Getting out of Poverty. The Cambodian Way

Ross Badger, has been spending time every year in Cambodia since 2003 helping Tabitha Cambodia, one of the many charitable organisations in Cambodia that are helping with water well projects. Tabitha Cambodia are the counterpart based in Cambodia for Lotus Relief Charitable Trust of which Ross Badger is a trustee.
Ross writes:

The poorest of the poor in Cambodia, in addition to lack of food, do not have easy access to water. Tabitha Cambodia, through their innovative micro savings scheme, is helping families buy much needed water vats. Tabitha reaches into the villages through representatives who encourage the families to save for a particular item which would enhance and improve their lives. More often than not the first item for which they save, over a 10 week cycle, is a water vat to store water which they have, in many cases, walked or cycled many miles to get.

Each week they save a small amount of money which is collected. The savings are not deposited in a bank but kept in cash by Tabitha as the families prefer to trust them rather than the banks! This is interesting bearing in mind the current state of the worldwide banking sector.

At the end of the 10 week cycle Tabitha gives, through its funders, interest of 10%. Together with the savings, and the interest added, the family buys the item which they had wanted. This is the start of the road out of poverty. The families then start another 10 week cycle to purchase another item that they need.

Savings culture

It’s hard to imagine how families, which on average have between six and eight people, can on such small amounts of money earned actually save but it is possible. It is a rule that once the funds have been saved they must purchase the item that they have saved for. In addition to placing a discipline on the family to meet their wishes / desires it also helps the economy as the Cambodians are spending and putting money back into the system.

This savings culture, rather than looking for handouts or borrowing to fund their needs, gives back to the families their dignity and self esteem. As another item is purchased the whole family can see the benefit which encourages them to save even more and purchase more necessities. This is in contrast with what has happened more recently in developed countries in that these Cambodians are adopting a savings culture rather than a borrow and pay back later culture.

The benefits are immense

Living in only small thatched huts some families get together to start saving for a water well. The costs of a water well can be between $100 to $250 depending on the land and how difficult it is to drill the well. Tabitha helps with this funding through its own programs. However families must contribute at least $25 / $30 towards the well.

This makes the families feel good in themselves that they have contributed. The benefits of the water well are immense. Once a family has access to a water well they are able to grow vegetables and rice that they can use for their own consumption as well as sell at the local market. The water also helps to improve hygiene and as a result their overall health improves and the need for medical attention reduces.

The additional income that the production of vegetables and rice generates enables them to buy say 10 small chickens at a cost of $5. The water enables them to feed the chicks and once they are fully grown they can be sold for as much as $10 each at the local market, thus generating $100. The $100 can then be used to purchase two piglets at a cost of $50 each. The water from the wells and crops grown once again allows them to feed the piglets to a size where one can be sold at the market for anything up to $150. The other pig is retained for breeding. The breeding pig can produce up to six piglets at a time which eventually can be sold once they have grown for $150 each i.e. $900. This cycle lasts about six months and this level of income increases the families’ income from $1 to $4 / $5 a day. In percentage terms this is a substantial increase.

The water is also used to fill reservoirs in which families can breed fish for both their own consumption and to sell. In the past families have only been able to grow one crop of rice a year but due to the water wells and the benefits of the savings programme they have been able to increase this to two crops a year. As families increase their profits, many save to improve their housing. They save through the savings programme up to $50 to purchase a house. Tabitha operates house building programmes which encourage individuals from developed countries to come to Cambodia to assist in this house building.

Cambodia – from prosperity to peasantry

With the deepening global economic financial crisis in developed countries and with the continuing credit crunch this can only mean more unemployment, less available credit and as a result the inevitable reduction in standard of living. It may be that Westerners will start to encounter poverty on a scale which they have hitherto not experienced for a number of decades.

The lack of employment and the tightening of credit paints a bleak picture for the future. History is littered with examples of this and it is not a unique experience. Cambodia suffered this fate over 30 years ago.

The reason was not to do with the global economy or tightening of credit but the result of the atrocities of the Kymer Rouge regime under the control of Pol Pot which ensured that many millions of Cambodians would suffer poverty for many years to come. In fact it is only now, some 30 years after the atrocities, that some of the people involved are being brought to justice.

Pol Pot’s intention was to transform Cambodia, which leading up to 1975 was a relatively prosperous country, into a peasant community. To achieve this he evacuated all urban areas, abolished the monetary system, abolished foreign trade and attempted to eradicate history and learning. He tried to make the country self sufficient on agricultural production. The atrocities of that regime and the resultant loss of life through genocide, starvation and illness have been well documented. The survivors of the regime when it ended were left with a broken economy and on a personal level they were left without possessions, homes, self esteem and no “normal” means of survival. It has been a long and difficult process but the poorest of the poor Cambodian’s who earn less than $1 a day are slowly and gradually trying to claw their way out of poverty. Cambodia has had to try to rebuild their lives as well as their broken economy. For Westerners it is difficult to comprehend how this is possible when starting with so little.

Whilst it is still hard to imagine how to support a family of eight people on such levels of income the poor Cambodian’s are at least seeing a light at the end of the tunnel. It is hoped that the financial crisis in the developed countries won’t reach this level but if they do then at least they can gain some advice from the Cambodian experience.

Ross Badger