Cambodia's debt a concern

Construction work continues on a new Chinese-funded bridge spanning the Tonle Sap river yesterday in Phnom Penh. (Heng Chivoan)

Wednesday, 29 February 2012
Don Weinland
The Phnom Penh Post

“And there have been a couple of examples where the work hasn’t been up to the quality it should be”

An International Monetary Fund and World Bank report has questioned Cambodia’s ability to deal with future financial crises if government borrowing increases.

While the report indicated that Cambodia was at low risk for severe debt problems, it highlighted the need for effective management of new debt and rapidly growing build-operate-transfer, or BOT, projects, which include the hydropower dams and road reconstruction conducted by Chinese companies.

This month alone, the Kingdom courted more than US$800 million in Chinese loans for infrastructure projects.

In two different speeches in February, Prime Minister Hun Sen said Cambodia would borrow $302 million from China for roads and irrigation systems, and would apply for an additional $500 million for similar construction.

Cambodia's Debt by Year from 1970 to 2011

Cambodia's Debt From 1970-2011

World Bank Document - Cambodia - Joint Bank-Fund Debt Sustainabi​lity Analysis

http://www.box.com/s/fixkhs11n3hdxnom2vk7

National budget approved in spite of gross lack of quorum at the NatAss

NatAss ratified the 2012 budget draft law

24 Nov 2011
Everyday.com.kh
Translation from Khmer by OssDey

The 2012 budget draft law was ratified by 86 votes (out of 86) at the NatAss at 11:30 AM on 24 Nov 2011 in spite of the SRP and the HRP MPs’ boycott of the session. According to this draft law, the budget amounts to $2.695 billion, $1 billion of which will be borrowed from overseas.

November 11, 2011

WHY THE HUN SEN REGIME RELIES MORE AND MORE HEAVILY ON EXTERNAL BORROWINGS

The economic situation in Cambodia is artificial, fragile and explosive based on the following facts (from F1 to F7):

F1 : A dollarized economy. The country’s money supply is composed of US Dollars for up to 95% and Riels for only 5%. The exchange rate (1 US Dollar = around 4,000 Riels) is totally artificial, being easily manipulated given the respective amounts of Riels and Dollars in circulation. Because it is pegged to the Dollar, the Riel is overvalued compared to the currencies of our neighbouring countries and commercial partners after taking into account the differences in inflation rate in the different countries (caution: official statistics in Cambodia are manipulated for political reasons). The dollarized economy and the overvalued Riel contribute to a loss of competitivity for Cambodia’s economy which in turn contributes to a huge trade deficit and a large unemployment.

F2 : High inflation rate, meaning increasing cost of living. This seems paradoxical given F1 because inflation tends to be low in countries with an overvalued currency. But the high inflation in Cambodia is largely due to compulsory bribes in the production and distribution processes, other forms of financial extortion and commercial monopolies based on government systemic corruption.

Inflation is an insidious form of wealth transfer from the weak and the poor to the powerful and the rich, whereas the ongoing land grabbing is a direct and brutal form of such a transfer.

F3 : High and increasing unemployment rate partly due to the dollarized economy (see F1) but also to demographic factors, inappropriate education system, corruption-related hindrances to foreign direct investment and poor economic governance.

F4 : Deteriorating living conditions because of high inflation and low salaries for workers, employees and civil servants. Farmers’ income also suffers from government corruption and neglect and the absence of any consistent agricultural policy (by comparison see SRP political platform for agriculture). Hidden and disguised unemployment is a major cause of poverty (see F3).

F5 : Huge trade deficit (imports of goods and services larger than exports). The main cause for such a deficit is low productivity and declining competitivity associated with the dollarized economy (see F1).

F6 : Continuous fiscal (or State budget) deficit. Because of government corruption (loss of State revenues, unjustified increase in State expenditures that are always inflated) the fiscal deficit is persistently high and needs to be covered by international assistance, increasingly by borrowings from foreign institutions and countries.

F7 : Increasing borrowings from foreign institutions and countries, such as China over a recent period (see F6). This continuously contributes to the dollarized economy (see F1). External borrowings feed corruption, allow continuous fiscal and monetary irresponsibility on the part of the CPP-led government that is in a position to indulge in vote buying (donations and patronage system). Thanks to the increasing amount of non-transparent external borrowings in foreign currencies, secret amounts of Riels could also be illegally printed by the CPP for corruption and election purposes without notably affecting the exchange rate (see F1). Therefore, external borrowings play a pivotal role in maintaining the CPP in power by preventing a deterioration of the fiscal deficit (see F6) and a worsening of the balance of payments (see F5) that would result in dramatic consequences for the economy and for the CPP political domination (see F2, F3 and F4).

Sam Rainsy

Elected Member of Parliament

Former Finance Minister

Hun Xen's "kado" (gift) to YOU, YOUR CHILDREN, YOUR GRANDCHILDREN AND THEIR CHILDREN

Your Gift: 

Paying back US$3.3 Billion in Hun Xen's DEBT

កម្ពុជា​ជំពាក់​បំណុល​បរទេស​ជាង ៣៣០០ លាន​ដុល្លារ

អាទិត្យ 06 វិច្ឆិកា 2011
ដោយ ប៉ែន បូណា 
Radio France Internationale

យ៉ាងណាក៏ដោយ​គណបក្ស​ ប្រឆាំង​តែង​បាន​រិះគន់​អំពី​ការ​កើន​ឡើង​នៃ​បំណុល​សាធារណៈ ​និង​បាន​សម្តែង​ការ​ព្រួយ​បារម្ភ​ថា ​កម្ពុជា​នឹង​មាន​វិបត្តិ​បំណុល​ទៅ​ថ្ងៃ​អនាគត ​ប៉ុន្តែ ​លោក​នាយក​រដ្ឋមន្ត្រី​ ហ៊ុន សែន​ បាន​ពន្យល់​តប​ថា ​បំណុល​របស់​កម្ពុជា​ស្ថិត​ក្នុង​កម្រិត​មួយ​មិន​ខ្ពស់​ឡើយ។ ម្យ៉ាង​ទៀត​ ម្ចាស់​បំណុល​បរទេស​នៅ​តែ​បន្ត​ឲ្យ​កម្ពុជា​ខ្ចី​ដោយ​គ្មាន​ការ​ព្រួយ​បារម្ភ៕

គិត​ត្រឹម​ឆ្នាំ​២០១០ ​ប្រទេស​កម្ពុជា​ជំពាក់​បំណុល​គេ​ចំនួន​ជាង​៣០០០​លាន​ដុល្លារ​គិត​ទាំង​បំណុល​ចាស់​ឬ​ស្មើ​នឹង​២៩​ភាគរយ​នៃ​ផលិតផល​ក្នុង​ស្រុក​សរុប​(ផ.ស.ស)។ ​នេះ​បើ​យោង​តាម​ការ​ប្រកាស​ឲ្យ​ដឹង​របស់​ក្រសួង​សេដ្ឋកិច្ច ​និង​ហិរញ្ញវត្ថុ។ ​ក្នុង​របាយការណ៍​ស្តីពី​ស្ថានភាព​បំណុល​របស់​កម្ពុជា ​ក្រសួង​សេដ្ឋកិច្ច ​និង​ហិរញ្ញវត្ថុ​ក៏​បាន​ពន្យល់​អំពី​គោលការណ៍​គ្រប់គ្រង​ និង​ប្រើប្រាស់​បំណុល​បរទេស​ផងដែរ។ ​គណបក្ស​ប្រឆាំង​បាន​សម្តែង​ក្តី​បារម្ភ​អំពី​ការ​កើន​ឡើង​នៃ​បំណុល​របស់​កម្ពុជា។

គិត​ត្រឹម​ដំណាច់​ឆ្នាំ ​២០១០​ កម្ពុជា​មាន​សន្និធិ​បំណុល​ថ្មី​សរុប​ប្រមាណ ​២ ៥៣០​ លាន​ដុល្លារ​ស្មើ​នឹង ​២២,៣​ភាគរយ​នៃ​ផលិតផល​ក្នុង​ស្រុក​សរុប​ (ផសស)។ ​បើ​គិត​ទាំង​បំណុល​ចាស់​ដែល​កំពុង​ដោះស្រាយ​ផង បំណុល​កម្ពុជា​មាន​សរុប​​ជិត​ ៣ ៣០០ ​លាន​ដុល្លារ​អាមេរិក​ ឬ​ស្មើ​នឹង​២៩​ភាគ​រយ​នៃ​ ផ.ស.ស។ ​នេះ​បើ​យោង​តាម​ សេចក្ដី​ជូន​ដំណឹង​របស់​ក្រសួង​សេដ្ឋកិច្ច​ និង​ហិរញ្ញវត្ថុ​ ចុះ​ថ្ងៃ​ទី៤​ខែ​វិច្ឆិកា​ឆ្នាំ​២០១១ ​ដែល​កាសែត​ក្នុង​ស្រុក​មួយ​ ស្និទ្ធ​នឹង​រដ្ឋាភិបាល​លើក​យក​មក​ចុះ​ផ្សាយ​នៅ​ថ្ងៃ​នេះ។

National debts YOU, YOUR CHILDREN, and YOUR GRANDCHILDREN willl be paying ... for Hun Sen's sins

"I want you to pay my debt!": Hoon Xhen

ក្រសួង​សេដ្ឋកិច្ច​បង្ហាញ​ថា​កម្ពុជា​ជាប់​បំណុល​ជិត​៣៣០០​លាន​ដុល្លារ​អាមេរិក​គិត​ត្រឹម​ចុង​ឆ្នាំ​២០១០​

Synopsis: At the end 2010, Cambodia borrowed US$1.138 billion from the ADB (25% of its loan), $1.208 billion from China (26.5% of its loan), $1.035 billion from the World Bank (22.5% of its loan), $532 million from South Korea and Japan (12% of its loan), and $643 million from other partners (14%).

At the end of 2010, not counting the old debts, Cambodia owed $2.530 billion in loan, this is equivalent to 22.3% of the GDP. If the old debts are accounted for, at the end of 2010, Cambodia owes $3.3 billion or 29% of its GDP.

Source: Kampuchea Thmei

អាវ៉ាស៊ីចេក អាវ៉ាស៊ីនុំ
អាវ៉ាកុំយំ គិតតែសងលុយគេទៅ!

ភ្នំពេញ​ ៖ ក្រសួង​សេដ្ឋកិច្ច​និង​ហិរញ្ញវត្ថុ​នៃ​ព្រះ​រាជាណាចក្រ​កម្ពុជា​បាន​បង្ហាញ​ពី​ស្ថានភាព​បំណុល​សាធារណៈ​របស់​កម្ពុជា​ដោយ​លើក​ឡើង​ពី​ការ​គ្រប់​គ្រង​បំណុល​និង​វិធាន​ការ​នានា​ក៏ដូចជា​គោល​ការណ៍​គន្លឹះ​ទ្រទ្រង់​ចិរភាព​កំណើន​សេដ្ឋកិច្ច។​

យោងទៅតាម​សេចក្ដីជូនដំណឹង​របស់​ក្រសួង​សេដ្ឋកិច្ច​និង​ហិរញ្ញវត្ថុ​ដែល​ ធ្វើឡើង​កាលពី​ថ្ងៃទី៤ខែវិច្ឆិកា​ឆ្នាំ២០១១ស្ដីពី​ស្ថានភាព​បំណុល​សាធារណៈ​ កម្ពុជា​ដែល​កម្ពុ​ជាថ្មី​ទទួលបាន​អោយដឹងថា​ដើម្បី​ទ្រទ្រង់​ចីរភាព​កំណើន​ ឲ្យ​បាន​ក្នុង​រង្វង់៦ភាគរយ​ទៅ៧ភាគរយ​និង​ការបន្ថយ​ភាពក្រីក្រ​របស់​ប្រជាជន​ ឲ្យ​បាន​ជាង១ភាគរយ​ក្នុង១ឆ្នាំ​កម្ពុជា​ចាំបាច់​ត្រូវ​វិនិយោគ​ឲ្យ​បាន​ ជាង២០ភាគរយ​នៃ​ផលិតផល​សរុប​ក្នុងស្រុក(ផសស) ក្នុងនោះ​ការ​វិនិយោគ​សាធារណៈ​ក៏មាន​តួនាទី​សំខាន់​ចាំបាច់​ ខានមិនបាន។កន្លងមក​ក្រោម​ការដឹក​នាំ​ប្រកបដោយ​កិត្តិ​បណ្ឌិត​មាន​ចក្ខុវិស័យ ​វែងឆ្ងាយ​របស់​សម្ដេច​តេ​ជោ ហ៊ុន សែន នាយករដ្ឋមន្ត្រី​នៃ​ព្រះរាជាណាចក្រ​កម្ពុជា រដ្ឋាភិបាល​បាននិងកំពុង​អនុវត្ត​កម្មវិធី​កំណែ​ទំ​រង​ការគ្រប់គ្រង​ ហិរញ្ញវត្ថុ​សាធារណៈ​សំដៅ​ធ្វើ​ឲ្យ​ថវិកាជាតិ​ក្លាយជា​ឧបករណ៍​អភិវឌ្ឍន៍​ដ៏​ មាន​ប្រសិទ្ធភាព។

ក្រសួង​សេដ្ឋកិច្ច​បាន​ជូនដំណឹង​ទៀតថា​ជា​លទ្ធផល​យើង​សំរេចបាន​នូវ​អតិថិ ​ការ​ចន្ត​ប្រមាណ២ភាគរយ​នៃ(ផសស)ក្នុង​មួយឆ្នាំ​ដើម្បី​រួមចំណែក​ក្នុងការ​ វិនិយោគសាធារណៈ។ដើម្បី​បំពេញ​កង្វះខាត​ហិរញ្ញប្បទាន​ក្នុងការ​ វិនិយោគសាធារណៈ​រាជ​រដ្ឋា​ភិ​បាល​បាន​ខិតខំ​កៀងគរ​ដោយ​ជោគជ័យ​ប្រមូល​ ហិរញ្ញប្បទាន​ពី​ប្រភព​ក្រៅប្រទេស​ទ​ជា​ហិរញ្ញប្បទាន​ឥត​សំណង​ទាំង​ជា​ ហិរញ្ញប្បទាន​ពី​ស្ថាប័នហិរញ្ញវត្ថុ​អន្តរជាតិ​និង​ប្រទេស​ជា​មិត្ត​ មួយចំនួន។នេះ​គឺ​ដោយសារ​លទ្ធផល​និង​ស្នាដៃ​សំខាន់​ក្នុងការ​អភិវឌ្ឍន៍​ ប្រទេស​របស់​រាជរដ្ឋាភិបាល​ដែល​ធ្វើអោយ​ដៃគូ​អភិវឌ្ឍ​នៅតែ​បន្ត​ផ្ទាល់​ សេចក្ដីទុកចិត្ត​និង​គាំទ្រ​ឧបត្ថម្ភ​ជានិច្ច​ចំពោះ​រដ្ឋាភិបាល។

Cambodia to borrow more for flood damage, rice plans [-Phnom Penh is facing severe economic problem?]

Monday, Oct 31, 2011
Reuters

PHNOM PENH - Cambodia could borrow US$1.1 billion (S$1.37 billion) from other countries in 2012, 75 per cent more than this year, to help repair infrastructure damaged in flooding and support efforts to increase rice exports to 1 million tonnes by 2015, a senior official said on Monday.

Cheam Yeap, chairman of the Finance Commission, said the borrowing, which has to be approved by parliament, would come in the form of concessionary, 40-year loans at low interest rates.

He declined to say which countries might offer the loans but said that of Cambodian's current debt of around $8 billion, some $6 billion was owed to its closest ally, China. Another $1.5 billion is owed to Russia and $317 million to the United States, he added.

Cheam Yeap said the draft 2012 budget, which also has to go before parliament, includes provisions for new spending of $2.69 billion, up from $2.4 billion this year.

Cambodia mired in $4 billion debt to China

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

26 October 2011
By Silapol
Free Press Magazine Online
Translated from Khmer by Soch
Click here to read the original article in Khmer

During the past few years, it was found that Cambodia owed Communist China by almost $4 billion already. The Chinese loan money was used to build Cambodia’s infrastructure, and the total loan amount includes the $500 millions that Cambodia asked to borrow from China last week to repair flood damage.

Cheam Yeap, the chairman of the National Assembly’s economic and finance committee, told reporters recently that: “EU countries are facing economic woes, therefore we have only China left [to borrow from].” He added that the debt owed by Cambodia amounted to close to $7 billion, including $1.8 billion in debt owed to Russia and the US from the 70s and the 80s.

Although the government claimed [that these loans] allowed Cambodia to progress every year from one step to another, economic analysts said that the government does not seem to be anything to improve its economy at all, except for getting itself mired in mounting foreign debt with every passing year.

SRP MP Yim Sovann declared yesterday: “Younger generations will have to pay back these debts. The amount owed to China is larger than that from any other countries, and this could create serious economic instability.”

Russia refuses to cancel debt

Wednesday, November 11, 2009
By Khouth Sophak Chakrya
The Phnom Penh Post

THE Russian Federation has refused to wipe out over a billion dollars of Cold War-era debt, despite National Assembly President Heng Samrin's appeals to senior Russian officials during his recent six-day visit to the country.

Cheam Yeap, a senior lawmaker for the ruling Cambodian People's Party who accompanied Heng Samrin on the trip, said Tuesday that Russian officials have not yet accepted the government's bid to cancel the debt, which totals around US$1.5 billion. The money was borrowed from the Soviet Union in the 1980s for the purchase of military equipment during Cambodia's decade-long civil war.

Cambodia requested debt cancellation from Russia in 2006 and 2008, but was unsuccessful both times.

"We made an effort to convince them by saying that China cancelled $300 million of a $5 billion debt and the IMF canceled a debt of $82 million. But they said nothing," he said.

The delegation travelled to Moscow and St Petersburg, where they met with Sergey Mironov, chairman of the Russian Federation Council's Federal Assembly and other government representatives to discuss a potential air route linking Moscow with Phnom Penh and Siem Reap.

He added that Russia's deputy prime minister and investors from the country will visit Cambodia on November 15 to investigate a possible dam project.

"They will look into investing in a hydropower project in Stung Treng that will be able to produce 980 megawatts of electricity," he said.

Hun Xen wants you and your children to owe another $380 million to S. Korea on his behalf

Hun Sen asks SKorea for further $380m in loans

Monday, 08 June 2009
Written by Kay Kimsong
The Phnom Penh Post

Call comes during official visit to Seoul after Koreans promised $60m in lending Thursday

PRIME Minister Hun Sen is seeking a further US$380 million loan from South Korea for infrastructure projects, Foreign Minister Hor Namhong said at a press briefing Friday upon his return to Phnom Penh International Airport following an official visit to Seoul.

"The Korean Government is considering Hun Sen's proposals for a loan package," Hor Namhong said after landing in Phnom Penh.

"I would like to stress that the country is continuing to grow, despite the economic crisis," he added.

The $380-million loan proposal includes $100 million for a new bridge across the Bassac River from Takhmao and a further $100 million for a Phnom Penh ring road.

The remainder would go towards an irrigation project in Kandal province and a Pursat River reparation project.

Yang Saing Koma, director of the agricultural research body CEDAC, applauded the investment requested for the agriculture sector, adding that better infrastructure would help the country recover from the current economic downturn.

"The government is making agriculture a priority in the country, which is a positive thing," said Yang Saing Koma. "The sector still has huge potential."

He said that the state needs to invest heavily in irrigation, and that only 7 percent of the country's 2,000 irrigation systems are functioning properly.

Opposition concerns

In response to the news, Sam Rainsy Party lawmaker Son Chhay warned that government mismanagement could leave the country saddled with large foreign debts.

"The Korean Government is considering Hun Sen's proposals."

"Loans are a problem ... they are not grants or aid. We have obtained loans for some projects and seen no benefit - that leaves us with a lot of debt," he said.

The quality of irrigation, roads and other infrastructure is poor, he added, citing the example of National Road 3 that was funded by a South Korean loan.

"Road 3 is very poor quality and cost us $30 million," said Son Chhay. "We owe a lot of money for a project that wasn't properly managed."

He said Cambodia is not sufficiently wealthy to repay the debt. "We must not owe more money that we cannot afford to repay," he said. "I am very concerned about spending loans without proper accountability."

News that the prime minister is seeking a further loan from South Korea comes after Seoul announced on Thursday it would lend the Kingdom $60 million for roads and sewerage, AFP reported.

The two countries held discussions on future loans from South Korea as part of talks in Seoul last week between Hun Sen and his counterpart President Lee Myung-bak held prior to the prime minister's return Friday to Phnom Penh.

Lee asked for permission for South Korean companies to build an industrial park near Sihanoukville during talks, although Cambodia has yet to respond.