Poverty Gap in Cambodia: A Growing Concern for Business and Social Development.

The widening gap between the rich and poor in Cambodia has raised alarms among business leaders, investors, policymakers, and social development advocates. While Cambodia has experienced remarkable economic growth over the past two decades, income inequality remains a persistent challenge, creating socio-economic barriers that affect business sustainability, investment opportunities, and overall development.

The Growing Divide

A recent Oxfam report has highlighted a global trend in which the wealthiest individuals continue to accumulate vast amounts of wealth, while those living in poverty struggle with rising living costs, debt burdens, and limited opportunities. Cambodia mirrors this global issue, with the disparity between the affluent and the underprivileged becoming more pronounced.

The report revealed that in 2024, the world saw an increase in billionaires, with their collective wealth rising by $2 trillion. In Cambodia, economic growth has not translated into equitable wealth distribution, leaving vulnerable groups, particularly informal workers, in precarious financial situations.

Income Inequality in Cambodia

Despite steady economic expansion, the reality for many Cambodians remains challenging. The official minimum wage for garment workers in 2025 is set at $208 per month—far below the demands of labor unions and insufficient to keep pace with inflation and rising living costs. This issue is further exacerbated by wage disparities across sectors, particularly affecting women in tourism and construction, who often earn $5 less per day than their male counterparts.

According to the Ministry of Labour and Vocational Training, Cambodia’s economy grew by 5.3 percent in 2024, with garment and manufacturing exports increasing by 23.5 percent. Over 100 new factories were established, generating over 100,000 new jobs. However, these economic gains have not significantly improved the financial security of informal workers, who earn around 30,000 riel ($7.80) per day—barely enough to sustain a family.

Challenges Faced by Informal Workers

Informal sector workers, including food cart vendors, market sellers, and construction laborers, face multiple hardships, including:

• Declining income levels and job security
• Mounting debt from microfinance institutions and informal lenders
• Loss of land and property due to weak social justice protections
• Health risks and lack of adequate healthcare
• Psychological stress due to economic pressure and unstable living conditions

According to Vorn Pov, President of the Independent Association of Informal Economics, the absence of business opportunities and social justice perpetuates economic disparity in Cambodia. He argues that while wealthier individuals benefit from government support and land concessions, the poor are often excluded from economic growth and struggle to maintain stable livelihoods.

Government and Policy Responses

The Cambodian government has implemented various initiatives to address poverty and promote economic growth, including:

• Expanding vocational and technical training programs
• Collaborating with private enterprises to create job opportunities
• Strengthening the National Social Security Fund (NSSF) for informal workers
• Encouraging foreign investment to boost industrial growth

However, experts argue that these measures are insufficient without a concrete policy on a national living wage. Khun Tharo, Programme Manager at the Centre of Alliance of Labour and Human Rights (CENTRAL), emphasized that many workers depend on overtime and additional benefits to make ends meet, leading to increased stress and mental health issues.

Key Recommendations to Reduce the Poverty Gap

To achieve more inclusive economic growth and reduce the poverty gap, stakeholders must focus on the following key actions:

1. Establish a National Living Wage – Conducting a comprehensive study on living costs and implementing a wage policy that ensures a dignified standard of living for all workers.
2. Enhance Social Protection – Expanding access to healthcare, education, and housing assistance for low-income individuals.
3. Promote Business and Investment in Vulnerable Communities – Encouraging entrepreneurship and SME growth to create sustainable employment opportunities.
4. Strengthen Social Justice and Governance – Implementing policies that protect vulnerable groups from land dispossession and financial exploitation.
5. Support Gender Equality in the Workplace – Bridging the gender wage gap and ensuring fair compensation across all industries.

Conclusion

Cambodia’s economic growth presents significant opportunities for investment and business expansion, but the growing poverty gap remains a critical issue that must be addressed. For businesses, investors, and policymakers, ensuring economic inclusivity is not only a moral obligation but also a strategic necessity for long-term stability and development. By implementing policies that promote fair wages, social justice, and equal opportunities, Cambodia can work towards a more balanced and prosperous future for all.

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