emerging constraints will test the achievements of the past. This suggests continuing this process of scanning the most binding constraints to growth to adjust policies as the country builds its assets and changes its comparative advantage.

59. **Lessons learned from the paper’s methodology are drawn in Box 2** . The key benefit from the approach is to provide an evidence-based thought process to the much necessary prioritization exercise. Its main challenge – beyond the usual lack of data felt by the analyst – is the fluid nature of the binding constraints (which results from the uncertainty about the growth potential as well as that of the external environment). For instance, while the exchange rate was not an important constraint, the rapid appreciation of the dollar has changed the situation. Similarly the reliance on foreign savings was somewhat less problematic in an environment where international capital flows were abundant. This suggests the need to continue updating such diagnostic to adjust priorities as new information becomes available and as the external environment evolves.

# **VI. References**

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- **Sloth, C., Sreng, H.K., Bottra, K. (2005)** , “Natural Resources and Environment: Issues, Constraints and Challenges”, Chapter 5 of Cambodia Development Resource Institute’s Annual Development Review 2004/05, December.

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