State borrowing may spike [-CPP's "Sarong, Krama & Bicheng" economic policy before the election]

Friday, 04 November 2011
Don Weinland
The Phnom Penh Post

Cambodia's draft budget law for 2012 will seek to increase concessional borrowing by about 75 per cent compared to 2011, according to a copy of the draft obtained by the Post.

A lack of aid commitment may have led to the increase in proposed borrowing, experts said yesterday.

The Cambodia Development Co-operation Forum, a group of international donors led by the World Bank, indefinitely postponed its annual meeting in August after the World Bank cancelled loans due to forced evictions at Boeung Kak Lake. “This year, the aid mechanism was cancelled. Now the government feels the need to borrow more than before,” Chheng Kimlong, a business and economics lecturer at the University of Cambodia, said yesterday.

The draft law, which is before the National Assembly, would allow the government to borrow 700 million special drawing rights in concessional loans, or about US$1.1 billion at the current exchange rate. Last year’s budget law allowed the government to borrow over $630 million.

No license be revoked for developers of SEZs: Cambodian official

December 16, 2010
Xinhua

A senior government official said Thursday there is no license revocation for the developers of Special Economic Zones (SEZs) in Cambodia despite they have speed down or abandon their zone development since the global financial crisis.

According to the report from the Council for the Development of Cambodia (CDC), since 2002, the CDC has granted licenses to 21 SEZs with an estimate of the promised investment of more than 1 billion U.S. dollars.

Those SEZs are located along the borders with Thailand and Vietnam, and on the outskirts of Phnom Penh as well as in Preah Sihanouk province, where the international port is located.

Chea Vuthy, deputy secretary general of the CDC in charge of the Cambodia's SEZs, said that currently among the 21 licensed SEZs, only four are in operations with about 50 investors in the zones, and two are being built.

"Despite most of them suspend or quit their zone development, the government has no plan to revoke their license although the law stated to do so," he told reporters after a business forum on Thursday. "It's up to them to decide if they continue to develop or not."

"If they continue to develop, it benefits the government, but if they do not develop, we lose nothing because both land and money are their own properties," he said.

He said among the four operational SEZs are Phnom Penh SEZ, Manhattan SEZ and Tai Seng SEZ at Vietnam border, and Sihanoukville SEZ, which is a joint venture of 3 billion U.S. dollars between China's Jiangsu Taihu Cambodia International Economic Cooperation Zone Investment Co. Ltd. and the Cambodia International Investment Group Co. Ltd.

And the two being built are Neang Kok SEZ in Koh Kong province and Sihanoukville Port SEZ.

The government considers SEZs as an important part of the country's economic development because they bring infrastructure, jobs, skills, enhanced productivity, at the same time, investors in the SEZs will benefit from a number of fiscal incentives, including income tax, customs, and VAT benefits, said Chea Vuthy.

Khmer Intelliugence News - 28 July 2009

KHMER INTELLIGENCE NEWS
28 July 2009

Foreign Trade Bank falls victim of economic crisis and property glut (2)

Cambodia’s Foreign Trade Bank (FTB), which is 50 percent owned by the state, is in serious trouble because of the worsening economic crisis and the resulting property glut. A heavy portfolio of bad loans in the property sector may require an overhaul of the bank in the next few months. Canadia Bank, which is Cambodia’s largest bank followed by FTB, is in the same alarming situation. The two financial institutions have been able so far to avoid bankruptcy thanks to a massive fund injection from the National Bank of Cambodia. The other FTB shareholders include Canadia Bank (originally 30 percent) and businessman Ung Bun Heuv (originally 20 percent). Canadia Bank itself is now actually controlled by Prime Minister Hun Sen’s family (originally 35 percent) even though its president and (still?) major shareholder is a shady businessman from Canada, Mr. Pung Kheav Se (originally 65 percent). The fall of Cambodia’s two leading and intertwined commercial banks would lead to the collapse of the whole banking system.

Market operators expect a continuous fall in the Cambodian currency (2)

The Riel has been falling against the US Dollar and major regional currencies over the last few weeks. This represents an acceleration of a trend that has been noticeable over the last 18 months. In January 2008, the US Dollar was worth 4000 Riels. The exchange rate went up to 4125 Riels for $1 by January 2009. Today, one needs 4250 Riels to buy $1. The Riel has therefore dropped by 6.25% since January 2008, whereas the Thai Baht has remained stable against the Dollar during the same period of time (around 34 Bath for $1). Market operators expect the Riel to fall more sharply in August and September, with the exchange rate possibly reaching 4500 Riels for $1. The reasons for this evolution are related to the worsening economic crisis, the severe drop in State revenue and the growing budget deficit. To cover the deficit the National Bank of Cambodia is increasingly printing bank notes (paper money), thus fueling inflation, which may get out of control by the end of the year.

French President Nicolas Sarkozy invited to visit Cambodia in September (2)

While on his official visit to France on July 13 and 14, Cambodian Prime Minister Hun Sen invited French President Nicolas Sarkozy to visit Cambodia in September. A big event then will be the inauguration of the Sihanoukville airport which has just been modernized and expanded and will be managed, like the Phnom Penh and Siemreap-Angkor airports, by a local subsidiary (Société Concessionnaire des Aéroports or SCA) of the French construction group Vinci. The French authorities have yet to positively respond to Hun Sen’s invitation because they are taking into consideration the deterioration in the social and political climate in Cambodia with the increasing number of land evictions and human rights violations and the recent spate of defamation lawsuits against government critics here. President Sarkozy had also received a letter from opposition leader Sam Rainsy prior to Hun Sen’s visit pointing to the way France could really help Cambodia. Read Sam Rainsy’s letter at http://tinyurl.com/lh39sn

CPP parliamentarian involved in criminal acts (1)

A CPP National Assembly member, Long Sakhorn is well known for her involvement in public scandals and a long series of criminal acts, which may lead her to jail since the ruling party is more and more embarrassed by her openly conducting reprehensible activities and her stubbornness. A widow of Sin Song, a former coup leader in 1994, she is continuously involved in land grabbing, environment destruction (deforestation and river filling), deception and forgery of documents and thumbprints. She is expert in cheating people and misleading the courts where she is known for her securing the support of judges through bribery. Concrete examples with photos of Long Sakhorn’s criminal offenses are presented at http://tinyurl.com/llokd2

[End]

Sacrava's Political Cartoon: A Wild Typhoon in Cambodia, 2009

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

IMF predicts hard landing for Cambodian economy [... but our Hanoi PhD and our CPP comrades say it ain't so!]

PHNOM PENH, Feb. 12 (Xinhua) -- Cambodia's economy will come under intense pressure in 2009 as tourism, garments and construction take a hit from the global economic slowdown, according to the International Monetary Fund (IMF).

"Cambodia's exceptional growth performance... is coming under increasing strain from the global economic crisis and weakening external demand," English-language daily newspaper the Phnom Penh Post on Thursday quoted an IMF report as saying.

Foreign direct investment will decline and foreign reserves could fall to about 1.9 billion U.S. dollars, it said.

"Cambodia could experience a pronounced liquidity contraction and possible large reserve loss," it said.

Meanwhile, the report predicted 4.8 percent economic growth for Cambodia in 2009, but IMF Resident Representative John Nelmes warned that the projection will be downgraded.

"We are taking a close look at the growth projection... Since November, when the projection was made, the global crisis has intensified," he told the newspaper.

The World Bank has forecast 4.9 percent Gross Domestic Products(GDP) growth for Cambodia this year, while the Economist Conference, which belongs to the same company that publishes The Economist magazine, even said that it will nose-dive to 1 percent.

Tourist sector calls for help [-Gasp! Could there be an economic crisis in Cambodia after all?]

10 Feb 2009
By Ky Soklim
Cambodge Soir Hebdo
Translated from French by Tola Ek
Click here to read the article in French

Representatives of the working group from the tourism private sector and officials from the ministry of Tourism will meet each other on Thursday 12 February, to stimulate a restart in tourist activities which were hit hard in 2008 from the worldwide economic crisis.

Ho Vandy, the former president of the Association of tourist agencies in Cambodia, declared that the private tourist sector will submit several proposals to the ministry, and that it hopes that the ministry will take them into serious consideration.

The private sector’s proposals mainly point to a lowering price of the “tourist package,” such as, lower cost for airfare, lower access fee to tourist sites managed by private companies, lower hotel cost, as well as lower visa fee. “We want to offer a special tourist package to face the crisis period,” Ho Vandy said. “If the government accepts it, we hope to pull up the tourist sector,” he indicated.

Since the crisis affected the tourist sector in Cambodia, people involved in this sector are complaining about a significant loss of revenue. Each year, Cambodia welcomes more than 2 million visitors who spend more than $1.4 billion. In 2008, the number of visitors increased only by 5%, this is much lower that the 17% growth recorded in 2007.

An opposition MP asked the Minister of Finance to explain to the parliament

Radio Free Asia

By Huy Vannak
27th January, 2009
Translated from Khmer by Khmerizarion

The leader of a group of opposition MP's on Tuesday has written a letter to Minister of Finance and Economy by requesting him to personally explain to the parliament about the government's policies to tackle the economic downturn which has resulted from the global economic crisis.

This is a second attempt by the opposition MP's to push the Cambodian government to take measures to tackle the effects of the global economic crisis.

Mr. Son Chhay (pictured), leader of the group, said: "We've seen that the global financial crisis has affected our economy such as the loss of employment in the textile industry, in the tourism industry and other sectors such as the construction sector etc which necessitate the government's measures to help tackle further losses of jobs. Other than that, the government must have a financial stimulus package to prevent the economy fron slipping into a financial crisis, especially in the banking sector and the lending sector."

On the 16th of January, Mr. Sam Rainsy, leader of the opposition Sam Rainsy Party, has written a letter to the Council of Ministers, especially to Prime Minister Hun Sen personally, to request the government to appropriate $500 million of a financial stimulus package to help stimulate the local econmy.

Minister of Finance Keat Chhon cannot be contacted for any comments, but Minister of Information Khieu Kanharith said that the government has earmarked a budget package to help in any eventual economic crisis.

Mr. Hang Chuon Narong, Secretary of State of Ministry of Finance, told Bloomberg News Agency that Cambodia has no cash reserve to help its citizen. What Cambodia can do is offiering tax cuts to textile industries and infrastructure sectors which are instrumental in stimulating the economy.

A new World Bank report released in 2009, forecast that, even though Cambodian economy has not been affected much, Cambodia cannot avoid the resultant effect of the global financial crisis.

Mr. Van Sou Eang, Chairman of Textile Industry Association, predicted that by this April at least 70,000 jobs will be lost, if they don't receive orders from their foreign customers.