THE global financial crisis has disproportionately affected Cambodia’s rural and urban poor, according to a Cambodian Economic Association (CEA) survey released yesterday.
Job loss and declining income were widely experienced during the crisis, according to residents of 15 villages sampled last year, but the report’s joint author said that many were unaware of the source of their financial challenges.
“Some people didn’t know anything about an international crisis; they just knew their income dropped,” CEA President Chan Sophal said.
According to the report, “Impact of the Economic Downturn on Households and Communities in Cambodia”, decreasing incomes and job loss particularly affected the urban poor during the crisis: 61 percent reported those factors as their main challenge in 2009 – a dramatic rise from 0.9 percent the year previously.
Around 15 percent of rural poor people said their main difficulty was falling wages, according to the report, up from zero in 2008.
Paying for healthcare presented a major challenge for most rural dwellers, the report added.
Inflation had previously been the most significant problem, with 47.7 percent of rural poor and 64.2 percent of urban poor reporting higher food prices as their largest difficulty in 2008.
Also, 75 percent of respondents said they began purchasing less-expensive food last year, and more than half said they were forced to reduce overall food consumption.
Compared to the 2008 figure, 9 percent more households reported taking out loans.
Although Cambodia had been hard-hit by the crisis that began in the American sub-prime mortgage market, Chan Sophal said growing international ties were still a greater benefit than drawback, to the Kingdom.
“Domestic exposure to external economies is large. Although there was a hiccup, the benefits brought by globalisation outweigh the costs,” he said.
Job loss and declining income were widely experienced during the crisis, according to residents of 15 villages sampled last year, but the report’s joint author said that many were unaware of the source of their financial challenges.
“Some people didn’t know anything about an international crisis; they just knew their income dropped,” CEA President Chan Sophal said.
According to the report, “Impact of the Economic Downturn on Households and Communities in Cambodia”, decreasing incomes and job loss particularly affected the urban poor during the crisis: 61 percent reported those factors as their main challenge in 2009 – a dramatic rise from 0.9 percent the year previously.
Around 15 percent of rural poor people said their main difficulty was falling wages, according to the report, up from zero in 2008.
Paying for healthcare presented a major challenge for most rural dwellers, the report added.
Inflation had previously been the most significant problem, with 47.7 percent of rural poor and 64.2 percent of urban poor reporting higher food prices as their largest difficulty in 2008.
Also, 75 percent of respondents said they began purchasing less-expensive food last year, and more than half said they were forced to reduce overall food consumption.
Compared to the 2008 figure, 9 percent more households reported taking out loans.
Although Cambodia had been hard-hit by the crisis that began in the American sub-prime mortgage market, Chan Sophal said growing international ties were still a greater benefit than drawback, to the Kingdom.
“Domestic exposure to external economies is large. Although there was a hiccup, the benefits brought by globalisation outweigh the costs,” he said.
1 comment:
It is not just in Cambodia that this is the experience. In the US, the world's "father" of capitalism, the same is happenning now, the poor and the low middle-income folks are hurting the most.
The government helped bail out failed big corporations/banks, but the same concept is not extended to regular working folks.
The capitalist economy is probably at a point needing to reset the process. Although at the start and controlled pace, capitalism would fuel competition, better inventions and innovations, and yes , PROFITS, it is now at a point that workers are choked with debts and everything had to slow or stop. To rejuvenate the system, there is a possible, but unmentionable, approach which involves debt cancelation/adjustment for all.
By helping regular folks to be able to adjust their mortgage or consumer debts, there would be again "disposable" incomes which people could use to move the wheel of the economy again. Folks should not owed more than the value of the houses that they are buying, their combined monthly debt obligation should not be more than 40% or 50% of their monthly incomes.
It is not surprising, if consumers started counter-sueing a mortgagor for adhering one-way only to the "good faith" contracts that they signed with the borrowers when the economy/market was "hot." Both the banks and the borrowers agreed to the "good faith" appraisal/assessment of the values of the properties and the credit worthiness of the borrowers. If a situation that was out of the control of either the banks, or the borrowers resulted in the significant drop in the values of the liens/collaterals and credit wothiness of the borrowers, how would this be morally, legally, in good faith, be fair to hold borrowers only to the now invalid contracts containing the now-irrelevant good faith valuations? Especially, for those same banks that got bailed-out?
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