Cambodian Growth Stays Strong in 2006
By Erik Wasson
THE CAMBODIA DAILY
In separate reports released Tuesday, the World Bank and the Economic Institute of Cambodia predicted a high level of GDP growth in Cambodia for 2006: 8.9 percent in the case of the World Bank and 85 percent according to EIC.
The rates do not match 2005, when GDP grew at an astounding 13.4 percent. Cambodia's GDP grew 10 percent in 2004, 8.6 percent in 2003 and 6.2 percent in 2002, according to the World Bank.
Strict comparisons with years before 2005 cannot be made, however, the World Bank said in its biannual East Asia Update. This is because improved data gathering methods in 2005 increased the GDP rate from 9.8 percent to 13.4 percent that year, the Bank said.
With the new methods, Cambodia had the highest growth rate in East Asia last year and will have the second highest in 2006, trailing only China, which is projected to grow at 10.4 percent.
Growth slipped from last year because of a slight slowdown in the construction boom and agriculture sector, the World Bank said.
This year's rainfall was strong and should produce a similar crop to last year, said World Bank senior country economist Rabert Taliercio. But to increase crops significantly year after year, Cambodia needs to invest more heavily in canals and dams to free agriculture from boom-and-bust cycles that depend on the monsoon.
"To predict GDP, you have to be a bit of a weatherman in Cambodia," Taliercio said at a press conference to launch the report. "Irrigation is vital for sustained growth in agriculture and to reduce volatility."
The EIC predicts 4 percent growth in agriculture this year, compared to 16-percent in 2005.
EIC Director Sok Hach said the industrial sector likely contributed 14 percent growth in 2006 on the back of the garment sector. Garment exports are expected to increase 40 percent this year based on data from the first nine months, although prices for garments have declined dramatically.
"Overall, we see revenues increase between 10 and 20 percent in the [garment] industry [in September 2005 to September 2006]," Sok Hach said.
To sustain the overall growth, the EIC and the World Bank recommend diversification away from heavy reliance on a narrow base of garments and tourism.
Taliercio said that although there is no data yet on whether Vietnam's entry into the World Trade Organization this year will hurt Cambodia, it will be a significant challenge to the garment industry's competitiveness next year.
Government spokesman and Information Minister Khieu Kanharith welcomed the growth figures.
"In order to really develop the country we have to have at least 6 percent growth, so this is good news," Khieu Kanharith said in an interview. "Since the beginning of the third mandate the government has adopted the Rectangular Strategy, so these policies are having an effect," he added.
The World Bank commended the government for improvements to its tax collection and budget operations. But the EIC said in its report that the government needs to do more to collect property taxes. Attempts to collect taxes on unused land have been problematic, it notes, adding that last year, land estimated by estate agents to be worth over $300 per square meter was being taxed as if it cost $36 per square meter.
The EIC also recommends speedy passage of the business laws Cambodia agreed to adopt when it joined the WTO in 2004. So far only 21 out of 47 laws have been passed. Khieu Kanharith admitted that the process has been a challenge for Cambodia.
Measuring how the economic boom has translated into jobs and reduced poverty is subject to controversy.
The EIC notes that unemployment in Cambodia is officially narrowly defined by the government as working less than one hour—formally or informally—per week. By this measure, Cambodia has a 0.8 percent unemployment rate, "possibly the lowest rate in the world," the EIC's report notes. The EIC estimates that 85 percent of Cambodians hold no formal job.
Cambodia, like Thailand and China, needs to become more "domestically integrated," and link its prosperous cities with its rural poor, World Bank officials said. And the estimated 200,000 young people entering the job market every year need jobs.
Sok Hach said in an interview that EIC estimates that Cambodia gaining duty-free access to the US market could add 146,000 new jobs to the garment sector, where 320,000 Cambodians find work.
Against the backdrop of rosy economic numbers, the International Business Club met with the International Monetary Fund on Tuesday and expressed its confidence in the economy, IBC President Bretton Sciaroni wrote in an email.
"I do not see why [growth] would not be sustainable," he said. "The private sector is bullish on the economy."
The rates do not match 2005, when GDP grew at an astounding 13.4 percent. Cambodia's GDP grew 10 percent in 2004, 8.6 percent in 2003 and 6.2 percent in 2002, according to the World Bank.
Strict comparisons with years before 2005 cannot be made, however, the World Bank said in its biannual East Asia Update. This is because improved data gathering methods in 2005 increased the GDP rate from 9.8 percent to 13.4 percent that year, the Bank said.
With the new methods, Cambodia had the highest growth rate in East Asia last year and will have the second highest in 2006, trailing only China, which is projected to grow at 10.4 percent.
Growth slipped from last year because of a slight slowdown in the construction boom and agriculture sector, the World Bank said.
This year's rainfall was strong and should produce a similar crop to last year, said World Bank senior country economist Rabert Taliercio. But to increase crops significantly year after year, Cambodia needs to invest more heavily in canals and dams to free agriculture from boom-and-bust cycles that depend on the monsoon.
"To predict GDP, you have to be a bit of a weatherman in Cambodia," Taliercio said at a press conference to launch the report. "Irrigation is vital for sustained growth in agriculture and to reduce volatility."
The EIC predicts 4 percent growth in agriculture this year, compared to 16-percent in 2005.
EIC Director Sok Hach said the industrial sector likely contributed 14 percent growth in 2006 on the back of the garment sector. Garment exports are expected to increase 40 percent this year based on data from the first nine months, although prices for garments have declined dramatically.
"Overall, we see revenues increase between 10 and 20 percent in the [garment] industry [in September 2005 to September 2006]," Sok Hach said.
To sustain the overall growth, the EIC and the World Bank recommend diversification away from heavy reliance on a narrow base of garments and tourism.
Taliercio said that although there is no data yet on whether Vietnam's entry into the World Trade Organization this year will hurt Cambodia, it will be a significant challenge to the garment industry's competitiveness next year.
Government spokesman and Information Minister Khieu Kanharith welcomed the growth figures.
"In order to really develop the country we have to have at least 6 percent growth, so this is good news," Khieu Kanharith said in an interview. "Since the beginning of the third mandate the government has adopted the Rectangular Strategy, so these policies are having an effect," he added.
The World Bank commended the government for improvements to its tax collection and budget operations. But the EIC said in its report that the government needs to do more to collect property taxes. Attempts to collect taxes on unused land have been problematic, it notes, adding that last year, land estimated by estate agents to be worth over $300 per square meter was being taxed as if it cost $36 per square meter.
The EIC also recommends speedy passage of the business laws Cambodia agreed to adopt when it joined the WTO in 2004. So far only 21 out of 47 laws have been passed. Khieu Kanharith admitted that the process has been a challenge for Cambodia.
Measuring how the economic boom has translated into jobs and reduced poverty is subject to controversy.
The EIC notes that unemployment in Cambodia is officially narrowly defined by the government as working less than one hour—formally or informally—per week. By this measure, Cambodia has a 0.8 percent unemployment rate, "possibly the lowest rate in the world," the EIC's report notes. The EIC estimates that 85 percent of Cambodians hold no formal job.
Cambodia, like Thailand and China, needs to become more "domestically integrated," and link its prosperous cities with its rural poor, World Bank officials said. And the estimated 200,000 young people entering the job market every year need jobs.
Sok Hach said in an interview that EIC estimates that Cambodia gaining duty-free access to the US market could add 146,000 new jobs to the garment sector, where 320,000 Cambodians find work.
Against the backdrop of rosy economic numbers, the International Business Club met with the International Monetary Fund on Tuesday and expressed its confidence in the economy, IBC President Bretton Sciaroni wrote in an email.
"I do not see why [growth] would not be sustainable," he said. "The private sector is bullish on the economy."
6 comments:
HI KI-MEDIA AND ALL !
AFTER ONE WEEK OF TENSE AND RUDE DISCUSSION BETWEEN " THE PATRIOT & OWN SHADOW", OUR SURVEY CAME TO A FINAL CONCLUSION AS FOLLOWS:
1- ON KI-MEDIA PROFESSIONALISM OF CREATING AND REPORTING ABOUT POLITICS IN CAMBODIA:
-(i)FIRSTLY, YOUR REPORTS ARE RELEVANT AND CONFORM WHAT HAS BEEN WRITTEN IN THE PRESS ABOUT CAMBODIA POLITICS. THAT IS GOOD FOR ALL OF US KHMER LIVING INSIDE OR OUTSIDE THE MOTHERLAND.
-(ii)IN YOUR TITLE IN ORANGE, YOU INTENDED TO SHOW YOUR POLITICAL PARTY' S CHOICE. IT IS NOT A PROBLEM BECAUSE FREEDOM OF BELIEF AND IT IS YOUR POLITICAL RIGHT TO SUPORT MR. SAM RAINSY' S PARTY.
-(iii) IN ORDER TO BE MORE PROFESSIONAL IN THE NET, IS KI-MEDIA LOOKING FOR A NEW DIRECTION?
2- ON KI-MEDIA READERS AND SUPPORTERS:
(i) WE CONCLUDED THAT MOST OF THE READERS AND SUPPORTERS LIVE ABROAD:US, AUSTRALIA, CANADA ETC...
(ii) DURING OUR ONE WEEK SURVEY, WE USED STRONG LANGUAGES AND WE APOLOGY IF WE MAY OFFENCE BUT IT WAS PURELY INTEND TO TEST THE WATER AND GET A BETTER UNDERSTANDING OF THE KNOWLEDGE, EDUCATION AND CULTURE OF ALL OF US.
(iii) THE SURVEY SHOWS THERE ARE TWO CATEGORIES OF READERS:
- THE FIRST GROUP OF READERS ARE VERY SERIOUS ABOUT THEIR COMMENTS, VERY POLITE AND BALANCED VIEWS: THEY ARE CULTIVATED AND EDUCATED... BRAVO!
THEIR VIEWS COULD BE AS A LESSON FOR ALL AND THE SAKE OF THE COUNTRY. THEY ARE BRAVE AND PATRIOTIC. CAMBODIA IS PROUD OF THEM!!!!
- THE SECOND GROUP OF READERS ARE MORE OR LESS PATHETIC ABOUT GIVING COMMENTS ABOUT POLITICS IN CAMBODIA: TOO MUCH PASSION OF HATE BECAUSE OF POLITICS AND NOT ENOUGH MATURITY, EDUCATION, KNOWLEDGE AND CULTURE. THEY MUST LEARN ABOUT THE SOCIAL WAY OF BEING A RESPECTABLE KHMER WITH OUR OWN WAY OF SAVOIR-VIVRE, OF COURTESY AND KINDNESS. PLEASE TRY TO FORGET ABOUT THE NEGATIVE ASPECT OF LIFE ABROAD AND GET MORE IN CONTACT WITH THE PREACHING AND LEARNING OF BUDDHISM. YOU WILL BE MORE RESPECTFUL BY YOUR OWN ENVIRONMENT AND SOCIETY.
IN CONCLUSION, WE AGAIN APOLOGY FOR THE ONE WEEK SURVEY THAT WE CONCLUDED RIGHT NOW.
LONG LIVE TO CAMBODIA AND CAMBODIAN LIVING INSIDE OR OUTSIDE!
STRONG LINKS AND BONDS OF SOLIDARITY BETWEEN KHMER AND KHMER!
MUTUAL RESPECT FOR THE SAKE OF THE MOTHERLAND!
THANK YOU FOR READING US! PLEASE FEEL FREE TO AGREE OR DISAGREE, OR TO INSULT. THIS IS JUST A SURVEY!!!!!!!
Yes, the rosy economy has created jobs, albeit fewer than KI would want. But if it persists, it will produce more, and put all oppositions into shame.
SiS
DID WE HEAR INSURANCE COMPANY MOVES IN? No!
Do you have any idea how many jobs can be created from an Insurance Company?
Please allow us to name some of them:
If a person gets hurt, that requires some very serious professional people to care for her/his injury. Let us designate that honorary profession to our nurses and doctors.
If a property get burnt down, that will require a fire truck, a firefighter crews and perpahs an umbulance and an umbulance crews just to stand by in case someone needs rescued immediately. Do we need to mention policemen and an investigator crew members?
How about when someone decides to sue someone else for a mistake they make? wouldn't it call for the court room to build? The judge to hear the case? or prison to set up? and to punish / discipline the person?
What else that involves with some responsibilties or disagreements with an Insurance Company?
Oh plesae don't forget one very important thing, The Bank! The Bank Tellers and Their Managers and those accountants staff. Please don't forget also that if the bank having more than one division, that could draw their board of directors and CEO. Wouldn't it?
I see jobs and jobs for our kids and our people line up waiting to be filled.
Can someone please bring this attention to our government.That big bucks from Oil revenue are coming! It can be used to do some real useful stuff and organize Cambodia much better. Most of all make Cambodian police do the job for us Cambodian citizen and not just for a corrupt government.
We mentioned that before. You may check back. It's there.
Ordinary Khmers
Why can SRP or some political party put his magnificent idea from 8:58p.m into their time during campagning?
What wrong with mentioning or creating more jobs by doing this and that while talking to ordinary people? You won't win by talking about border dissagreement with our neighbor alone. I wouldn't think so.
?????????????
Insurence when majority make less than $1 a day ?
Think again, you may can go open one yourself competted with the one in the country now (the IndoChina)
Survey my ass....
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