A downside to economic success

Experts warn that Cambodia’s imminent move up to lower-middle income status could lead to a drop in foreign aid and economic assistance

For more than two decades, Cambodia has notched up stunning economic growth, while efforts to alleviate poverty and increase industrial activity are beginning to pay dividends. If it continues on course, the county is set to make the transition from a least developed economy (LDC) to a lower-middle income country by next year.

While the status upgrade would affirm Cambodia’s economic openness, higher wages and increasing foreign investment, it could also lead developed countries to scale back their foreign aid and economic assistance, economists warn.

As per the World Bank’s criteria, a least developed country has a gross national income (GNI) per capita of less than $1,045, middle-income countries are in the range of $1,045 to $12,746, and high-income countries are above that level.

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