On September 8, 2010, Dr. Justin Yifu Lin, Senior Vice President and Chief Economist of the World Bank, gave a lecture to Cambodian students and researchers. The lecture covered “Development Strategies and Their Challenges,” and paid particular attention to various growth strategies for Cambodia.
Dr. Lin wanted to share his extensive knowledge and experience of development, economic growth and its challenges. He was also interested in learning from the perspectives of Cambodians and their views on the country.
In his lecture, he pointed out that the “secret of those catching-up economies,” according to the Growth Report, are: openness; macro-stability; high savings and high investments; market mechanism; and pro-active and committed government. Dr. Lin also stressed that economic development is a continuous process of structural change, and is the fastest way to upgrade the endowment structure, and thus the industrial structure. He uses the history of economic development in the US as an example, dating back to the 1600s. America transformed from a simple agrarian-based economy to an economic powerhouse at the forefront of technology and financial growth.
Dr. Lin then asked, “How do you design the right industrial policy?” In answering this question, he identified six crucial steps: 1) find dynamic growing countries and identify tradable industries; 2) find private domestic firms and identify and thus remove constraints; 3) seek FDIs from those countries; 4) government should find private enterprises; 5) create special economic zones or industrial parks for countries with poor infrastructure; and 6) government should compensate firms with tax incentives for a limited period, direct credits for investments, and access to foreign exchanges.
He concluded the lecture by saying that Cambodia can sustain rapid growth, because it has many unique advantages, including dynamic growing neighbors, competent and committed government, and natural resources. Representatives from the University of Cambodia participated in this lecture.
