Cambodia’s urbanized population is expected to reach 36% by 2050, according to the World Bank. According to the bank’s estimates, “Cambodia’s rate of urbanization is lower than what can be expected for its GDP”.
January 2021 figures from the data portal showed that Cambodia’s urbanized population stands at 24.5%, compared to a global urbanized population of 4.35 billion people, or 56%.
For more context, countries with similar levels of GDP to Cambodia, such as Bangladesh and Kyrgyzstan, have an urbanization rate closer to 35%.
The newspaper, What is driving urbanization in modern Cambodia? Some counter-intuitive results is written by Partha Gangopadhyay, Siddharth Jain and Agung Suwandaru. Their analysis
uncovers some fascinating features of foreign direct investment and its impact on urbanization in Cambodia.
They note that in the short term, “if FDI increases by 1%, urbanization increases by 0.36% in Cambodia. If FDI decreases by 1%, urbanization still increases by 0.34%.
They further noted that the long-term cumulative effect of a “1% increase in FDI corresponds to a 0.57% increase in urbanization, while the effect of a 1% decrease % of FDI increases urbanization by 1.80%”.
This means that a 1% decrease in FDI over a long cumulative period (period not specified) led to an increase of almost 2% in urbanization. The reason is explained as follows.
“The rationale for this finding is that an increase in FDI should enhance the pull factors for rural-urban migration, while a decrease in FDI will impoverish the economy to favor the push factors for rural-urban migration. urban”.
FDI has become an essential source of livelihoods for Cambodians, spurring rural and semi-urban households to invest in human capital formation.
On the other hand, a decline in FDI forces skilled migrants to return to their rural bases, which functions as a “push factor” for unskilled and semi-skilled workers who migrate to urban areas in search of better work opportunities and recover the loss of family income, due to the return of a qualified family member.
Phnom Penh has experienced significant urban growth over the past decade, with its population
now sitting at around 2.2 million people, according to worldpopulationreview.com. It is the largest and most dynamic city in the country and serves as the gateway to the