AND DATA A field survey and personal in-depth interviews were conducted. The field survey involved a set of questionnaires used to survey people living along the corridors, and personal in-depth interviews were conducted with local and provincial authorities, as well as border officials. The research team chose the Central and Northern Sub-corridors of the SEC as the study sites to maximize the resource constraints of the study. A structured interview was conducted among heads of households living along the economic corridor. The total sample size is 317, with 90 respondents living in the Central Sub-corridor and 227 respondents in the Northern Sub-corridor. The surveys in the Central Sub-corridor and the Northern Sub-corridor were conducted in September 2006 and the February 2007 respectively. -Mekong Institute Research Working Paper Series No. 01/

28 5. IMPLICATIONS OF SEC ON CAMBODIA 5.1 Characteristics of Respondents There are more male respondents than female respondents, 83% and 17% respectively. The average household size along the Central and Northern Subcorridor is 5.6 compared to the national average of about five. In terms of literacy, approximately 73 percent of the respondents can read and write. The literacy rate among female household along the corridor are lower than male household. According to the survey, about 79 percent of male household heads are literate, compared to 40 percent of women household heads (see Table 2). Table 2. Literacy Rate of Respondents along the Economic Corridor Sub-corridor Gender Able to read and write Unable to either read or write Able to either read or write Male 95% 4% 1% Central Sub-corridor Female 67% 27% 7% Total 90% 8% 2% Male 74% 21% 5% Northern Sub-corridor Female 29% 63% 8% Total 66% 28% 6% Male 79% 16% 4% Total Female 40% 53% 8% Total 73% 23% 5% Source: EIC s survey, September 2006 and February 2007 Most respondents along both of sub-corridors are small businesses owners or working on agriculture. Forty-four percent of the respondents derived their income are from small businesses and 37 percent from agriculture (see Table 3). While having small business along the road is a major source of income for most of residents in the Central Sub-corridor, agriculture seems to be predominant in the Northern Subcorridor. This is due to the fact that there is more varied economic activity in the Central Sub-corridor than in the Northern one which is surrounded by forest, natural resources, and farmland. Table 3. Main Source of Income for Respondents along Economic Corridor Corridor Agriculture Business Worker Other Central Sub-corridor 8% 82% 1% 8% Northern Sub-corridor 49% 28% 13% 9% Total 37% 44% 10% 9% Source: EIC s survey, September 2006 and February Socio-Economic Implications -Mekong Institute Research Working Paper Series No. 01/

29 The socio-economic situation of the people living along the corridors has improved in recent years. The results described below are based on the field surveys in the most developed (Central Sub-corridor) and the least developed (Northern Subcorridor) parts of the SEC Pre- and Post- Analysis of Socio-Economic Change Majority of respondents (94 percent) reported that the general economic situation along the corridor has improved since the infrastructures were upgraded. Economic activities have increased such as better transportation, increase in tourists, etc., which have contributed to the local residents earning opportunities. The local residents living along NR1 (in the Central Sub-corridor) reported on how the road improvements have changed their living conditions. Of those interviewed, 70 percent claimed that their living standards have improved, 23 percent say there are no changes and 7 percent complained of being worse off. Some resident perceived their living standards to have remained static, or even become worse since the improvement of the local infrastructure, which could be result from increasing competition among their neighbors who also started business activities along the newly rehabilitated road (see Figure 7). Figure 7: Change in Living Standard of Residents in Central Sub-corridor after Road Rehabilitation Worse 7% The same 23% Better 70% Source: EIC survey, September 2006 Changes in vehicle ownership reflect the socio-economic transformations that have taken place along the corridors since the development. According to the survey, the average vehicle ownership for households along the Central Sub-corridor during -Mekong Institute Research Working Paper Series No. 01/

30 the past three years has increased from 0.79 (Bicycle), 0.75 (Motorbike), and 0.07 (Car) in 2004, to 1.09, 0.98 and 0.13 in 2006, respectively (see Figure 8). Figure 8: Average Vehicle Ownership of Residents along Central Sub-corridor 1.2 Number of Vehicles Source: 0 EIC survey, September 2006 and February Bicycle Motorbike Car Source: EIC survey, September 2006 and February 2007 The increase in average vehicle ownership indicates the improvement in living standards of the residents living along the corridors, much of which is a result of infrastructure development. General comments from local residents Since the roads have been rehabilitated, my living standard is better off because there have been more travelers along the road, and my business has improved, said a small grocery vendor along NR Expectation of Socio-Economic Change According to the survey, 91 percent of respondents expected infrastructure rehabilitation to improve their living standards because of better regional interaction, increasing numbers of travelers and tourists, new opportunities arising from expanding business activities, and other investment taking place along the subcorridors. However, 8 percent of the respondents believed their living conditions would remain the same, while a further 1 percent felt that they would be worse off after the development of the sub-corridors. By comparing the expected changes with actual changes in living standards along the sub-corridors, more than 90 percent of the households who have not experienced any development impacts expect to benefit from infrastructure -Mekong Institute Research Working Paper Series No. 01/

31 improvements along the corridors, and 70 percent of those who have experienced the development impacts claimed to be better off (see Figure 9). This shows that the importance of infrastructure improvements in improving the economic livelihoods of the local residents. Figure 9: Expectation of Change in Family Living Standard of Local Residents Same 8% Worse 1% Better 91% Source: EIC survey, September 2006 and February Access to Public Services and Markets In parallel to the improving economic situation in the SEC areas, access to basic healthcare, education, and markets has also improved during the past three years due to the road improvements and the development of public service facilities. The field survey revealed that the average time required to reach local healthcare services has fallen by about 30 percent, while travel times to schools and markets are down by about 40 percent. Thus, the local residents located along the corridors recognize that better access to public services and markets have significantly improved their livelihoods and general welfare. -Mekong Institute Research Working Paper Series No. 01/

32 5.2.4 Local Career Perspective Sixty four percent of the respondents are small shop owners along the Central Sub-corridor and 50% are farmers along the Northern Sub-corridor. The dominance of small business owners in the former is due to greater movement of people and more economic activity along the Central Sub-corridor compared to the impoverished Northern Sub-corridor. Majority of the interviewed respondents did not have any particular initiatives regarding their future career or the development of their business, in spite that the potential benefits from the development of the corridors. The respondents did not appear to have any specific plans regarding what they will do in the postdevelopment period. Many preferred to take a wait-and-see approach. General comments from local residents I have no idea whether I will change my career as I do not know how this corridor will be developed in the future. Thus, I will wait for the actual development to take place, said a farmer living along the corridor. Most of the interviewed residents were reluctant to switch jobs or start new business ventures, since they could not foresee what the effects of the corridors development would be like. In addition, a lack of capital or skills reduced their viable options. However, it is worth noting that those who did possess some technical skills anticipated using them to their advantage in the post-development period. According to the survey, about 70 percent of those interviewed showed an interest in owning a small business or expanding their current one post-development period. In addition, 12 percent of respondents will expand their agricultural activities and 9 percent expect to work in a factory if available. This shows that the SEC routes can be potential business gateways for local residents living along the routes. General comments from local residents: I would work in the factory, if there are factories here, as I have mechanic skill, says a street vendor in the Central Sub-corridor in Banteay Meanchey. -Mekong Institute Research Working Paper Series No. 01/

33 Figure 10: Career Perspective of Local Residents along the Corridor Start small business and expand business 69% Expand agriculture activities 12% Factory employee 9% Other 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percentage of Respondents Source: EIC survey, September 2006 and February Development Requirement along the Corridor The results of the field survey show that the types of development along the corridors include prime infrastructure such as main roads and power grids. Nearly 90 percent of those interviewed reported that such development should be given top priority since it has direct impact on their livelihood. In addition, 74 percent of respondents would welcome manufacturing industries in or nearby their community. These industries would provide local job opportunities and reduce the need of the residents to migrate. In addition, 45 percent of the respondents believed that improvement in rural infrastructure as well as basic education and healthcare should be addressed whilst developing the corridors to improve rural livelihoods. Figure 11: Development Needs of the Local People along the Corridor Road, electricity infrastructure 88% Factories and manufacturing 74% Irrigation and rural infrastructure at the region along the corridor 45% Health and education infrastructure 37% Agriculture technical assistance 15% Labor force training and local capacity building Public institution arrangement and management 12% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of Respondents Source: EIC survey, September 2006 and February Concerns Regarding Corridor Development -Mekong Institute Research Working Paper Series No. 01/

34 Although the local residents are enthusiastic about the potential benefits of the corridors, they also raise concerns related to the development. According to the survey, local residents along the corridors have similar concerns in terms of social issues in their locality as they do for the country as a whole. For example, 70 percent of the respondents expressed concern that the road improvements along the corridors may lead to an increase in traffic accidents; and more than 40 percent of the respondents worried human and drug trafficking activities may also increase (see Figure 12). General comments from local residents: Since the road is rehabilitated, traffic accidents have remarkably increased. I am really concerned about this problem., says a woman living along the Central Sub-corridor. Figure 12: Residents Concerns about the Development of the Corridor Traffic accident 70% Human and drug trafficking 42% Environment and natural resources 31% HIV/AIDS 26% Other 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percentage of Respondents Source: EIC survey, September 2006 and February 2007 In addition, as many as 31 percent of the respondents were anxious regarding the potential damages to the local environment and natural resource degradation resulting from the development of the corridors. This should serve as a warning to the government to monitor environmental issues such as deforestation, air and water pollution, and land quality degradation, etc. while developing the corridors. Interviews with local authorities along the corridors indicated that they suffer from a lack of knowledge regarding environmental standards, and seemed to have little interest in how environmental issues might affect their communities. Finally, HIV/AIDS transmission was also a major concern among those interviewed because the development of the corridors would probably lead to increase of newcomers and travelers and prostitutions. -Mekong Institute Research Working Paper Series No. 01/

35 There are mark differences in terms of the residents concerns between the Central and Northern Sub-corridors. While most residents in the former are concerned about human and drug trafficking (68%), followed by traffic accidents (33%); and the residents of the latter seemed to be worried about traffic accidents (85%) and environmental damage (36%) in their areas in the post-corridordevelopment period. These differences can be explained in terms of the contrasting stages of development of the two sub-corridors. The Central Sub-corridor has undergone a longer period of development than the Northern one; therefore, most people are quite familiar with the increased traffic that has been generated by the new infrastructure. The improved infrastructure provides access to neighboring countries thereby increasing the numbers of trafficking crimes. However, most of the people in the Northern Sub-corridor voice their concerns over a possible increase in traffic accidents post-corridor-development period. 5.3 Implication on Trade and Investment The GMS is a fast-growing sub-region and it is no surprise that intra-regional trade among the six GMS countries increased from US$41.3 billion in 2003 to US$54.6 billion in 2004, an equivalent of 32 percent increase in trade value. In spite of the large value in trade, there continues to be a huge disparity between GMS countries in terms of their total share of the intra-regional trade. For example, only three of the GMS countries, namely China, Thailand, and Vietnam make up about 90 percent of intra-regional trade, whereas Cambodia, the Lao PDR, and Myanmar, account for only 10 percent of intra-regional trade. Cambodia s contribution to total sub-regional trade has been relatively small (1.8%) and the country s share of intra-gms trade has been very modest. The contribution of Cambodia to intra-gms trade was only 2.6 percent in 2004, increased to 3.2 percent in 2005, making Cambodia the second smallest trader after Lao PDR. This small share of trade within the GMS reflects the uneven economic impact of Cambodia on the sub-region. In addition, 95 percent of Cambodia s trade with other GMS countries involved imports leading to a large trade deficit between Cambodia and those nations. In 2004, Cambodia s exports to GMS countries amounted to only US$73 million while imports rose to US$1.3 billion. This figure represents a trade deficit of about 90 percent of total Cambodia-GMS trade the highest trade deficit in the GMS. -Mekong Institute Research Working Paper Series No. 01/

36 The sub-corridor routes passes by potential development and agricultural will help Cambodia promote its exports to the sub-region, especially its agricultural products. In the long run, however, non-agricultural exports, such as manufactured products can also be promoted once the infrastructure has been improved and the software is enhanced along the corridors. Therefore, the development of the SEC can generate opportunities for promoting Cambodia s exports to the GMS countries. However, these opportunities are highly dependent on the level of investment in the Cambodia. The inflow of Foreign Direct Investment (FDI) to the sub-region between 2000 and 2004 amounted to more than US$21 billion. Cambodia received the second smallest share of the FDI inflow of about US$131 million, equivalent to 3 percent of the total FDI in the sub-region (see Figure 13). In contrast, Thailand and Vietnam absorbed about 55 and 34 percent of the sub-region s FDI respectively, making these two countries the top FDI recipients in the sub-region. Figure 13: Cambodia s Trade with GMS Countries, Million US$ 1,400 1,200 1,255 1,344 1, Export 200 Import Year Source: United Nations Commodity Trade Statistics Database Cambodia s small share of the sub-region FDI is not surprising, since the country is non-competitive, due to infrastructure bottlenecks and inefficient institutional environment. Compared to Thailand and Vietnam, Cambodia does not have an efficient transportation system or supply of electricity. The electricity tariffs in Cambodia are more than double of its neighboring countries, and paved road density in Cambodia is seven times less than in Thailand and six times less than in Vietnam. In addition to the poor physical infrastructure, Cambodia s investment climate is still hampered by complex institutional procedures, despite efforts to reform by the government. According to World Development Indicators 2006, the -Mekong Institute Research Working Paper Series No. 01/

37 time required to start a business in Cambodia in 2005 is 86 days compared to 33 days in Thailand and 50 days in Vietnam. This slow process highlights the complicated bureaucratic system in the country which is a burden for foreign direct investment. Since the development of the SEC involves the improvement of infrastructure along the corridor routes and reduced trade costs at cross-border points, they are expected to play an important role in attracting FDI into Cambodia. In addition, the government commitment to reducing the bureaucratic hiccup is also vital in promoting FDI into Cambodia. 5.4 Implication on Tourism Sector Cambodia s tourist industry has been growing rapidly over the past decade and has become a significant source of employment and growth in recent years. Increases in tourism have been a major source of income for economy. Its average growth per annum between 2004 and 2006 was about 20 percent, which was much higher than those experienced by other sectors of the economy. In 2004, the tourism sector generated US$232 million of direct economic activity, accounting for 4.8 percent of GDP, and US$640 million of both direct and indirect economic activities (10.5 percent of GDP). This is an increase of 13 percent in In terms of employment, the sector created approximately 566,444 jobs, representing 8.3 percent of total employment in These figures show the tourism sector is an important contributor to economic growth and development of Cambodia. According to the Ministry of Tourism (MOT), the development of the SEC could help to fuel Cambodia s tourism sector in two distinct ways - attracting tourists to the country through SEC cross-border points and diversifying tourist destinations within the country through the provision of standard infrastructure along the corridors Facilitation of Tourist Inflow The SEC routes pass through all of Cambodia s designated tourism zones, such as the Angkor archeological zone, the eco-tourism zone, the Phnom Penh zone, and the coastal zone. These regions attract more tourists than any other parts of the country. Thus, the development of infrastructures along the main corridors, plus cross-border movement facilitation could attract more tourists into Cambodia by land. 1 World Travel & Tourism Council (2004). -Mekong Institute Research Working Paper Series No. 01/

38 According to the MOT, the number of tourists entering Cambodia by land accounted for about one third of the total tourist inflow into the country in Approximately 90 percent of the tourists entered the country via the cross-border points of the SEC, and as much as 30 percent tourists entered Cambodia via SEC cross-border points in This shows the importance of the SEC development in promoting tourism. The improvement of infrastructure and cross-border points will provide better connectivity between international borders and tourist sites throughout the country. These improved links between Cambodia s borders and its major tourism spots would enhance more tourists visiting the country. The Northern Sub-corridor will increase tourist inflow to the northern part of Cambodia, which is rich in cultural and historical heritage, including eco-tourism sites and the Coastal Sub-corridor which will attract more visitors to the country s beaches Diversification of Tourist Destinations According to the MOT, the SEC which encompasses all Cambodia s tourist zones offers an opportunity for sightseers to diversify their destinations of visit. The SEC could function as links between different tourist regions offering tourists alternative tourist sites. For example, the connection between the coastal area, the Phnom Penh, and the eco-tourism area via the inter-corridor link; the eco-tourism area and the Angkor area via the Northern Sub-corridor; and the Angkor area and Phnom Penh via the Central Sub-corridor, will relieve the over-concentration of tourists in a particular tourist site in the country. Recently, Siem Reap Province alone hosted approximately 50 percent of tourist arrivals in Cambodia, while other potentially attractive destinations were almost entirely neglected. According to a provincial officer, it is a lack of appropriate infrastructure to access the unexploited sites act as major impediment to increasing tourist numbers. This regionally interactive tourism will provide Cambodia with many benefits such as tourists prolonging their stays in the country and increasing income of the country which could potentially benefit the poor. 5.5 Environmental Issues Environmental degradation remains one of the most pressing challenges to the countries sharing the Mekong River. Cambodia, a country rich in natural resources, is also concerned about the environmental problems that are likely to result from the development of economic corridors. It recognized that development along the economic corridors especially the SEC cannot avoid adverse environmental impacts, -Mekong Institute Research Working Paper Series No. 01/

39 particularly in terms of damaging biodiversity and degrading natural resources. An interview with the Ministry of Environment (MOE) revealed two different aspects of environmental degradation; the first caused by the development of infrastructure, and the second by increased economic activities and investments as a result of those improvements. Some portions of the SEC s routes run through national conservation areas, including protected forests and landscapes, wildlife sanctuaries, and national parks. The sub-corridors posing the most serious threats to the environment are the Northern and Coastal ones. The Northern Sub-corridor runs through thickly forested areas in Northern and Northeastern Cambodia, as well as passing through a wildlife conservation area, which is home to several endangered species. The Coastal Subcorridor, on the other hand, bisects the Cardamom Mountains conservation areas, with their pristine rainforest and high levels of biodiversity. In addition to site clearance for infrastructure projects, the major concerns regarding potential environmental degradation are illegal logging and wildlife destruction resulting from the corridor development. According to the MOE, the improvement of infrastructure along the sub-corridors could provide better access to illegal loggers, and increased hunting for both subsistence and trade. In addition, the improvement of infrastructure may also exacerbate the current land grabbing in the country as a result of increase in land values along the corridors. It has been observed that land grabbing also contributes, to some extent, deforestation in Cambodia. Environmental degradation can be also caused by increasing economic activity along the corridors. The economic corridors attract investments and other economic activities along the transportation routes. For example, industry and agro-industry development as well as agricultural expansion along the corridors will reduce the incentive of local residents to migrate to other areas, which can reduce environmental sustainability in the region. The inflow of population to other regions could impose harmful effects on their natural resources, such as newcomers exploiting forestland to settle down, intruding on long-established local communities, thereby prompting them to resettle, which leads to further deforestation. The establishment of industry or agro-industry along the corridors may cause air and water pollution in those localities, endangering both animals and people living nearby. According to the survey, about 31 percent of the respondents voiced concern regarding the consequences of the corridors development in terms of environmental and natural resources degradation. They were concerned that solid -Mekong Institute Research Working Paper Series No. 01/

40 and liquid waste from potential industries along the corridors would be harmful to the environment as well as directly and indirectly to the health of local residents, if no appropriate preventive measures are taken. With poor law enforcement and limited environmental awareness on the part of local government officials, industrial pollution could turn out to be the most serious environmental problem in the region along the corridors. Despite these potential environmental impacts, provincial and local authorities seem to have minimal concerns of environmental destructions in the regions. 5.6 Social Issues The SEC is also likely to generate social issues from the beginning of development stage to the post-development stage. Reports from the field survey and personal interviews reveal that the social impacts associated with the SEC development include involuntary resettlement, negative repercussions for minority groups, migration, HIV/AIDS, and human trafficking Resettlement Resettlement is one of the most critical issues in infrastructure development and is considered a major concern regarding the development of the SEC, since it can result in the loss of cultivated, residential or commercial land, structure, crops, employment, etc. It is noticeable that many households along the corridors have been affected by road development projects. According to the survey, many segments of the Central Sub-corridor (NR5 and NR1) stretching from Poi Pet to Bavet, were impacted by road projects. For example, 48 percent of the respondents in the Central Sub-corridor claimed that they were impacted by road development projects, with 67 percent of them having been displaced. As for the Northern Sub-corridor (NR7 in Stung Treng and NR78 in Rattanakiri), 60 percent of the respondents were impacted with about 38 percent of those displaced by the road projects. General comments from local residents We desire good roads, thus we are glad and satisfied with the corridor development projects, say a 45 year-old woman from Svay Rieng. Although the corridor development projects had unfavorable impacts on people s previous residences and livelihoods, 90 percent of the respondents expressed satisfaction at having contributed to that development, despite receiving a very -Mekong Institute Research Working Paper Series No. 01/

41 limited amount of compensation for the loss of their property. The survey also revealed that the majority of households affected by road widening projects had been compensated with specific amount of money, supposedly in accordance with the scale of their losses. However, there have been complaints from some residents living along the sub-corridors that they felt the compensation offered was unfair, in terms of their actual loss of property, including houses, fruit trees, etc. In addition, delays in the payment of compensation have made it financially difficult for some people to relocate. General comments from local residents I already dismantled my house on the right of way, but until now I have not receive any compensation promised by the officers. I don t have money to build another house, and I have to stay in my son s house for the moment, say a resident in NR1 of Central Subcorridor Migration Migration is an integral part of development. There is a constant movement of people, moving from poor communities to rich communities, for many different reasons, according to an interview with an International Organization for Migration (IOM) official. Neither is internal migration a new phenomenon for Cambodia. People have always move from various provinces to the cities, due to lack of food security, employment opportunities, etc. Some of them are seasonal migrants. They earn a living as casual construction or agricultural laborers, after their work in the rice fields has been completed. Others are permanent migrants, often finding employment in garment factories. Many of the migrants come from provinces such as Kampong Speu, Takeo, Kandal, Kampong Cham, Prey Veng, Svay Rieng, etc. They move to Phnom Penh, and other provinces where employment opportunities in factories, construction, hotels, restaurants, etc.. Some people moved to cities in order to pursue their education, change their workplace, or adopt a new lifestyle. Interestingly, many Cambodian people even travel to neighboring countries to work, particularly to Thailand, where they are vulnerable to exploitation. According to the survey, 25 percent of the respondents along the Central Subcorridor, especially in Banteay Meanchey and Svay Rieng, reported that some of their family members have migrated to places either inside or outside the country. The survey also showed that nearly all the communities the research team visited were involved in migration to some degree, either internal or external. Significantly, both -Mekong Institute Research Working Paper Series No. 01/

42 legal and illegal emigration, especially to Thailand, has increased substantially in recent years. According to the interviews with local residents and authorities along the Central Sub-corridor, the number of people migrating away from their communities has increased substantially over the last few years; and most of the migration is for employment or study. It is often stressed that a lack of employment opportunities within the local community is one of the main reasons for migration. However, in the Northern Sub-corridor, only 4 percent of the households interviewed say that some of their family members have become a migrant. Clearly, migrating away from this region is extremely low, according to the survey, due to its long distance from the job markets in Thailand and Phnom Penh. Migration can have both positive and negative results in terms of escaping poverty or exploitation and gaining access to improved opportunities. However, increased level of migration among women and young people certainly carries with it an intensified risk that many of them could become victims of trafficking, or find themselves in illegal and exploitative work situations. In the context of the SEC development, with the ensuing improvements in infrastructure, expanding investment, and increasing economic activities, it is expected that migration to neighboring countries or to urban areas will decrease, as a result of increase employment opportunities within local communities. -Mekong Institute Research Working Paper Series No. 01/

43 5.6.3 HIV/AIDS Cambodia faces the most serious HIV/AIDS epidemic of any Southeast Asia countries. This epidemic is a major concern, affecting the men, women, and children. The highest rates of HIV transmission are in the southwest and central provinces, especially along the Thai-Cambodian border, within the SEC. It is feared by some that the development of the corridors, connecting Cambodia provinces with neighboring countries, will encourage the spread of HIV/AIDS within the country. It is believed that infrastructure development could lead to an increase in facilities such as brothels, hotels, and guesthouses providing sexual services to highway users. If this is the case, such an outcome is a serious concern, and could indeed lead to the spread of HIV/AIDS within communities along the corridors. According to the survey in Poi Pet and Bavet, the spread of HIV/AIDS along the corridor is a major concern to the local residents. They are afraid that newcomers, travelers, and tourists will bring the disease to their communities via increase in local prostitutions catering to the needs of these visitors. Some of the local residents believe that increased tourist arrivals, both domestic and international, in the country s most popular tourism sites, such as the coastal area, the eco-tourism area, and the cultural tourism area, could lead to the spread of HIV/AIDS in those regions. The minority communities within the Northeastern eco-tourism area could be considered vulnerable to the spread of HIV/AIDS from other regions of Cambodia, since most of those people are not very well-educated compared to other regions of the country. More importantly, the high density of transport movement and the major stops along the highway from Phnom Penh to Poi Pet will expose the communities along the Central Sub-corridor to HIV/AIDS transmission. Prostitution is likely to boom in along the crowded roadside areas. Increasing number of sex workers, beer promotion girls, and masseuses will cater to both the demands of locals and those in transit. This would lead to members of the local community and highway users vulnerable to HIV infection, unless strong anti-hiv/aids campaign is in place. Infrastructure improvement activities along the corridors, associated with construction projects etc., could also encourage the spread of HIV/AIDS. This is -Mekong Institute Research Working Paper Series No. 01/

44 because many seasonal workers would likely to be stationed at road construction sites. They would probably be predominantly young and sexually active, which would increase the chances of spreading the HIV/AIDS epidemic. Box 2. Case Study on Sihanouk Ville Port Rehabilitation Workers The workers come from different provinces including Phnom Penh, Kandal, Kampong Cham, Takeo, Kampong Thom, and Prey Veng. They spend over 2 months in Sihanouk Ville before the project construction. They always travel within these provinces until the project is finished. Both married and single men reportedly involved in finding sex services. When they are far from wife and family, they always spend their free time at brothels with their friends. With the beginning of the project, they often visit Karaoke lounges, drinking alcohol, and visiting brothels. Workers are high risk with transmitting STI, HIV/AIDS because of their sexual behaviors. Source: PSI Cambodia, 2002 People living in cities, towns, and provinces along the borders of Cambodia seem to be more prone to involvement with the sex services industry, and therefore are at greater risk of infection from HIV/AIDS than those in other parts of the country. Fisherman and seafarers living in seaport areas such as Koh Kong and Sihanouk Ville are worst affected by HIV/AIDS, followed by traders who live in cities, towns, and provinces along the borders, road transportation workers along NR5, NR4, NR1, NR6 and uniformed officials along the borders. People who travel or work far away from their communities are the most vulnerable to HIV/AIDS. As the development of the SEC progresses, the movement of people will increase and HIV/AIDS will also become more widely spread. It is likely that tourism sites such as Siem Reap, Preah Vihear, Ratanakiri, Mondulkiri, and some provinces located near the borders, like Banteay Meanchey, Svay Rieng, and Koh Kong, will become increasingly affected by HIV/AIDS. -Mekong Institute Research Working Paper Series No. 01/

45 Table 4. Highlight of Geographical Location Affect to HIV Risk Situation Assessment in Cambodia Geographical location People involved HIV risk situation Svay Rieng, Prey Veng and along Highway No.5 Road Construction Workers ** Phnom Penh, Kandal, Sihanoukville Garment Worker * Phnom Penh and other big cities Students and Trainees * Many cities and towns, including borders areas Sex and entertainment ***** Many cities and towns, including borders areas Male and Female Traders *** Along highway 5,4,1,6, border crossing etc Road transport workers *** Koh Kong, Sihanoukville, other ports, including border Fisherman and seafarers **** Large cities, border and tourist destinations Tourists and visitor ** Over the country, including border areas State officials ** Over the country, especially in the border areas Uniformed officials *** Over the country, especially in the border areas Private sector/businessmen ** Phnom Penh and other cities, including border areas Street children ** Source: Mobility and HIV/AIDS in the Greater Mekong Sub-region (ADB 2000) Human Trafficking Human trafficking is one of the most prevalent forms of human global exploitation today. According to the United Nations Convention against Transitional Organized Crime, "Trafficking in persons" shall mean the recruitment, transportation, transfer, harboring, or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation. Exploitation shall include, at a minimum, the exploitation of the -Mekong Institute Research Working Paper Series No. 01/

46 prostitution of others or other forms of sexual exploitation, forced labor or services, slavery or practices similar to slavery, servitude or the removal of organs. 2 Many traffickers target the poor when they recruit their victims, since they are easiest people to trick, as a result of their poverty, and their lack of education. Trafficking includes: Trafficked persons are exploited as sources of revenue by the traffickers, through prostitution, forced labor, or illegal trade in organs for transplant. The extent of human trafficking has been increasing rapidly in Cambodia. Some companies involved in recruiting people to work abroad have even been guilty in this respect. Victims are transported to their working sites, where their freedom is taken away. The traffickers ensure that the trafficked persons owe them huge debts with enormous interest payments. The traffickers insist high interest payment in order to dominate their victims, and force them to do whatever kind of work they demand. They make sure that the payment associated with this work is never sufficient to reduce the debt itself. Therefore the trafficked person is forced into working for the trafficker permanently for no money. The trafficking of women and children is usually associated with prostitution. Recruiters offer loans to poor families in order to persuade them to send their daughters to work in other parts of the country, often tricking them into believing that their daughters will be waitresses or maids. The locations which most women and children are trafficked include Phnom Penh, Sihanouk Ville, Koh Kong, Battambang, and Siem Reap, including across the border into Thailand. According to the survey, human and drug trafficking is a major concern for 42 percent of those interviewed. They fear that facilitating people s movement at the corridor borders would only facilitate human and drug trafficking from one country to another. Since Cambodia has poor law enforcement and most of its people are not well educated, it is likely that trafficking would increase. Incidents of human trafficking are often associated with border crossings, particularly Poi Pet (Cambodia-Thailand), and Bavet (Cambodia-Vietnam). The GMS Cross-border Transport Agreement (CBTA) is a compact and comprehensive 2 Combating Human Trafficking in Cambodia: Establishing A Legal Environment for the Effective Counter Trafficking Measure, Takashi Yasunobu, Mekong Institute Research Working Paper Series No. 01/

47 multilateral agreement that covers all relevant aspects of cross border transport, including the cross-border movement of persons (i.e., visas for persons engaged in transport operations). According to the CBTA, documents only need to be checked once per operation, which will benefit traffickers, making transporting their victims from one country to another a smoother process Minority Groups Cambodia, as with many other Asian nations in the region, has different ethnic minorities. Many of these ethnic groups have to accept changes, and adapt themselves the new environment to the modern world. However, most of them still cling to their ancient beliefs, customs, and traditions. They suffer from many problems, such as poor health, lack of education, and difficulties in adjusting their lifestyles to the 21 st century. There are an estimated 36 minority groups in Cambodia, accounting for nearly 4 percent of the total population, 1 percent of which are the highland or hill-tribe people. These minority groups are mostly located in four Northeastern provinces, Ratanakiri, Mondulkiri, Stung Treng, and Kratie, which the Northern Sub-corridor runs through. In Rattanakiri, almost 80 percent of the population belongs to minority groups 3. Most of these ethnic groups depend on forest resources for their livelihoods. They rely on timber and non-timber forest products for cooking fuel, building and household materials, food, traditional medicine, livestock feed, and transportation. They also depend on the forest for agricultural activities like growing crops, paddy farming, vegetable plantation, etc., which are their main source of food security. These ethnic minority groups are mostly located in the least accessible areas, geographically isolated, lack of transportation and poor access to healthcare and education services. The development of the SEC would increase new investment, especially in the ago-industry. These potential development opportunities could benefit local communities. However, they also raise many issues, especially for the minority ethnic groups, whose vulnerability could lead to them suffering because of such projects. However, such development would create better infrastructure, such as roads, electricity, health care, and educational services, which might result in social and economic benefit to all local residents including ethnic minorities. However, certain adverse impacts may occur as a result of the SEC development, such as migration and 3 Health and education needs of ethnic minorities in the Greater Mekong Sub-region, ADB, Mekong Institute Research Working Paper Series No. 01/

48 human trafficking, damage to the cultural heritage of ethnic minorities, and the disordering of their traditional societies. In addition, land would be transferred to private companies for investment in the form of land concessions, which can lead to land conflicts, and natural resource-related problems such as deforestation. As a result, this could directly damage the biodiversity and sustainability of the ethnic minority groups, who rely on forest resources for their livelihoods. In addition, people from other parts of the country are likely to move to the region along the corridor, bringing them a different culture, new customs, modern society, and civilization. This would erode the traditional cultures of the ethnic minority groups, who would probably face discrimination, and social insecurity within their own communities. It is also likely that outsiders would carry with them diseases such as HIV/AIDS, which would be extremely harmful to the ethnic minorities in these regions. An alien culture such as prostitution and gambling would invade their communities. According to the field survey in the Northern Sub-corridor, traffic accidents are also a major concern for the local residents. It is feared that these will increase affecting the ethnic minority groups who live along the improved roads. Therefore, various mitigation measures aimed at ethnic minorities should to be taken to reduce the adverse impacts of the corridor s development on the ethnic minority communities Historical Heritage According to an interview with the Ministry of Culture and Fine Arts (MCFA), the development of the SEC could also have serious impacts on historical sites, which are mostly located in the Northern part of Cambodia within the Northern Subcorridor. The major concern is the unintended destruction of cultural sites by infrastructure projects and potential increase in illegal antique smuggling. While consultation with stakeholders is essential to avert such damages, improved law enforcement and the education of local people on the preservation of historical sites will help to curb illegal smuggling. -Mekong Institute Research Working Paper Series No. 01/

49 6. POLICY IMPLICATIONS AND CONCLUSIONS The Southern Economic Corridor (SEC) in Cambodia is among the least developed GMS Economic Corridors, but is potentially the most dynamic of all. Thus, maximizing its benefits and minimizing its impacts should be a major priority of the government. Cambodia will benefit significantly from the development of their infrastructure, along with increases in trade, investment, and tourism with GMS countries. It is expected that these infrastructure improvements will contribute hugely towards the socio-economic development of the country, leading to poverty reduction, and rising living standards of the people. While there are various development zones in the SEC, such as of industry, agro-industry, and agriculture, there are also some challenges that Cambodia will have to face, as it attempts to maximize the benefits with respect to development of SEC. These challenges include the low awareness of local residents regarding the economic and social impacts of the corridors, which could inhibit their participation and involvement in the development process. Similarly local authorities who are not knowledgeable of the economic corridors could also limit development initiatives in the regions, and result in weak cooperation among public provincial institutions. According to the field survey and interviews with key informants, the SEC has numerous implications on the local communities in terms of trade, investment, tourism, the environment and social issues, and cultural heritage. The local residents along the SEC have high expectations regarding the potential benefits but most of them also express concerns regarding important issues, such as human and drug trafficking, traffic accidents, and environmental degradation. It is expected that trade and investment will increase because of the SEC development if proper policies are in place to create an enabling investment environment. The SEC is likely to contribute to the development of the tourism industry in Cambodia, in terms of facilitating tourist inflow into the country and providing tourists with greater accessible destinations. However, the development SEC also generates negative impacts such as natural resource degradation, pollution, social problems (such as resettlement), increased HIV/AIDS transmission, and adverse impacts on vulnerable ethnic groups. In addition, some archeologists are concerned about the effects of the corridors development on various historical sites throughout the country. Based on the above findings, a number of recommendations are suggested to optimize the benefits while minimizing the adverse impacts from the development of the SEC. The recommendations include: -Mekong Institute Research Working Paper Series No. 01/

50 Increase local residents awareness of the GMS Cooperation Program through the dissemination of information so that the local people can prepare themselves to seize the opportunities arising from the development of the SEC in Cambodia. Capacity strengthening in education of local residents living along the economic corridors should be enhanced, so that they will benefit from the new employment opportunities that will arise. Education on various social issues such as HIV/AIDS, traffic rules, trafficking etc. should be provided to enhance the capacities of local communities, especially vulnerable ethnic minority groups. Encourage local community participation in conserving and preserving the environment, cultural heritage, and social values of their locality. Develop rural areas in the proximity of the corridors should be addressed, especially rural infrastructure to improve the living standards of the poor. Institutional improvement and capacity building among relevant public officials at provincial level should be a priority. This will encourage corridors development initiatives, and should complement the strengthening, coordination and cooperation amongst public institutions. Measures to prevent human and drug trafficking, especially across borders. Preventative measures against the spread of HIV/AIDS in the local communities along the corridors. Policy on the resettlement and compensation of people displaced by the corridors development should be fair and speedy. The government should take greater initiative to protect the environment and natural resource. For example, laws and rules should be strictly enforced in order to minimize environmental and natural resource degradation caused by illegal logging and the trade in rare wildlife, as well as curbing the illegal smuggling of antiques. -Mekong Institute Research Working Paper Series No. 01/

51 REFERENCES Asian Development Bank (2001) Preinvestment Study for the Greater Mekong Sub-region East-West Economic Corridor, ADB, Philippines Asian Development Bank (2002) Building on Success: A Strategic Framework for the Next Ten Years of the Greater Mekong Sub-region Economic Cooperation Program, ADB, Philippines Asian Development Bank (2006) The Greater Mekong Subregion Beyond Borders ( ). Regional Cooperation Strategy and Program Update, ADB Cambodia Development Research Institute CDRI (2005) Cambodian Development Review , Phnom Penh JICA and MPWT (2006) The Study on the Road Network Development in the Kingdom of Cambodia. Draft Final Report, Cambodia Manabu, F. and Christopher, E. (2006) Impacts of Cross-border Infrastructure on Trade and Investment in the GMS. ADB Institute discussion paper no.48 Supang, C. (2000) Mobility and HIV/AIDS in the Greater Mekong Subregion. ADB Takashi, Y. (2004) Combating Human Trafficking in Cambodia: Establishing A Legal Environment for the Effective Counter Trafficking Measure. Brandeis University -Mekong Institute Research Working Paper Series No. 01/

52 APPENDIX QUESTIONNAIRE FOR LOCAL RESIDENTS General awareness of GMS 1. Have you ever heard about GMS program? Yes No 2. Do you know that you are living in the Economic Corridor of GMS? Yes No (go to Q.4) 3. If YES: - How do you get information? Media Authority Friends/relatives Other - How do you prepare yourself for the GMS cooperation program? Nothing Capacity strengthening Children education - What do you know about the development in the corridor? National road Electricity Fiber Optics EPZ/SEZ Do not know Current situation of infrastructure 4. Does your house have electricity? Yes No (Specify reason: ) (go to Q.11) 5. What is your source of electricity? Provincial grid Private grid Own generator Battery 6. What is the price of electricity per KWh? /KWh 7. How much does your family spend for electricity per month?..riel 8. What do you think about the price of electricity? Expensive Acceptable Cheap 9. Compared to last three years, what do you think about electricity situation? Better Same Worse 10. Compared to last three years, what is the price of electricity? More expensive Same Cheaper 11. Now, how much time is it required to reach the nearest health service? Mode Motorbike Bicycle Walk Car -Mekong Institute Research Working Paper Series No. 01/

53 Travel time (min) In past three years, how much time was it required to reach nearest health service? Mode Motorbike Bicycle Walk Car Travel time (min) 13. Compared to last three years, what do you think about the health service in your area? Better Same Worse 14. Now, how much time is it required to reach the nearest school? Mode Motorbike Bicycle Walk Car Travel time (min). 15. In past three years, how much time was it required to reach nearest school? Mode Motorbike Bicycle Walk Car Travel time (min). 16. What do you think about the cost of sending/having children at school? Expensive Acceptable Cheap 17. Compared to last three years, what do you think about the school service in your area? Better Same Worse 18. Now, how much time is it required to reach the nearest market? Mode Motorbike Bicycle Walk Car Travel time (min). 19. In past three years, how much time was it required to reach nearest market? Mode Motorbike Bicycle Walk Car. -Mekong Institute Research Working Paper Series No. 01/

54 Travel time (min) 20. Between development of rural road and national road, which one do you think is more important? Both National road only Rural road only 21. How do you get drinking water? Well Provincial water service Rain Pond 22. Have you ever suffered from land grabbing? Yes No - If YES, specify size of land grabbed:.. Before and After situation 23. After road is rehabilitated, what do think about your family living standard? Better Same Worse 24. Before road is rehabilitated, what were you doing? Farmer Worker Seller Other 25. What are you doing NOW? Farmer Worker Seller Other 26. If you change your career, why? More value added Easier Less dangerous Other 27. What do you think about economic situation in your area after road completion? Better Same Worse 28. Comments on situation before and after road improvement: Expectation of Before and After situation 29. After road is rehabilitated, how do think about your family living standard? Better Same Worse 30. NOW, what are you doing? Farmer Worker Seller Other 31. What will you do after road is rehabilitated? -Mekong Institute Research Working Paper Series No. 01/

55 Farmer Worker Seller Other 32. If you change your career, why? More value added Easier Less dangerous Other 33. What do you expect about economic situation in your area after road completion? Better Same Worse 34. Comments on situation before and after road improvement: Expectations and Concerns 35. Are there any of your family migrates to other place? Yes No - If YES, please specify the number: Male: Female: 36. Are there any migration in your community? Yes No 37. Do you think migration is good for your community? Yes No (Specify reason:.) 38. Compared to last three years, what do you think about migration in your community? Increased Same Decreased 39. Where do they go? Other province (Specify: ) Outside Cambodia (Specify: ) 40. What is the PURPOSE of migration? Employment Study Change living environment Follow relatives Other. 41. What is the REASON of migration? Lack of opportunity Ineffectiveness of public service at the area Geographical factors Political situation Other. 42. What development is most needed at the moment? (Can be more than 1 answer) Road, electricity infrastructure Factories and manufacturing (including agro-industry, and light industry) Agriculture technical assistance -Mekong Institute Research Working Paper Series No. 01/

56 Labor force training and local capacity building Health and education infrastructure Irrigation, agriculture, and rural infrastructure at regions along the corridor Public institutional arrangement and management Other 43. What do you want to do if economic activity is promoted in the corridor? Expansion of agriculture activities Factory employee Start small business Other. 44. What are your concerns about the development of the corridor? Labor exploitation Environment degradation and harm to natural resources Migration Human and drug trafficking Other 45. Do you support contract farming? Yes No - If YES, why? - If NO, why? Impacts 46. Were you impacted by road project in terms of resettlement? Yes No (go to Q.42) 47. Were you displaced by road project? Yes No 48. Were you compensated for the loss of property? Yes No 49. Were you satisfied with resettlement? Yes No 50. If No, why? It is lower than actual price Loss of livelihood Other I don t want to move out 51. Comment on resettlement -Mekong Institute Research Working Paper Series No. 01/

57 Socio-economic of the respondents 52. Household size: 53. Sex of household head: Male Female 54. Education level of household head: Read Write Read and Write None 55. Vehicle ownership history (specify the number): Bicycle Motorbike Car Other 56. Main source of household s income: Agriculture Business Worker Company/NGO employee Government job Other 57. Land holding size:. 58. Family expenditure: THE END -Mekong Institute Research Working Paper Series No. 01/

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