The Urgent Need for Structural Reform: What—and How?

Structural reform has become one of the most discussed—and most misunderstood—topics in Cambodia today. I do not intend to debate specific policy positions or promote any particular reform agenda. Instead, I offer a reflection drawn from experience—one that may be relevant to the current national conversation.

My central argument is simple: structural reform cannot rely on good ideas alone. It must also be practical, context-sensitive, and correctly timed. Without these elements, even the most morally appealing theories can produce damaging and unintended consequences.

When Good Theory Fails in Practice

In the early 1990s, I made a mistake that continues to shape how I think about reform. I helped establish a development NGO inspired by a widely respected theory at the time: “putting the last first.” The idea was to prioritize assistance for the poorest families in a community. Many international donors strongly supported this approach, and on paper it appeared ethically unquestionable.

In practice, however, the results were disappointing—and in some cases harmful. Projects failed, and more troublingly, the social fabric that could have supported long-term development was weakened.

With hindsight, the reasons are clear. Poverty is not only about a lack of material resources. It also involves limited skills, constrained knowledge, weak organizational capacity, and fragile discipline. By directing support exclusively to those labeled as “the poorest,” we unintentionally disconnected from others in the community who were slightly better off—not wealthy, but more capable of managing resources, organizing labor, or sustaining small enterprises.

In some cases, owning something as basic as a motorbike was enough to disqualify a household from assistance. These individuals—often the most capable of turning support into productive activity—were excluded. Ironically, many of them went on to improve their livelihoods, create jobs, and sustain local businesses on their own. Over time, they became the economic anchors of their communities, despite being left out of development programs.

The lesson is not that the poorest should be ignored. Rather, effective reform must strengthen the entire system, not isolate one segment in ways that undermine social cohesion and long-term capacity.

Structural Reform Requires More Than Moral Clarity

This lesson applies directly to today’s debates on structural reform—particularly on sensitive issues such as corruption, governance, and economic equity.

Take corruption as an example. Almost everyone agrees it must be addressed. But agreement on the goal is not the same as clarity on the solution. Reform efforts often fail because corruption is treated as a single moral flaw rather than a collection of specific practices that operate differently across sectors and institutional levels.

Opposing bribery, for instance, does not automatically mean opposing all forms of incentives. Poorly paid officials working in complex systems will find informal survival mechanisms unless reforms address wages, accountability, transparency, and institutional design together. Eliminating corruption without redesigning incentives does not remove the problem—it simply drives it underground.

Similarly, equity is often confused with equality. Absolute equality is neither realistic nor desirable in complex societies. What matters is fairness—recognizing differences in contribution, responsibility, and risk, rather than insisting on identical outcomes.

Understanding Context, Scale, and Contribution

Structural reform must also recognize differences in scale, responsibility, and contribution. It is neither accurate nor productive to equate a large Cambodian business group such as Chip Mong with a real estate developer like Leng Nawatra, who has disappointed hundreds of customers by taking full payment while failing to deliver the homes he promised. Victims have accused him of deception and misconduct.

Chip Mong represents something fundamentally different: domestic capital, long-term investment, and deep integration into Cambodia’s economy. Without such business groups and their sustained investments, Cambodia’s economic development would not have progressed as it has.

Importantly, during times of national crisis, companies like Chip Mong have consistently contributed back to society. Structural reform should therefore encourage responsible business leadership, not weaken it through simplistic or populist approaches that fail to distinguish between constructive and destructive actors.

So, What Should Structural Reform Mean?

At its core, structural reform should aim to:

• Strengthen institutions, not merely punish individuals
• Align theory with real social and economic behavior
• Preserve and reinforce social cohesion
• Reward contribution while protecting the vulnerable
• Build long-term capacity, not short-term appearances

And How Should It Be Done?

Effective reform requires discipline and realism:

• Define problems precisely, rather than relying on slogans
• Design incentives alongside regulations, not in opposition to them
• Include capable middle actors, not only the poorest or the most powerful
• Sequence reforms carefully, respecting timing and institutional readiness
• Ground reforms in lived experience, not imported models alone

Conclusion

Cambodia does not lack good ideas. What it urgently needs is practical wisdom—the ability to translate ideals into reforms that actually function within our social, economic, and cultural realities.

Structural reform is not about choosing the most righteous theory. It is about building systems that people can realistically live with, participate in, and sustain over time.