Showing posts with label Cambodia economic woes. Show all posts
Showing posts with label Cambodia economic woes. Show all posts

Tuesday, November 08, 2011

Weak spots seen in Kingdom trade

Tuesday, 08 November 2011
Don Weinland and May Kunmakara
The Phnom Penh Post

While the World Trade Organisation yesterday lauded Cambodia’s economic achievements since joining in 2004, officials pointed to the lack of much-needed financing for the Kingdom’s burgeoning trade sector.

Cambodia lacks the capacity to finance the manufacturing and agriculture exports that would allow the country’s industries mature, Minister of Commerce Cham Prasidh said yesterday, speaking at a presentation of the WTO’s first trade policy review of the Kingdom, released on Friday.

We are still running short of liquidity from commercial banks and from other financial institutions. We have a lot of warranties to trade but not [enough] money to roll out these activities,” he said.

Wednesday, July 14, 2010

Cambodia stays confident as IMF conference outlines risk

Tuesday, 13 July 2010
May Kunmakara
The Phnom Penh Post


Daejeon - ASIA’s high dependence on external economies could make it vulnerable to shocks, a Korean official told the International Monetary Fund (IMF) conference in South Korea yesterday, as stakeholders convened to assess the region’s role as the engine for global growth.

Yoon Jeung-hyun, Korea’s Minister of Strategy and Finance, said in his opening remarks that despite the recent rapid growth, the region’s “high dependence” on other economies remains, which “leads to inherent vulnerabilities to external shocks”.

Furthermore, “24 percent of population in the Asia Pacific region is still living in poverty, and poverty percentages in individual countries vary widely from 0.4 percent to 55 percent”.

Cambodian representatives at the two-day conference in South Korea’s central city Daejeon were confident the Kingdom’s 5 percent economic growth forecast for this year was a realistic target, although it was higher than the IMF’s projections.

The IMF projected that Cambodia’s economic growth rate would be 4.5 percent, compared with a regional growth rate of more than 7 percent.

Minister of Economy and Finance Keat Chhon, who is attending the conference, said Cambodia’s marginally higher aim of 5 percent was feasible.

The conference “is talking about the leadership of Asia – our country is also part of this leadership, and this year we will aim to reach about 5 percent [economic] growth”.

He said the government had come to the conference “to listen to the many countries of Asia, to collect knowledge, and take it to implement in our country”.

National Bank of Cambodia Governor Chea Chanto, also in attendance, said the Kingdom’s finance and banking sector had stood firm during the global economic crisis as the government, heeding signs of crisis in Western countries, took action to curb the fallout.

“We set a strategic plan to curb the impact of the crisis before it came,” he said. “It does not mean we took no impact – we did – but we managed well as we saw many foreign commercial banks come during that period because they trusted us.”

IMF’s managing director, Dominique Strauss-Kahn told conference delegates “Asia’s time has come. No one can doubt that Asia’s economic performance will continue to grow in importance.”

Friday, June 18, 2010

Cambodia Behind in Investment Improvement [-Too much corruption and red tapes under Hun Xen's regime?]

Ros Sothea, VOA Khmer
Phnom Penh Thursday, 17 June 2010

“Cambodia is not progressing enough to compete with other countries,” the report said. “The most critical shortcoming is the infrastructure,” including poor port facilities, poor roads and poor customs.
Cambodia has made less improvement in its trade environment than other countries that are competing for investors in the global marketplace, a new report has found.

The World Economic Forum’s 2010 trade index report found that Cambodia slipped to No. 102 of 126 countries, down nine places from the year before.

The index measures overseas ease of doing business, including market access, border administration, transport and telecommunications and the general business environment.

The World Economic Forum, based in Switzerland, did find that Cambodia had made improvements in market access, but it said the country faces major challenges in other aspects, including corruption in border administration—one of the highest rates in the world—and poor infrastructure and transportation.

These caused longer export times at higher costs, making Cambodia less desirable to investors.

Adding to the nation’s woes is a climate that is not friendly to trade. There are low levels of domestic competition, weak property rights and limited openness to multilateral trade rules, the report said.

Poor physical security is another problem, where police service is unreliable and levels of crime and violence are rising, the report said.

“Cambodia is not progressing enough to compete with other countries,” the report said. “The most critical shortcoming is the infrastructure,” including poor port facilities, poor roads and poor customs.

“So when clearing customs, there is room for irregular payment, some sort of bribery, and it creates very low transparency and it creates huge delays and is very costly,” Thierry Geiger, an economist for the World Economic Forum, said in a phone interview.

Immediate, tough measures in combating corruption and improving infrastructure would improve the country’s trade environment in the next five or ten years, he added.

Cambodia is one of the world’s most corrupt countries, according to Transparency International, and loses an estimated $500 million a year to graft. Meanwhile, trade facilitation could help export competitiveness, attract foreign direct investment and boost economic growth.

Good trade facilitation has helped Singapore’s economy rank among the highest for years. Its border administration is one of the least corrupt in the world, and public servants provide fast, effective service, according to the report.

Vietnam has significantly improved its trade facilitation, while Thailand has become the best country in the region in implementing a Asean “single window” initiative, which supports free trade within the bloc.

Ros Khemara, an economist for the Cambodia Economic Association, said Cambodia can hardly operate the single window initiative.

“Operation within the administration in Cambodia always consist of informal fees, which occur at every [trading] process, especially regarding export and import,” he said. “If we want to reform to be better and faster, we have to eliminate some of the processes that will also reduce the chance for people who are used to receiving the informal fee. So it is hard to reform on this.”

In recent years, Cambodia has put many policies in place to help reduce the complexities of trade here, including improved registration and border administration. But the implementation of those policies is lagging.

“The policy framework and the legal framework in Cambodia is very strong to help encourage the development of the private sector,” said Joshua Morris, an emerging markets consultant. “Typically, what you find is enforcement and the implementation of those policies sometimes are not as well maintained as you would like with respect to the judicial and legal environments for business, key of business registration, transparency, taxation across all organizations, to further improvement in the processes in timing for import and export.”

Mao Thura, secretary of state with the Ministry of Commerce, said weak enforcement comes from a lack of tough measures to control implementation. But he said his ministry and the Ministry of Economy and Finance are organizing a workshop to find measures to bring the policies into practice.

Meanwhile, the International Financial Corporation will organize a workshop to train a group of arbitrators for the National Center for Commercial Arbitration. The independent center will be the country’s first dispute resolution mechanism and could attract more investors.

Thursday, May 20, 2010

Sam Rainsy in Radio Call-in Show On The Economic Situation

(Photo: Sovannara, RFI)

May 20, 2010

SAM RAINSY IN RADIO CALL-IN SHOW ON THE ECONOMIC SITUATION


Today, Thursday, May 20, Member of Parliament, opposition leader and former Finance Minister Sam Rainsy will take part in a radio call-in show broadcast from Phnom Penh on the current economic situation, its impact on the people’s living conditions and SRP proposals for a better economic policy.

The question-and-answer session with listeners will be broadcast live nationwide on FM 93.5 MHz, from 06:00 pm to 07:00 pm Phnom Penh time, in the framework of SRP-sponsored Candle Light radio program.

SRP Cabinet

Tuesday, July 14, 2009

Tourism Facing Multiple Strains: Official

By Men Kimseng, VOA Khmer
Original report from Washington
13 July 2009


Cambodia’s second-largest earner of foreign income, tourism, is starting to feel the effects of a prolonged economic downturn and the unstable political situation in Thailand, tourism experts said Thursday.

The number of foreign visitors was down slightly for the first quarter of 2009, dropping 2.23 percent compared to the same period in 2008, but, officials said, those visitors who do come are spending less money.

“This decline has nothing to do with Cambodia’s performance,” said Ang Kim Eang, president of Cambodian Association of Travel Agents, as a guest on “Hello VOA.”

The industry is facing a swath of problems, from the global downturn, a wobbly government in Bangkok, the spread of the H1N1 virus, and even oil price hikes, he said.

Some have blamed Cambodia’s lack of a national airline for the decline, he said, and are hoping for a new tourism law and an open-sky policy, as well visas on arrival and an expansion of attractions.

Even with the slight decline, the number of tourists from the region has risen. Visitors from the Philippines, Laos Malaysia and Vietnam have boosted business for small hotels, he said.

“Therefore, big and luxurious hotels have faced some difficulties in losing their customers...as tourists now spend less money,” Ang Kim Eang said.

To stay competitive in the downturn and to keep numbers up, tourism professionals should target specific countries, said Ho Vandy, co-chairman of the Tourism Working Group, who was also a guest on Thursday’s show.

“What we have advised for the government is related to the promotion of targeting specific tourist groups, Japan or Korea, for instance”.

Thursday, June 25, 2009

Reality off the rails in Phnom Penh [-Phnom Penh is in complete denial]

Muzzled opposition in front of the National Assembly (Photo: SRP)

Jun 26, 2009
By Sam Campbell
Asia Times (Hong Kong)


PHNOM PENH - Science fiction author Philip K Dick once explained reality as "that which, when you stop believing in it, doesn't go away". As sensible as this may sound, it is a definition unlikely to take hold in Cambodia, where recent events have shown the government's tendency to obstinately dismiss anything but the most convenient information.

The denials have come from the highest ranks of government to the lowest rungs of social entertainment and conscripted the judicial system to fend off criticism. Experts and economists say the government backlash risks driving away the vital foreign investment and international aid the country now desperately needs to keep the economy afloat.

The World Bank and the International Monetary Fund have both predicted a 0.5% contraction in Cambodia's 2009 gross domestic product (GDP), while the independent Economist Intelligence Unit (EIU) estimated an even sharper 3% drop. The government sees things differently and announced last month a beaming 6% GDP growth projection, down only slightly from its 7% projection in April.

That optimistic spin, economists and experts say, is totally out of whack with Cambodia's on-the-ground economic realities, as well as regional and global trends. The crucial garment industry, usually the country's main export engine, saw exports plummet 25% year-on-year in the first quarter of 2009. The foreign revenue-generating tourism sector is equally troubled, with air arrivals in the first four months of 2009 down 16% over the same period last year.

The kingdom's rapid economic growth - GDP increases were measured in double digits for several years - seems to have made officials reluctant to concede that the downturn is having serious effects in Cambodia.

Indeed, Prime Minister Hun Sen's economic lieutenants have been slow to acknowledge the impact of the global crisis on Cambodia's until recently rising fortunes, opting instead to discredit or clamp down on critical news and assessments.

Minister of Economy and Finance Keat Chhon said in early June that a US$6.6 million training program and a $1 million micro-loans program would be adequate to mitigate the 60,000 garment factory workers who recently lost their jobs - a claim greeted with skepticism from economic analysts. Keat Chhon did not respond to an Asia Times Online request for an interview about the programs.

Hun Sen has responded to downcast projections with a characteristic sharp tongue. When the EIU this year rated Cambodia among global countries at high risk of political instability due to the economic crisis, the strongman leader questioned the report's "political orientation" and said the experts that compiled it wore "glasses with prescriptions too strong for their eyes".

In an April 6 speech, the premier went further, claiming that the report was "a political attempt to stop the flow of investments". Meanwhile, Cambodia's ambassador to the United Kingdom, Hor Nambora, dismissed the report as based on "sketchy and unconvincing" evidence. In a letter to the EIU, he called the report "perverse" and "insulting".

"Your scare-mongering allegations are highly dangerous, as they could be construed as actively inciting unrest," wrote Hor Nambora, son of Cambodia's veteran Foreign Minister Hor Namhong. "They also happen to be a gross distortion and misrepresentation of Cambodia's true position, and there can be no justification for these claims."

He also upbraided the EIU for having "arrogantly dismissed" Hun Sen's vow that Cambodia would maintain its economic growth this year: "You seem to have ignored this reassurance from the highest possible level, preferring to rely on your own evidence."

Comedic criticism

The government's protestations peaked in early June following a May 30 concert organized by rights organizations to bring attention to the thorny issue of corruption.

At the so-called "Clean Hands Concert", newly appointed United States ambassador Carol Rodley called corruption one of the main obstacles to socio-economic development in the country, claiming the scourge "costs Cambodia up to $500 million per year in terms of forgone state revenue that could otherwise be spent on public services in education and health care and jobs for Cambodian youth".

She claimed that the sum was "equivalent to the cost of constructing 20,000 six-room school buildings or the ability to pay every civil servant in Cambodia an additional US$260 per month". Her arithmetic, however, was not well received by the government.

"The Royal Government of Cambodia absolutely refutes the politically motivated and unsubstantiated allegation made by the United States diplomat in contradiction of the good relations between Cambodia and the United States Government," read a stern letter the Cambodian Foreign Ministry sent to the US Embassy.

Cambodia's UK ambassador Hor Nambora again entered the fray, saying Rodley seemed to have allied herself "with the discredited views of the international pressure group Global Witness which continually engages in virulent and malicious campaigns against the Royal Government of Cambodia". Global Witness has long been an irritating antagonist to Hun Sen's administration, once labeling its leaders as a "kleptocratic elite".

Pointing to a conspiracy to undermine the government is becoming a common theme when responding to critics of the government. The eventual aims of this unnamed group of conspirators - which encompasses such diverse organizations as environmental watchdogs like Global Witness, economic think-tanks such as the EIU and human-rights groups - is unclear.

One conspiracy theory was put forth publicly by Chy Koy, a performer with the popular Koy comedy troupe. Although Koy had performed at the Clean Hands anti-graft concert, he appeared on June 6 on a Cambodian People's Party-owned television station to ridicule anti-corruption NGOs (non-governmental organizations) as money hungry fabricators of non-existent corruption.

"Some NGOs accuse the government of being corrupt without thinking about its achievements," he explained to the local press after the parody. "You can say that the government is corrupt if nothing had developed in our country, but the government is working and everything is developing." Although Cambodia is officially one of the world's least-developed countries, the comedian claimed: "Now we have everything. Some families have two SUVs, some have three."

The Koy performance was followed - again on CPP-controlled TV - on June 13 by the Krem comedy troupe, which portrayed NGOs and journalists as conspiring to stage fake forced evictions - another bete noir of the Cambodian government. The well-documented and sometimes violent evictions of impoverished communities, according to Krem's sketch, are merely an invented tool to enable greedy foreigners to indulge their appetites for luxury hotels and local women.

With official denials and social satire fending off criticism on one front, another battle was playing out in a very different sphere: home decoration.

In what many viewed as one of the most peculiar assaults on free speech so far this year, Soung Sophorn, a 22-year-old law student, was fined $1,250 after being convicted of defamation. Oddly, the medium for the defamation was graffiti, and the slogans "Against dictatorial policy", "People suffer because the government bows down to the company", and "Stop Evictions" in English, had been sprayed on June 1 on the side of Soung Sophorn's own home.

Phnom Penh Municipal Police Chief Touch Naruth told local media that Soung Sophorn, a member of the opposition Sam Rainsy Party (SRP) and a vocal critic of evictions, was convicted because, "He can insult any individual or company but not the government." Prior to the three-day arrest and conviction process, Soung Sophorn had been summoned to the headquarters of local developer Shukaku Inc, the company responsible for the looming eviction of Soung Sophorn's community, for his opinionated house painting.

Private developer Shukaku's 99-year, $79 million lease to develop 133 hectares of state land where 4,000 mainly poor families live, including the area adjacent to the Boeung Kak backpacker ghetto, has provoked a steady stream of censure from foreign diplomats and rights organizations. According to local reports, the company and its owner, CPP Senator Lao Meng Kim, have steadfastly refused to engage with civil society or the media.

Disorienting defamation

Meanwhile, an ongoing dispute between opposition Sam Rainsy Party (SRP) parliamentarian Mu Sochua and Hun Sen typifies a flurry of tit-for-tat lawsuits that also represents a clear threat to democratic debate. For years, the CPP has used out-dated defamation laws to muzzle critics, among then union leaders, journalists and opposition leaders.

According a lawsuit filed by Mu Sochua on April 27, the premier allegedly made defamatory comments in an April 4 speech; the only compensation sought was an apology. The lawsuit claims that Hun Sen defamed Mu Sochua by referring to a female parliamentarian from Kampot province who embraced a general and then later complained that the buttons of her shirt had come undone. Mu Sochua, the only female MP from Kampot province, had complained of voter irregularities and physical intimidation from CPP officials during the run-up to the 2008 national assembly elections.

Mu Sochua's case was dismissed on June 10, but the premier struck back with a counter defamation case against Mu Sochua that is ongoing. Kong Sam Onn, the lawyer representing Mu Sochua, is also being sued for having held a press conference where he had allegedly defamed the prime minister by claiming that the prime minister had defamed his client. The Cambodian Bar Association has begun an investigation into this alleged ethical misconduct of speaking publicly about a case.

The National Assembly voted on June 22 to lift Mu Sochua's parliamentary immunity, leaving her open to criminal prosecution. Hun Sen noted on June 17 that the two-thirds parliamentary majority required to strip immunity would also be needed to reinstate it. He also used the opportunity to threaten further lawsuits against interfering NGOs.

Even nationalists cannot safely criticize, as Moeung Sonn, a local tour operator and president of the Khmer Civilization Foundation, found out. Moeung Sonn was slapped with a $2,400 lawsuit by the government after he claimed at a press conference that the installation of new lights at Angkor Wat might have damaged the legendary temple. Moeung Sonn, a vocal supporter of the government on cultural and territorial issues, and a significant donor to Cambodian soldiers stationed around disputed zones near Preah Vihear, has fled to France to avoid arrest.

While later information suggests that the light installation has done no damage to the ancient structure, draconian reactions to well-meaning comments suggest that dissenting voices will no longer be allowed.

Opposition leader Sam Rainsy, SRP parliamentarian Ho Vann (also stripped of his parliamentary immunity) and Hang Chakra, editor-in-chief of Khmer Machas Srok newspaper, are also facing defamation suits.

Cambodia doth protest too much

The increasing trend toward intolerance has not gone unnoticed. A June 15 statement from the UN Office of the High Commissioner for Human Rights in Cambodia cautioned, "Pursuing the current complaints may reverse the course of the still fragile democratic development process in Cambodia."

"This recent surge in the use of criminal defamation and disinformation lawsuits filed mostly against politicians, journalists and other persons expressing their views in a peaceful manner on matters of public interest threatens to inhibit what should be a free debate and exchange of ideas and views on these matters," the UNOHCHR wrote.

The group also warned that stifling freedom of expression through such means "is a serious threat to democratic development which may undermine the efforts of the past 16 years to rebuild a tolerant and pluralistic environment in Cambodia". The same day, US rights advocacy Human Rights Watch appealed for the CPP to halt "threats, harassment and spurious legal action against members of parliament and lawyers defending free expression".

The crackdown on political opposition is all the more perplexing, given that the CPP, with 90 of 123 seats, is in firm control of the National Assembly. A showing of 58% in the generally free and fair 2008 parliamentary elections, the biggest margin ever for a National Assembly election, shows widespread support for the CPP.

Some analysts believe that by persecuting a mostly fractured and generally powerless opposition, the government risks making martyrs of otherwise unremarkable politicians. Perhaps more significantly, Hun Sen risks further alienating the Western donor nations and the foreign business community that in recent years have contributed largely to Cambodia’s economic progress.

The US, a major donor and significant provider of aid and technical assistance, not to mention one of the kingdom's biggest export markets, has been critical of the recent turn of events.

"It appears that the courts are being used to silence critics of the government," US Embassy spokesman John Johnson told Asia Times Online. "Free speech and freedom of the press are fundamental rights in democracies throughout the world, and public figures and politicians should be prepared to receive both praise and criticism from the people they govern as part of the democratic process."

It's a democratic reality Hun Sen's government seems reluctant to face.

Sam Campbell is a reporter and editor based in Cambodia.

Thursday, December 18, 2008

Wasn't it a Hanoi PhD who said that the global economic downturn wouldn't have a significant impact on Cambodia?

Economic Downturn Felt in Cambodian Stores

By Taing Sarada, VOA Khmer
Original report from Washington
17 December 2008


As the global economy continues to worsen, vendors in Cambodia say their daily business has begun to suffer.

At the Red Moon restaurant, behind the Hotel Inter-Continental on Mao Tse Toung Boulevard, owner Nhem Sothear lamented the fall in his guest numbers.

“I’ve seen a 20 percent to 30 percent reduction from the rate before,” he said recently. “Before, they used to spend $100; now they spend only $80 to $70, or $50. It’s not so negative, it’s still positive, but it’s only at a small level. We used to make a good income, but now it is not so much.”

Sot Visal, general manager for the Phnom Khmer restaurant, near Silep market, said the economic downturn was costing him 30 percent to 40 percent of his customers, while some restaurants have closed altogether or are reducing staff.

“When the world has a bad economic crisis like that, we lose a lot of our clients,” he said.

A woman named Angeli, at a clothing store called “I Love You,” said customers had started asking for cheap clothes, rather than worrying about high quality.

“Most of my clients are very reluctant with the price,” she said, noting that her store had just opened. “They want cheap clothes but of poor quality.”

The worsening consumer climate in Cambodia is echoing that in other countries, especially America, following the collapse of the housing and subprime lending markets.

Economist Sok Sina said the downturn was hurting Cambodia’s economic growth rate, dropping it from a high of 13 percent in 2006 to between a projected 4 percent and 6 percent in 2009.

“Cambodia’s economy mainly depends on industry, agriculture and service,” he said. “If the countries in the West, Europe and Asia meet an economic crisis, they will reduce their spending on food, clothes and tourism. These factors can hurt Cambodia’s economy.”