On September 08, 2010, a very importat and special event – the public lecture on Growth Strategy for Cambodia: Challenges and Opportunities – organized by World Bank (WB) was held at National Institute of Education (NIE) from 2:30 p.m. to 4:00 p.m. This afternoon lecture was presided by Dr. Justine Yifu Lin, senior vice-president and chief economist at World Bank. This public lecture was attended by many distinguised guests from different institutions and by students from many univeristies in Cambodia.

A very warm open remark was made by H.E. Phoeun Sakhena stressed the current development of Cambodia's economy and the ambition to phase out the critical and dynamic economic growth in the world. H.E. Sakhena also hoped that today's lecture might have provided many important strategies for Cambodia to have economic growth. Proudly, Her Excellecy said that Cambodia could recover positively from the 2008 financial crisis with the increase of 0.1% of GDP and that there will be more dramatic rise in the next GDP. Moreover, Her Excellency stressed the helpful missions of World Bank in terms of human resource development. "Currently, Cambodia governmant has just singed the development project with World Bank to improve the quality of high education," said H.E. Sakhena. With the warmest thanks to Dr. Justin Yifu Lin, H.E. Sakhena also briefed Dr.Lin's personal background and hoped this afternoon lecture might have helped provide many ideas for students to enhance their capacity in terms of economics.Thanking H.E. Sakhena so much, Dr. Lin optimistically said that there were a lot of well-educated young Cambodian people who are the future of Cambodia. He also said the current Cambodian situation was good and would be far better in the future. Dr. Lin sceptically thought that the Angorian economy might have been more developed than that of the West. After a short speech about the Cambodia's economy, Dr. Lin presented a number of crucial points and strategies for economic growth during his lecture.

First, Dr. Lin narrated the industrial revolutions which changed the patterns of economic structures. With no doubt, Dr. Lin said that the development of the Western countries depended on the endowment structure and evolution. For example, in the 17th century, U.S. counted mainly on the agriculture. The agricultural based economy was shifted to manufacturing production in the 19th century. With the modern technological innovation, U.S. develops its economy very fast. Therefore, the sustained economic development from a low-income status to high-income status in countries in modern times is characterized by continuous technological innovation and industrial upgrading. Although now there is still the wide income/development gap between the developing countries and developed countries, Dr. Lin is sure that those developing countries can catch up the economic development. Dr. Lin introduced key secrets of thos catch-up economies. Based on the Growth Report, the well-known characteristics of the successful economy are openness, macro stability, high savings and high investments, market mechanism, pro-active and committed government. "Openness is so important for economic growth in the globalized world," said Dr. Lin. The comparative challenges should be welcomed for the sake of economic development. Marcoeconomic stability is also the key contribution to success of development. High saving and investment provide the job opportunities, and market mechanism keeps the world economy process well with as fewer constraints as possible for furthering economic development. Committed government is also important because the regulation and attention of government could pave the way to diversify and upgrade industries and facilitate the free flow of economy in globalized world without the constraints that undermine the economic growth.

Moreover, Dr. Lin continued, "The secret can be boiled down to follow the economy’s comparative advantages to develop its industries in each stage of its development so as to tap into the potential of advantage of backwardness." This is because the economic development is continuous of structural change and because the economic structure is endogenous to emdowment structure. Plus, the comparative advantages and potential advantages of backwardness are also important for economic development. Dr. Lina also compared the economic development between the developing countries and developed countries. The key difference between them is the difference in the relative abundance of capital in their endowment structures. Developing countries have less abundance of capital than the developed countried do. Therefore, only the comparative advantage is the key to upgrade endowment structure and industrial structure.

Furthermore, Dr. Lin also gave a very interesting point about the failure of economy policy in the past. After the second World War, most governments in the developing countries adpoted and implemented the policies that supported the development of industries. However, those policies did not work out because they attempted to support industries that went against comparative advantage. This means that there were the monopolistic economy, constraints as the barriers to economic development, and governments' subsidies that harmed the economy. All of those forms of policies went opposite to the comparative advantages. Again, Dr. Lin was sure that the comparative advantage was the key for the economic development.

After introducing some strategies for economic growth, Dr. Lin also saw the positive development of Cambodia economy. However, Cambodia still suffered from the global economic trends. For example, the 2008 financial crisis hurt Cambodia because of the lack of the diversification and upgrading of Cambodian industries. Dr. Lin also suggested that Cambodia diversify and upgrade its industries for that sake of sustainable, dynamic, and inclusive economic growth in the future.

Moreover, Dr. Lin also gave a very interesting proposal for Cambodia government's consideration. This proposal consists of six major steps. First, Cambodia should find dynamic developed trading partners or reference countries with similar endowment structure and with about 100% higher per capital income such as Vietnam, Thailand, Indonesia, and Malaysia. Second, increasing and upgrading the domestic firms with no constraints are very important. Third, with only domesic firms, it is still not enough. Cambodia government should attract more foreign direct investments (FDI). Fourth, Cambodia should support the successful private innovation in new sectors. This can diversify and upgrade the firms or industries in Cambodia. Fifth, reconstructing the social infrastructure and modernizing the business environment are two important for economic success because this can bring more foreign investments in Cambodia. Finally, government may compensate the pioneer in listed diversified sectors and support those firms. Besides this six major steps, Dr. Lin also introduced some important economic concepts for the success. He said that that with comparative advantages, Cambodia should diversify and upgrade sectors: manufacturing, tourism, service, and agriculture. Dr. Lin continued that to support those diversified sectors, government should have facilitated through providing incentives and removing constraints for the growht of priority sectors. Plus, government should strengthen the research and implementate the government frameworks for the sake of Cambodia's economic development.

In conclusion, Dr. Lin said the economic development process in a low-income countries or a developing country was characterized by the continuous upgrading of its endowment structure from relatively scarce in capital and relatively abundant in labor or natural resources to relatively abundant in capital and relative scarce in labor/natural resources. Moreover, the comparative advantages and the advantages of backwardness are key importance. Committed government and its policies for industrial diversification and upgrading are also the way toward the success of Cambodia’s economy.

After the meaningful presentation, Dr. Justine Yifu Lin welcomed questions and provided clear and accurate answers for both guests and students from various institutions. This afternoon lecture was concluded with a warm closing speech of H.E. Phoeun Sakhena, followed by formal thanks to Dr. Lin for the excellent lecture and to every guest and student for participation.