How Infrastructure Reduces Rural Poverty in Cambodia

Until very recently, the direct impact of infrastructure was not perceived to be an important means for poverty reduction.  But infrastructure has multiple links to poverty reduction in Cambodia, as highlighted in the World Bank’s Annual Report 2001.

Improved infrastructure helps create jobs, raise worker productivity, and improve productivity of agriculture in the rural areas.  It saves time and human effort in transporting water/goods, crops, wood, and other commodities or supplies. It also improves health (by reducing indoor air pollution and emissions in urban areas and making clean water available) and education (by expanding access to schools). Among all types of rural infrastructure, rural transport is probably the most crucial for the livelihoods of the rural poor. It encompasses transport activities at all levels, whether local, urban and regional or national. It is composed of two elements: (1) rural transport services for passengers and freight by non-motorized and motorized means of transport, and (2) rural transport infrastructure, mainly rural roads, tracks, trails, paths and footbridges, and in some cases rural waterways/water system.

An inefficient transport system can act as a significant constraint on agriculture in rural areas, both by raising the costs and effectiveness of inputs in the production process and by delaying the sale of harvested crops. Rural children in developing countries face many problems in getting to and staying in school. The relationship between distance and schooling is particularly critical in rural areas where children must walk long distances to reach widely dispersed schools. While studies have shown that social and economic factors contribute to high drop out rates in rural areas, lack of public transportation and inability to pay for private transportation has led many rural children to abandon schooling after a few years.  Nonfarm or off farm employment provides a large share of the income of the rural poor.  But the development of nonfarm/off farm employment is often linked with infrastructure development.

Rural enterprises are often located in the areas where there is good access to roads, electricity, and availability of information area and telecommunication facilities.

Good infrastructure also provides opportunities for farmers to migrate to urban centers or regional area.

Several studies have demonstrated the direct link between rural infrastructure and rural poverty. Jalan and Ravallion (2002) find that road density has a significant positive effect on the consumption expenditure of rural farm households in poor regions of China. For every 1% increase in kilometers of roads per capita, household consumption increases by 0.08 percent. Research on Vietnam reveals that poor households living in rural communes with paved roads have a 67 percent higher probability of escaping poverty than those in communes without paved roads (Glewwe et al. 2000). Similarly, an evaluation of a World Bank-funded rural road rehabilitation project in Vietnam finds that the strongest positive impact was for poorest households (van de Walle and Cratty 2002). Escobal (2001) analyzed factors that determine market access for poor rural Peruvian farmers, showing the importance of key public assets such as rural roads in lowering transaction costs and in improving incomes of rural farmers.

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