Showing posts with label High inflation rate. Show all posts
Showing posts with label High inflation rate. Show all posts
Thursday, February 23, 2012
Saturday, September 27, 2008
The inflation in Cambodia exceeds by far 22.3%, according to the CDRI
25-09-2008
By A.L.G.
Cambodge Soir Hebdo in English
Click here to read the article in French
By A.L.G.
Cambodge Soir Hebdo in English
Click here to read the article in French
According to an independent survey, the importance of food products and fuel in the household consumption has been underestimated.
The price of rice has doubled over one year. In one year, the price of rice has doubled and the one of fuel has increased with 50%, indicates a survey of the Cambodia Development Resource Institute (CDRI), published on Thursday 25 September. According to the CDRI, the inflation exceeds the official number of 22.3% which was announced for the period between July 2007 and July 2008.
This number, based on a basket composed of 227 consumption goods, doesn’t give enough importance to food products, which represent 70% of the expenses for 40% of the population. In order to cope with this price increase, the poorer have bought lower quality rice, with a price increase from 1000 riel to 2000 riel per kilogram, while the traditional rice increased from 2000 riel to 4000 riel per kilogram.
Other food products with the highest increase between May 2007 and May 2008 are pork (between 50 and 70%), poultry (+54%) and beef (+16%).
The price increase of fuel and labour has resulted in higher production costs. Gasoline increased with 50%, diesel with 80%, fertilizers between 80 and 200% and one day of labour between 40 and 50%, particularly on the field of agriculture.
Amongst the sectors most hit by inflation: the food products and tobacco (36.8% on average), transport and communication services (27.1%), and medical care (16.2%).
The areas suffering from the highest inflation are the regions of the Tonlé Sap, in the provinces of Siem Reap, Kampong Thom and Kampong Chhnang. 37% of the households might face scarcity.
Over short term, the CDRI recommends that the country increases its food reserves in order to limit the impact of food price fluctuations. The Institute mentions that rice imports which aren’t registered through customs are an obstacle for the evaluation of cereal stocks.
Over mid-term, the independent Institute believes that it’s essential to invest in agriculture in order to ensure food self-sufficiency in Cambodia.
The price of rice has doubled over one year. In one year, the price of rice has doubled and the one of fuel has increased with 50%, indicates a survey of the Cambodia Development Resource Institute (CDRI), published on Thursday 25 September. According to the CDRI, the inflation exceeds the official number of 22.3% which was announced for the period between July 2007 and July 2008.
This number, based on a basket composed of 227 consumption goods, doesn’t give enough importance to food products, which represent 70% of the expenses for 40% of the population. In order to cope with this price increase, the poorer have bought lower quality rice, with a price increase from 1000 riel to 2000 riel per kilogram, while the traditional rice increased from 2000 riel to 4000 riel per kilogram.
Other food products with the highest increase between May 2007 and May 2008 are pork (between 50 and 70%), poultry (+54%) and beef (+16%).
The price increase of fuel and labour has resulted in higher production costs. Gasoline increased with 50%, diesel with 80%, fertilizers between 80 and 200% and one day of labour between 40 and 50%, particularly on the field of agriculture.
Amongst the sectors most hit by inflation: the food products and tobacco (36.8% on average), transport and communication services (27.1%), and medical care (16.2%).
The areas suffering from the highest inflation are the regions of the Tonlé Sap, in the provinces of Siem Reap, Kampong Thom and Kampong Chhnang. 37% of the households might face scarcity.
Over short term, the CDRI recommends that the country increases its food reserves in order to limit the impact of food price fluctuations. The Institute mentions that rice imports which aren’t registered through customs are an obstacle for the evaluation of cereal stocks.
Over mid-term, the independent Institute believes that it’s essential to invest in agriculture in order to ensure food self-sufficiency in Cambodia.
Tuesday, September 09, 2008
Cambodia's inflation hits record 22 percent [... and this is just the official number, in reality it may be much higher]
Tuesday, September 09, 2008
PHNOM PENH (AFP) — Cambodia's inflation hit a record high of 22 percent in July, a government minister said Tuesday.
Planning Minister Chhay Than said high global prices of oil and food were to blame for the soaring rate.
"For July, the inflation rate was 22 percent. We can say that this is a record high," Chhay Than told AFP.
"The inflation is caused by outside factors... the prices of oil, fuel and foods... the slowdown in the US economy," he said.
"But if we compare with some neighbouring countries, it is not so high," Chhay Than added.
The last published consumer price index (CPI) for January showed that inflation had reached 18.7 percent.
The government then stopped releasing monthly CPI reports in a move widely seen as an effort to hide spiralling consumer costs ahead of July elections, in which Prime Minister Hun Sen's ruling party stormed to victory.
Officials denied that claim, saying there had been a disagreement over how to calculate the figure.
The government has now said it will resume publication of inflation figures later this week.
Cambodia in May doubled reserve requirements for private banks from 8.0 percent to 16.0 percent in a bid to curb money supply and stem rising inflation. The requirements took effect from July.
Planning Minister Chhay Than said high global prices of oil and food were to blame for the soaring rate.
"For July, the inflation rate was 22 percent. We can say that this is a record high," Chhay Than told AFP.
"The inflation is caused by outside factors... the prices of oil, fuel and foods... the slowdown in the US economy," he said.
"But if we compare with some neighbouring countries, it is not so high," Chhay Than added.
The last published consumer price index (CPI) for January showed that inflation had reached 18.7 percent.
The government then stopped releasing monthly CPI reports in a move widely seen as an effort to hide spiralling consumer costs ahead of July elections, in which Prime Minister Hun Sen's ruling party stormed to victory.
Officials denied that claim, saying there had been a disagreement over how to calculate the figure.
The government has now said it will resume publication of inflation figures later this week.
Cambodia in May doubled reserve requirements for private banks from 8.0 percent to 16.0 percent in a bid to curb money supply and stem rising inflation. The requirements took effect from July.
Monday, September 08, 2008
Hun Sen's gov't: Inflation rate dropping ... it's "only" 22% now -sic!-
A Phnom Penh rice trader Sunday. The price of staples skyrocketed in recent months, prompting the government to suspend the publication of inflation figures. (Photo: TRACEY SHELTON)CPI data to resume this week
Monday, 08 September 2008
Written by Thet Sambath and Chun Sophal
The Phnom Penh Post
Opposition blasts government claim of lower inflation rate
MINISTRY of Planning officials announced a decrease in Cambodia's inflation rate to 22 percent in advance of official Consumer Price Index numbers expected later this week.
The government suspended monthly CPI reports in early February in a move widely seen as an effort to obscure spiralling consumer costs ahead of the July national polls.
"The ministry has completed the Consumer Price Index and inflation was at 22 percent in July and August," Minister of Planning Chhay Than told the Post Sunday.
"These figures show that inflation has gone down compared to the same period last year," he said.
The minister said the drop was explained in part by falling petrol prices.
However, Sam Rainsy Party parliamentarian Son Chhay dismissed the government's inflation assessment.
"I think the ministry shouldn't release statistics for politically motivated reasons. The election is over, so they should give us the real numbers," he said.
He said the figure of 22 percent doesn't correspond to actual market costs for goods, which he says have gone up no less than 30 percent over the past six months.
The National Bank of Cambodia said last month that inflation for the first half of the year rose to 25.1 percent.
San Sithan, director general of the Ministry of Planning, told the Post Sunday the government will adopt a new model for calculating the CPI some time near the end of the year.
"It will be in place by the end of this year," he said, adding that there would be only minor differences between the two.
"We are seeing a decrease in inflation because petrol prices have dropped, and that has driven down the price of other goods and services," San Sithan said.
Inflation in January 2008 - the last month government data was available - stood at more than 18 percent.
MINISTRY of Planning officials announced a decrease in Cambodia's inflation rate to 22 percent in advance of official Consumer Price Index numbers expected later this week.
The government suspended monthly CPI reports in early February in a move widely seen as an effort to obscure spiralling consumer costs ahead of the July national polls.
"The ministry has completed the Consumer Price Index and inflation was at 22 percent in July and August," Minister of Planning Chhay Than told the Post Sunday.
"These figures show that inflation has gone down compared to the same period last year," he said.
The minister said the drop was explained in part by falling petrol prices.
However, Sam Rainsy Party parliamentarian Son Chhay dismissed the government's inflation assessment.
"I think the ministry shouldn't release statistics for politically motivated reasons. The election is over, so they should give us the real numbers," he said.
He said the figure of 22 percent doesn't correspond to actual market costs for goods, which he says have gone up no less than 30 percent over the past six months.
The National Bank of Cambodia said last month that inflation for the first half of the year rose to 25.1 percent.
San Sithan, director general of the Ministry of Planning, told the Post Sunday the government will adopt a new model for calculating the CPI some time near the end of the year.
"It will be in place by the end of this year," he said, adding that there would be only minor differences between the two.
"We are seeing a decrease in inflation because petrol prices have dropped, and that has driven down the price of other goods and services," San Sithan said.
Inflation in January 2008 - the last month government data was available - stood at more than 18 percent.
Friday, September 05, 2008
Cambodia: decrease of the GDP, inflation and deficit
05-09-2008
By Ky Soklim
Cambodge Soir Hebdo (now in English)
By Ky Soklim
Cambodge Soir Hebdo (now in English)
The growth predictions for 2008 amount to 7.2%, compared to 10.1% in 2007, according to the National Bank of Cambodia.
These difficulties lie in the textile and construction sectors and are the cause of the decrease in 2008, bringing it back to 7.2%, two points below the rate of 2007, specifies the National Bank of Cambodia in a 50 page report.
The report also mentions the inflation which continues to affect the Cambodian economy, despite the government measures to control it. In one year, the prices allegedly increased with 37.2%, according to the calculations done at the end of the first semester of 2008 by the National Bank of Cambodia.
The inflation affects mainly the food, fuel and textile products.
According to the National Bank, the commercial deficit increased during the first semester. While the volume of exports has increased with 448.5 million dollars, reaching 2.4 billion dollars, the imports have increased with 584 million dollars and reach approximately 3.1 billion dollars for the six first months of the year.
The commercial deficit reaches thus 700 million dollars. Cambodia mainly exports agricultural and farm products (rice, rubber trees, fish) and imports general consumers goods and oil.
These difficulties lie in the textile and construction sectors and are the cause of the decrease in 2008, bringing it back to 7.2%, two points below the rate of 2007, specifies the National Bank of Cambodia in a 50 page report.
The report also mentions the inflation which continues to affect the Cambodian economy, despite the government measures to control it. In one year, the prices allegedly increased with 37.2%, according to the calculations done at the end of the first semester of 2008 by the National Bank of Cambodia.
The inflation affects mainly the food, fuel and textile products.
According to the National Bank, the commercial deficit increased during the first semester. While the volume of exports has increased with 448.5 million dollars, reaching 2.4 billion dollars, the imports have increased with 584 million dollars and reach approximately 3.1 billion dollars for the six first months of the year.
The commercial deficit reaches thus 700 million dollars. Cambodia mainly exports agricultural and farm products (rice, rubber trees, fish) and imports general consumers goods and oil.
Thursday, July 24, 2008
Progress giving Cambodia's ruling party edge ahead of vote [... this is why Cambodians must vote to bring in change]
Jul 24, 2008
By Bronwyn Sloan
DPA
By Bronwyn Sloan
DPA
Phnom Penh - Scarcely a month goes by without a human rights group decrying something about Cambodia under the country's dominant Cambodian People's Party (CPP) of Prime Minister Hun Sen.
The Berlin-based anti-graft watchdog Transparency International ranks Cambodia as one of the most corrupt countries in Asia - a view shared by donors the country still relies heavily upon.
And yet no one is predicting that the CPP would emerge from national parliamentary elections scheduled for Sunday with anything but a handsomely increased majority. Voters, it seems, just don't care.
'I can't eat human rights,' said CPP voter Si Nuon, 29, a housekeeper in Phnom Penh. 'When the CPP says they are going to do something, they do it.'
Indeed, just 10 years ago, dusty, potholed roads led past ragged parks, and gunfire was a common sound. While Cambodia remains one of the world's poorest countries, sports utility and luxury vehicles now crowd smooth thoroughfares on their way to swank shopping centres and manicured public spaces where families picnic in the evenings.
Construction is everywhere, crowned by the site in the heart of the capital of Gold Tower 42, scheduled to be Cambodia's first skyscraper.
The International Monetary Fund said last month that economic growth would drop from 10.4 per cent to a still impressive 7 per cent through 2008 but praised the government on its measures to help protect the poor from rising inflation.
'Economic activity in Cambodia remains robust,' it concluded.
But the CPP certainly hasn't been harmed by the antics of its opponents, either.
Once voters equated royalty with stability. Prince Norodom Ranariddh's Funcinpec party, for example, won the first post-Khmer Rouge elections in 1993.
Since then, the royalists have been split by the prince's philandering (he lives openly with a classical dancer with whom he has a young son) and corruption allegations that culminated in the prince being convicted in absentia for the illegal sale of his own party headquarters last year.
Ranariddh is currently in self-imposed exile in Kuala Lumpur, on the run from an 18-month jail term imposed over the sale of the multimillion-dollar party lands.
Other royals have proved just as mortal. Politician and Prince Norodom Chakrapong faced a court appearance in March last year over 1.3 million dollars in government tax debts, and his privately owned airline, Royal Phnom Penh, went bankrupt.
Of the 123 seats in the National Assembly, the CPP currently holds 73, the royalist Funcinpec 26 and the opposition Sam Rainsy Party 24.
Funcinpec continues to hope royalty translates into votes while the Sam Rainsy Party is known for its anti-Vietnamese stance and the CPP has concentrated on running a positive campaign highlighting infrastructure development.
Veteran CPP lawmaker Cheam Yeap said his party's success is partly due to other parties underestimating the voters.
'No government can avoid inflation,' said Cheam Yeap, who claimed the CPP now has 5 million members on its books in a country of 14 million people. 'The people know oil is up and, therefore, so is the price of everything, everywhere.
'No one can avoid corruption, either. However, despite this, the CPP has made the country grow and the economy develop. Pessimists will always criticize us, but the people are not stupid.'
The ability of Hun Sen, a former soldier and farmer with little formal education but a formidable grasp of politics, to speak to the people in a language they understand and his refusal to speak down to them gives him an edge, the politician said.
'In the first election in 1993, we won 51 seats, then 64 the next time, and 73 in 2003,' he said. 'Our rise is steady like a ladder. We are hoping for up to 80 seats this election.'
After Funcinpec unceremoniously dumped Ranariddh, it replaced him with Keo Puth Rasmei, the husband of Princess Arun Rasmei - a royalist connection Funcinpec is relying on.
'The people love her royal highness,' Funcinpec spokesman Ork Socheat said, 'and right now, the people's heart is in the market. I think we can win 40 seats and be the number two party.'
But even a beautiful princess finds it tough to compete against the CPP, which has visibly and steadily improved infrastructure, building hundreds of schools and pagodas across the country - often prominently branded with the names of high-ranking CPP officials.
Elections are traditionally a time of violence, but this campaign has been relatively peaceful although the shooting deaths this month of opposition journalist Khim Sambo and his son have drawn an international outcry.
But Cheam Yeap countered that voters would have their minds more on positives, such as the government's work in securing UNESCO's recent listing of the ancient Preah Vihear temple as a World Heritage Site, Cheam Yeap said.
'We will always be scapegoats for these people to blame,' he said. 'Where is their proof? Some parties know they have lost the election already so they are clutching at straws.'
The Berlin-based anti-graft watchdog Transparency International ranks Cambodia as one of the most corrupt countries in Asia - a view shared by donors the country still relies heavily upon.
And yet no one is predicting that the CPP would emerge from national parliamentary elections scheduled for Sunday with anything but a handsomely increased majority. Voters, it seems, just don't care.
'I can't eat human rights,' said CPP voter Si Nuon, 29, a housekeeper in Phnom Penh. 'When the CPP says they are going to do something, they do it.'
Indeed, just 10 years ago, dusty, potholed roads led past ragged parks, and gunfire was a common sound. While Cambodia remains one of the world's poorest countries, sports utility and luxury vehicles now crowd smooth thoroughfares on their way to swank shopping centres and manicured public spaces where families picnic in the evenings.
Construction is everywhere, crowned by the site in the heart of the capital of Gold Tower 42, scheduled to be Cambodia's first skyscraper.
The International Monetary Fund said last month that economic growth would drop from 10.4 per cent to a still impressive 7 per cent through 2008 but praised the government on its measures to help protect the poor from rising inflation.
'Economic activity in Cambodia remains robust,' it concluded.
But the CPP certainly hasn't been harmed by the antics of its opponents, either.
Once voters equated royalty with stability. Prince Norodom Ranariddh's Funcinpec party, for example, won the first post-Khmer Rouge elections in 1993.
Since then, the royalists have been split by the prince's philandering (he lives openly with a classical dancer with whom he has a young son) and corruption allegations that culminated in the prince being convicted in absentia for the illegal sale of his own party headquarters last year.
Ranariddh is currently in self-imposed exile in Kuala Lumpur, on the run from an 18-month jail term imposed over the sale of the multimillion-dollar party lands.
Other royals have proved just as mortal. Politician and Prince Norodom Chakrapong faced a court appearance in March last year over 1.3 million dollars in government tax debts, and his privately owned airline, Royal Phnom Penh, went bankrupt.
Of the 123 seats in the National Assembly, the CPP currently holds 73, the royalist Funcinpec 26 and the opposition Sam Rainsy Party 24.
Funcinpec continues to hope royalty translates into votes while the Sam Rainsy Party is known for its anti-Vietnamese stance and the CPP has concentrated on running a positive campaign highlighting infrastructure development.
Veteran CPP lawmaker Cheam Yeap said his party's success is partly due to other parties underestimating the voters.
'No government can avoid inflation,' said Cheam Yeap, who claimed the CPP now has 5 million members on its books in a country of 14 million people. 'The people know oil is up and, therefore, so is the price of everything, everywhere.
'No one can avoid corruption, either. However, despite this, the CPP has made the country grow and the economy develop. Pessimists will always criticize us, but the people are not stupid.'
The ability of Hun Sen, a former soldier and farmer with little formal education but a formidable grasp of politics, to speak to the people in a language they understand and his refusal to speak down to them gives him an edge, the politician said.
'In the first election in 1993, we won 51 seats, then 64 the next time, and 73 in 2003,' he said. 'Our rise is steady like a ladder. We are hoping for up to 80 seats this election.'
After Funcinpec unceremoniously dumped Ranariddh, it replaced him with Keo Puth Rasmei, the husband of Princess Arun Rasmei - a royalist connection Funcinpec is relying on.
'The people love her royal highness,' Funcinpec spokesman Ork Socheat said, 'and right now, the people's heart is in the market. I think we can win 40 seats and be the number two party.'
But even a beautiful princess finds it tough to compete against the CPP, which has visibly and steadily improved infrastructure, building hundreds of schools and pagodas across the country - often prominently branded with the names of high-ranking CPP officials.
Elections are traditionally a time of violence, but this campaign has been relatively peaceful although the shooting deaths this month of opposition journalist Khim Sambo and his son have drawn an international outcry.
But Cheam Yeap countered that voters would have their minds more on positives, such as the government's work in securing UNESCO's recent listing of the ancient Preah Vihear temple as a World Heritage Site, Cheam Yeap said.
'We will always be scapegoats for these people to blame,' he said. 'Where is their proof? Some parties know they have lost the election already so they are clutching at straws.'
Wednesday, July 16, 2008
Cambodians will vote for the party that will tame inflation
14 July 2007
By Duong Sokha
Ka-set
Unofficial translation from French by Luc Sâr
Click here to read the original article in French
Click here to read the original article in Khmer
By Duong Sokha
Ka-set
Unofficial translation from French by Luc Sâr
Click here to read the original article in French
Click here to read the original article in Khmer
With the normalization of the situation in the country, Cambodians are approaching the 27 July ballot rather calmly. Midway into the election campaign, the relatively good atmosphere was upset by the assassination of a journalist working for a newspaper close the opposition SRP on Friday 11 July, except for this, Cambodians easily return to their daily problems and their expectations. The complaints expressed are often the echo of the political platform presented by the opposition party. Regardless of their political affiliations, all those asked by Ka-set in the streets swore that they will go to vote, but nobody dares confide about whom they will vote for. Everybody assured that they will closely look at the pertinence of the political programs promoted but the 11 parties running for the election, in order to make their decision, rather than blindly following a political leader.
A quiet campaign
Thach Sothon, a 37-year-old monk at the Moha Muntrey pagoda, is happy to see that political discriminations are lesser this year. “Parties do not create problems like the previous election campaigns. Before 2003, when two parades cross each others, we can see insult exchanges.”
Ieng Chuor, a 50-year-old farmer from Prey Veng, also observed the same thing. “Everything is going well this year, we only hear the loudspeakers of the political parties blaring their messages, but there was no confrontation,” he reported. Students, police officers met on the streets, all appreciate the peaceful climate which prevails during this campaign.
The general relief does not wipe entirely all the concerns. Some, like young monk Sum Wathakna, are concerned about the contest of the election results by the losing parties: “There are risks of trouble the day after the election … Several rumors are reporting this.”
Inflation: the major illness
The next government is highly expected by the population which saw its living condition in free fall since the beginning of last year because the inflation was deemed out of proportion. Whatever their jobs and political affiliations, people surveyed place inflation at the top of the next government’s priority, as well as the return to a more affordable cost of living.
Pross Mao, a 27-own newspapers kiosk owner, said that he did not care who will win: for him, the importance is for the price to decrease: “We cannot increase the price of the publications we sell, otherwise we would lose customers. Our incomes are low, inflation must be controlled,” he called.
Tuk-tuk drivers and other transporters are unanimous with the assertion above. “The government must call for a new price bidding and break up the monopoly for gasoline distributors,” an anonymous forty something man suggested. “How can we get out of it? Why the price of gasoline is cheaper in other countries?”
Chan Veasna, a 50-year motodoop driver, is also making the same complaint. “Price of gasoline is skyrocketing but customers are not ready to adjust to the travel fares…” he cursed while calling on the winning party to lower the price of goods in order to assure a better living condition for the citizens.
Kao Som Ol, a 38-year-old cop, is puzzled by the high cost of living, and, in front of us, he started to enumerate the price of basic goods while comparing them to their “past” prices, in order to underscore the scandalous situation. “I only earn 100,000 riels ($25) per month. We, cops, are fed up of working for such low salaries. The upcoming government must re-evaluate our salaries.”
Mao Vanna, a 51-year sugar cane juice seller, the situation is bitter: “Prices are climbing up, but our incomes do not! We ended up living on a day-to-day basis and pulling our children out of school to send them to work! This is unacceptable!”
Salary increases and jobs for the youths
“The current situation forces civil servants to find another job on the side, and students are sometimes forced to return to agriculture when they exhaust all the possibilities! Once graduated, they have no jobs, they couldn’t enter the job market!” According to Chun Singath, a student in tourism, the winning combination would be to increase the salaries of teachers and civil servants, and to provide jobs for the youths. Then, everything will be normal again, he promised.
For Dek Sovannthea, an English language teacher, the solution would be for the government to collect more revenues “by better collecting taxes and by fighting more efficiently against corruption.” Furthermore, he regrets to see the disparity between the number of job offers – “very numerous in the newspapers” – and the specializations undertaken by the students. He suggested imposing a quota system for the number of youth recruits in each company. On the other hand, Sum Wathakna, a young monk, was asking: “Why do they give more value to foreign engineers than to Cambodians?”
Sor Phanna, a psychology student, like her classmates, is concerned for her professional future. “To create jobs, the clan spirit must end, and civil servants reaching their retirement age must vacate their positions for the youths. I will support the party which will provide jobs for the youths!”
Immigration, again and always…
The presence of Vietnamese in Cambodia continues to bring concerns. Phon Ravy, a Pali student, demanded for an actual “control of Vietnamese immigration, as well as the control of smuggling from Vietnam.” “They (Vietnamese) are free to do business in our country, without being subjected to tax payment, unlike the Cambodians! Furthermore, those (Vietnamese) who live along the rivers pollute the environment. Not only do they invade us, but they also import their own culture. I want a government that is capable of protecting the territorial integrity!” he said. Kren Bopha, a psychology student, shares Phan Ravy’s concerns, while saying that she is reinvigorated by the recent listing of Preah Vihear temple as a World Heritage site. “Whoever can protect our territory will be able to put to an end the illegal immigration,” she learnedly pronounced.
Thach Sothon, a 37-year-old monk, even said that the Vietnamese “steal jobs from Cambodians.” He added: “Furthermore, whoever speaks their language (Vietnamese) always earns a better salary!” On the other hands, students were not as harsh in condemning the Vietnamese, some don’t understand “why they have the right to vote in Cambodia,” others suspect that they want “to populate Cambodia by giving birth through the Vietnamese prostitute ring and spread AIDS in Cambodia”…
… Other desiderata (needs)
Access to reasonably price – or free – healthcare for the poor is on the list of wishes people living in Phnom Penh want to see when they were asked. “When we arrive in the hospital, even before we are examined by a doctor, they ask if we have money!” said Sok Sol, a 34-year-old tuk-tuk driver, in anger. Chhi Samomeun, a factory worker from Svay Rieng province, called for the creation of hospitals and schools, and wished that the authorities take care of the development in remote areas.
The resolution of land disputes is also raised by some people, like So Vanna, who see in this issue a lack of solidarity among Cambodians. He also estimated that the issue has an impact on the economy, this social instability will “chill” potential investors.
Others, like Hasarat Karasan, a 50-year-old Cham seller, still remember the KR regime, and their principal wish is not to see the return of a “Pol Pot regime.” Sok Sophy, a 43-year-old garment factory worker, said that she mainly wants to see peace: “War must not return to trouble us again…”
A busy seller of second-hand clothes on Sihanouk Boulevard, is more direct and said that she has no interest whatsoever in politics: “I will sill go to vote, but I don’t know who I will vote for yet. My motto is: ‘God will help those who help themselves’. So, I work everyday from 7AM to 7PM, and I don’t expect anything from the parties!”
A quiet campaign
Thach Sothon, a 37-year-old monk at the Moha Muntrey pagoda, is happy to see that political discriminations are lesser this year. “Parties do not create problems like the previous election campaigns. Before 2003, when two parades cross each others, we can see insult exchanges.”
Ieng Chuor, a 50-year-old farmer from Prey Veng, also observed the same thing. “Everything is going well this year, we only hear the loudspeakers of the political parties blaring their messages, but there was no confrontation,” he reported. Students, police officers met on the streets, all appreciate the peaceful climate which prevails during this campaign.
The general relief does not wipe entirely all the concerns. Some, like young monk Sum Wathakna, are concerned about the contest of the election results by the losing parties: “There are risks of trouble the day after the election … Several rumors are reporting this.”
Inflation: the major illness
The next government is highly expected by the population which saw its living condition in free fall since the beginning of last year because the inflation was deemed out of proportion. Whatever their jobs and political affiliations, people surveyed place inflation at the top of the next government’s priority, as well as the return to a more affordable cost of living.
Pross Mao, a 27-own newspapers kiosk owner, said that he did not care who will win: for him, the importance is for the price to decrease: “We cannot increase the price of the publications we sell, otherwise we would lose customers. Our incomes are low, inflation must be controlled,” he called.
Tuk-tuk drivers and other transporters are unanimous with the assertion above. “The government must call for a new price bidding and break up the monopoly for gasoline distributors,” an anonymous forty something man suggested. “How can we get out of it? Why the price of gasoline is cheaper in other countries?”
Chan Veasna, a 50-year motodoop driver, is also making the same complaint. “Price of gasoline is skyrocketing but customers are not ready to adjust to the travel fares…” he cursed while calling on the winning party to lower the price of goods in order to assure a better living condition for the citizens.
Kao Som Ol, a 38-year-old cop, is puzzled by the high cost of living, and, in front of us, he started to enumerate the price of basic goods while comparing them to their “past” prices, in order to underscore the scandalous situation. “I only earn 100,000 riels ($25) per month. We, cops, are fed up of working for such low salaries. The upcoming government must re-evaluate our salaries.”
Mao Vanna, a 51-year sugar cane juice seller, the situation is bitter: “Prices are climbing up, but our incomes do not! We ended up living on a day-to-day basis and pulling our children out of school to send them to work! This is unacceptable!”
Salary increases and jobs for the youths
“The current situation forces civil servants to find another job on the side, and students are sometimes forced to return to agriculture when they exhaust all the possibilities! Once graduated, they have no jobs, they couldn’t enter the job market!” According to Chun Singath, a student in tourism, the winning combination would be to increase the salaries of teachers and civil servants, and to provide jobs for the youths. Then, everything will be normal again, he promised.
For Dek Sovannthea, an English language teacher, the solution would be for the government to collect more revenues “by better collecting taxes and by fighting more efficiently against corruption.” Furthermore, he regrets to see the disparity between the number of job offers – “very numerous in the newspapers” – and the specializations undertaken by the students. He suggested imposing a quota system for the number of youth recruits in each company. On the other hand, Sum Wathakna, a young monk, was asking: “Why do they give more value to foreign engineers than to Cambodians?”
Sor Phanna, a psychology student, like her classmates, is concerned for her professional future. “To create jobs, the clan spirit must end, and civil servants reaching their retirement age must vacate their positions for the youths. I will support the party which will provide jobs for the youths!”
Immigration, again and always…
The presence of Vietnamese in Cambodia continues to bring concerns. Phon Ravy, a Pali student, demanded for an actual “control of Vietnamese immigration, as well as the control of smuggling from Vietnam.” “They (Vietnamese) are free to do business in our country, without being subjected to tax payment, unlike the Cambodians! Furthermore, those (Vietnamese) who live along the rivers pollute the environment. Not only do they invade us, but they also import their own culture. I want a government that is capable of protecting the territorial integrity!” he said. Kren Bopha, a psychology student, shares Phan Ravy’s concerns, while saying that she is reinvigorated by the recent listing of Preah Vihear temple as a World Heritage site. “Whoever can protect our territory will be able to put to an end the illegal immigration,” she learnedly pronounced.
Thach Sothon, a 37-year-old monk, even said that the Vietnamese “steal jobs from Cambodians.” He added: “Furthermore, whoever speaks their language (Vietnamese) always earns a better salary!” On the other hands, students were not as harsh in condemning the Vietnamese, some don’t understand “why they have the right to vote in Cambodia,” others suspect that they want “to populate Cambodia by giving birth through the Vietnamese prostitute ring and spread AIDS in Cambodia”…
… Other desiderata (needs)
Access to reasonably price – or free – healthcare for the poor is on the list of wishes people living in Phnom Penh want to see when they were asked. “When we arrive in the hospital, even before we are examined by a doctor, they ask if we have money!” said Sok Sol, a 34-year-old tuk-tuk driver, in anger. Chhi Samomeun, a factory worker from Svay Rieng province, called for the creation of hospitals and schools, and wished that the authorities take care of the development in remote areas.
The resolution of land disputes is also raised by some people, like So Vanna, who see in this issue a lack of solidarity among Cambodians. He also estimated that the issue has an impact on the economy, this social instability will “chill” potential investors.
Others, like Hasarat Karasan, a 50-year-old Cham seller, still remember the KR regime, and their principal wish is not to see the return of a “Pol Pot regime.” Sok Sophy, a 43-year-old garment factory worker, said that she mainly wants to see peace: “War must not return to trouble us again…”
A busy seller of second-hand clothes on Sihanouk Boulevard, is more direct and said that she has no interest whatsoever in politics: “I will sill go to vote, but I don’t know who I will vote for yet. My motto is: ‘God will help those who help themselves’. So, I work everyday from 7AM to 7PM, and I don’t expect anything from the parties!”
Wednesday, July 02, 2008
Election law: Sam Rainsy cannot have a verbal attack on the CPP ... but it's OK for the CPP to physically attack other parties?
Picture of the "Thieves selling the Nation"Corruption raised to attack the CPP
Wednesday, July 02, 2008
Everyday.com.kh
Translated from Khmer by KI-Media
Opposition leader Sam Rainsy raised the corruption issue to attack the CPP during the SRP election campaign held on 01 July 2008 in Kratie province. Addressing to a group of about 300 supporters, Sam Rainsy said that the CPP led the country with corruption in all fields. Sam Rainsy accused the pictures of Chea Sim, Heng Samrin and Hin Sen hung along the various streets as being pictures of thieves who sold the nation. At the same time, Sam Rainsy also claimed that, being an economist, he understands very clearly about the Cambodian economy, and he said that the price of goods in Cambodia should not jump very high at all, he also said that if people vote for the SRP, then the price of goods could be lowered. He also severely criticized Hun Sen of being a blind person and one of the worst CPP leaders. Kham Phoeung, the CPP provincial governor for Kratie, reacted in anger to Sam Rainsy’s words, he said that he will hold discussions to find means to sue Sam Rainsy. Mrs. Thy Monary, an official of the Comfrel organization, said that according to the election law, during the election campaign, there could be no verbal attack on other political parties.
Thursday, June 26, 2008
Government, opposition begin election campaign in Cambodia
Funcinpec Party supporters out in force on the river front in Phnom Penh on the first day of campaigning for July elections in Cambodia. [RA]Thursday, June 26, 2008
ABC Radio Australia
"... a Cambodian opposition lawmaker has accused the government of dishonesty because it has not published the country's rate of inflation for the past three months ... The last published CPI stated that inflation rose 18.7% in January this year, however observers say the figure is closer to 30%."Cambodian Prime Minister Hun Sen has called on political parties running in next month's general election to compete honestly and to accept the result of the poll.
The 11 parties began the designated one-month campaign period today.
In a statement broadcast on state-run television, Prime Minister Hun Sen said all political parties should compete with honesty, dignity and honour and must accept the result of the election which reflects the will of the voters.
The statement also called for parties to make the national interest their priority.
The last general elections in July 2003 saw the kingdom plunged into a year of political stalemate as parties wrangled over forming a coalition.
A government was finally formed in July 2004.
Hun Sen has been in power for 23 years, making him Southeast Asia's longest-serving leader besides the sultan of Brunei.
Meanwhile, a Cambodian opposition lawmaker has accused the government of dishonesty because it has not published the country's rate of inflation for the past three months.
A Sam Rainsy Party member of parliament, Son Chhay, says Cambodia has not published its Consumer Price Index since March.
He has written a letter to the country's planning minister asking the Government about the matter.
Reports in local newspapers have speculated that the ruling Cambodian People's Party is not publishing the inflation rate because it wants to limit dissent before next month's general election.
A government spokesman, Son Sithan, says the rate hasn't been published because of a technical issue but said it would be released in the next two to three months.
The last published CPI stated that inflation rose 18.7 percent in January this year, however observers say the figure is closer to 30 per cent.
Monday, June 09, 2008
Economic growth to drop to 7 percent: International Monetary Fund
Monday, 09 June 2008
Neth Pheaktra
The Mekong Times
Neth Pheaktra
The Mekong Times
Cambodian economic performance remains robust though the pace of growth is expected to ease to around 7 percent in 2008, down from over 10 percent last year according to an International Monetary Fund (IMF) statement released Friday.
An IMF staff mission led by Luis Valdivieso, visited Cambodia from May 28 - June 5, to hold discussions with senior Cambodian government officials on macroeconomic developments and policies. The mission also met representatives from the business community and development partners.
The IMF said the drop in economic growth to around 7 percent this year mirrors slowing growth in the garment sector. Garment exports are under pressure because of a decrease in international demand and intensified regional competition, the IMF explained.
Cambodia’s garment industry is a major contributor to the gross domestic product (GDP) with 301 factories and over 340,000 workers exporting US$2.9 billion worth of garments last year.
“Tourism continues to expand at a healthy pace,” the IMF stated, with the Tourism Ministry reporting around two million tourists visiting Cambodia last year generating a total revenue of US$1.4 billion. Cambodia’s tourism industry accounts for 15 percent of GDP and employs tens of thousands, indirectly benefiting many more.
Cambodia, as a net rice exporter, should benefit from higher rice prices, the IMF said, but it warned higher food prices will adversely affect the most vulnerable, particularly the urban poor and the landless.
Inflation, running at 18.7 percent in January, was a major IMF concern.
The IMF welcomed measures to deal with inflation – a temporary ban on rice exports and the provision of subsidies – announced by Prime Minister Hun Sen Apr 23.
The IMF emphasized that maintaining a “prudent fiscal stance is key to moderating inflation pressures,” while recommending “efforts be made to limit the overall budget deficit to around one percent of the GDP in 2008, so as to continue building up government deposits of 2 percent of the GDP in the National Bank to help contain inflation pressures.”
The IMF mission also lauded the government’s “ongoing efforts to safeguard the financial system.”
An IMF staff mission led by Luis Valdivieso, visited Cambodia from May 28 - June 5, to hold discussions with senior Cambodian government officials on macroeconomic developments and policies. The mission also met representatives from the business community and development partners.
The IMF said the drop in economic growth to around 7 percent this year mirrors slowing growth in the garment sector. Garment exports are under pressure because of a decrease in international demand and intensified regional competition, the IMF explained.
Cambodia’s garment industry is a major contributor to the gross domestic product (GDP) with 301 factories and over 340,000 workers exporting US$2.9 billion worth of garments last year.
“Tourism continues to expand at a healthy pace,” the IMF stated, with the Tourism Ministry reporting around two million tourists visiting Cambodia last year generating a total revenue of US$1.4 billion. Cambodia’s tourism industry accounts for 15 percent of GDP and employs tens of thousands, indirectly benefiting many more.
Cambodia, as a net rice exporter, should benefit from higher rice prices, the IMF said, but it warned higher food prices will adversely affect the most vulnerable, particularly the urban poor and the landless.
Inflation, running at 18.7 percent in January, was a major IMF concern.
The IMF welcomed measures to deal with inflation – a temporary ban on rice exports and the provision of subsidies – announced by Prime Minister Hun Sen Apr 23.
The IMF emphasized that maintaining a “prudent fiscal stance is key to moderating inflation pressures,” while recommending “efforts be made to limit the overall budget deficit to around one percent of the GDP in 2008, so as to continue building up government deposits of 2 percent of the GDP in the National Bank to help contain inflation pressures.”
The IMF mission also lauded the government’s “ongoing efforts to safeguard the financial system.”
Sunday, June 08, 2008
Cambodia's economic growth set to slow down
Sunday, June 08, 2008
ABC Radio Australia
ABC Radio Australia
The International Monetary Fund predicts Cambodia's economic growth will slow by more than three percentage points this year, while inflation rises sharply.
With inflation at 18.7 percent in January, the IMF is urging the Cambodian government to build up its central bank deposits to curb inflationary pressures.
The IMF says growth will drop from 10.3 percent last year to 7 percent because of the downturn in garment exports.
While acknowledging the continuing robust economic activity from growth in tourism and higher prices for rice exports, the IMF warns the country's poor still remain vulnerable.
Under employment and low wages mean that some 35 percent of the country's 14 million people still live on under 50 US cents a day.
With inflation at 18.7 percent in January, the IMF is urging the Cambodian government to build up its central bank deposits to curb inflationary pressures.
The IMF says growth will drop from 10.3 percent last year to 7 percent because of the downturn in garment exports.
While acknowledging the continuing robust economic activity from growth in tourism and higher prices for rice exports, the IMF warns the country's poor still remain vulnerable.
Under employment and low wages mean that some 35 percent of the country's 14 million people still live on under 50 US cents a day.
Saturday, June 07, 2008
Statement by an IMF Staff Mission to Cambodia
June 6, 2008
Press Release No. 08/137
International Monetary Fund
Press Release No. 08/137
International Monetary Fund
An IMF staff mission led by Luis Valdivieso, visited Cambodia during May 28 to June 5, 2008 to hold discussions with senior officials of the Royal Government of Cambodia on recent macroeconomic developments and policies. The mission also met representatives from the business community and development partners.
At the conclusion of the visit, the mission issued the following statement:
"Economic activity in Cambodia remains robust, although the pace of growth is expected to ease to around 7 percent in 2008 from about 10¼ percent in 2007. The moderation mainly reflects slowing garment exports due to weaker external demand and heightened regional competition. Tourism continues to expand at a healthy pace. As a net rice exporter, Cambodia should continue to benefit from higher rice prices, although higher overall food prices will adversely affect the most vulnerable, in particular the urban poor and the landless.
"Inflation has increased sharply, the last published data indicate it rose to 18.7 percent in January 2008. The increase reflects both external shocks and domestic inflation pressures. External factors include higher international oil and food prices, and higher imported-goods prices due to the depreciation of the riel and dollar against the currencies of Cambodia's other major trading partners. Rapid domestic demand growth, fueled by very high growth in commercial bank lending, has also contributed to domestic inflation pressures. These factors have intensified since January. In particular, bank lending growth has increased to over 100 percent year-over-year in early 2008.
"The mission shared the authorities' concern with rising inflation and its adverse impact on the poor, and welcomed the initial package of policy measures to deal with the situation, announced by the Prime Minister on April 23, 2008. Discussions revealed that the policy package could usefully be strengthened to enhance its effectiveness and ensure the sustainability of the stabilization effort.
"The mission emphasized that maintaining a prudent fiscal stance is key to moderating inflation pressures. It recommended efforts be made to limit the overall budget deficit to around one percent of GDP in 2008, so as to continue building up government deposits of 2 percent of GDP in the National Bank to help contain inflation pressures. This would require ongoing strong revenue efforts, and ensuring that additional spending from announced measures is offset by restraining non-priority spending. The mission strongly agreed with the authorities on the importance of safeguarding priority spending, and welcomed their intention to make room for targeted measures to protect the poor within a prudent fiscal envelope.
"The mission supported the authorities' decision to tighten monetary policy as a compliment to fiscal prudence, including through raising reserve requirements, as an appropriate step to assist the effort to contain inflation pressures. This would help rein in very high credit growth and thus begin to reduce demand pressures that have contributed to inflation.
"The authorities emphasized their determination to continue strengthening bank supervision while improving standards for loan classification and collateral valuation. The mission commended ongoing efforts to safeguard the soundness of the financial system.
IMF EXTERNAL RELATIONS DEPARTMENT
Public Affairs Media Relations
Phone: 202-623-7300 Phone: 202-623-7100
Fax: 202-623-6278 Fax: 202-623-6772
At the conclusion of the visit, the mission issued the following statement:
"Economic activity in Cambodia remains robust, although the pace of growth is expected to ease to around 7 percent in 2008 from about 10¼ percent in 2007. The moderation mainly reflects slowing garment exports due to weaker external demand and heightened regional competition. Tourism continues to expand at a healthy pace. As a net rice exporter, Cambodia should continue to benefit from higher rice prices, although higher overall food prices will adversely affect the most vulnerable, in particular the urban poor and the landless.
"Inflation has increased sharply, the last published data indicate it rose to 18.7 percent in January 2008. The increase reflects both external shocks and domestic inflation pressures. External factors include higher international oil and food prices, and higher imported-goods prices due to the depreciation of the riel and dollar against the currencies of Cambodia's other major trading partners. Rapid domestic demand growth, fueled by very high growth in commercial bank lending, has also contributed to domestic inflation pressures. These factors have intensified since January. In particular, bank lending growth has increased to over 100 percent year-over-year in early 2008.
"The mission shared the authorities' concern with rising inflation and its adverse impact on the poor, and welcomed the initial package of policy measures to deal with the situation, announced by the Prime Minister on April 23, 2008. Discussions revealed that the policy package could usefully be strengthened to enhance its effectiveness and ensure the sustainability of the stabilization effort.
"The mission emphasized that maintaining a prudent fiscal stance is key to moderating inflation pressures. It recommended efforts be made to limit the overall budget deficit to around one percent of GDP in 2008, so as to continue building up government deposits of 2 percent of GDP in the National Bank to help contain inflation pressures. This would require ongoing strong revenue efforts, and ensuring that additional spending from announced measures is offset by restraining non-priority spending. The mission strongly agreed with the authorities on the importance of safeguarding priority spending, and welcomed their intention to make room for targeted measures to protect the poor within a prudent fiscal envelope.
"The mission supported the authorities' decision to tighten monetary policy as a compliment to fiscal prudence, including through raising reserve requirements, as an appropriate step to assist the effort to contain inflation pressures. This would help rein in very high credit growth and thus begin to reduce demand pressures that have contributed to inflation.
"The authorities emphasized their determination to continue strengthening bank supervision while improving standards for loan classification and collateral valuation. The mission commended ongoing efforts to safeguard the soundness of the financial system.
IMF EXTERNAL RELATIONS DEPARTMENT
Public Affairs Media Relations
Phone: 202-623-7300 Phone: 202-623-7100
Fax: 202-623-6278 Fax: 202-623-6772
Friday, June 06, 2008
Inflation a drag on Vietnam's economy
An investor in Hanoi watches as inflation fears shoved share prices down nearly 400 points on June 2, 2008. (Hoang Dinh Nam/AFP/Getty Images)Thursday, June 5, 2008
Marketplace
National Public Radio (USA)
Sky-high inflation and a slew of labor strikes have brought the Vietnamese economy to its knees. Host Bob Moon speaks with Marketplace's Scott Tong in Beijing about Vietnam's economic future.
TEXT OF INTERVIEW
Bob Moon: Vietnam has all the makings for a great investment -- good resources, lots of people, low labor costs -- but Vietnam's stock market has taken a huge tumble in the last year, falling below 400 points yesterday, its lowest level in two years.
And inflation is on the rise: from 7 percent to 25 percent in just one year.
Investors are paying attention.
Marketplace's man in Shanghai Scott Tong has been following the economic developments going on in China's neighbor to the south.
Hi Scott.
Scott Tong: Hello Bob.
Moon: Where is this inflation that we're hearing about in Vietnam coming from? I mean, I presume that there are food price problems and energy price problems, but 25 percent?
Tong: Well, that's right. All over Asia, there is a fair amount of imported inflation from elsewhere in the world, but in Vietnam, some of it is clearly seen as homemade. This is an economy that a lot of people say is overheating. It has been growing at an 8 percent clip for several years and the worry now is that perhaps the party's gotten out of control. A lot of economists are worried there's been too much lending, there's been too much government spending, basically, too much cash sloshing around in the system. And in my house, when there's too much cash sloshing around in the system, we buy stuff, and there's a sense in Vietnam that maybe there's been too much of that going on and when so many people are doing that, prices tend to go up.
Moon: Well, you speak of a party out of control. Let's kind of extend on that metaphor and borrow a little bit from Alan Greenspan. Is it time for the government over there take the punch bowl away?
Tong: The government has been trying, or it's been warning that it's going to do so. Just a couple days ago, some top officials said for the third or the fourth time that we're going to raise interest rates and we're going to have the banks try to calm this down, but there's a sense among a lot of people that they're hitting the breaks a little too late and they may not be doing enough. The World Bank and the Fitch Ratings agency and Morgan Stanley have already issued warnings about the Vietnam economy and we've seen investors starting to pull out a little bit. They're betting the currency is going to go down. The stock market has been down 50, 60 percent in the last year. So the arrows, for now anyway, are going in the wrong direction.
Moon: Let's make a comparison to China. It's labor and manufacturing costs have been on the rise and a lot of people have said that Vietnam is the next place to go. Is that still the case now?
Tong: There's a lot of excitement in a lot of sectors. One example is bedroom and dining room furniture. Bob, have you bought any lately?
Moon: Not recently.
Tong: Alright, well, just asking, because a lot of furniture makers, who almost all used to be in China, have moved in a hurry to Vietnam, or else set up their next factory in Vietnam and here's a picture of the labor costs: a Vietnamese worker in a furniture factory makes about $45 U.S. a month. That's less than half of what it is in China. The other excitement is the Vietnam retail market. Their research and consulting firm AT Kearney just ranked Vietnam their number one retail investment destination.
Moon: So dare we say that Vietnam could be the next China?
Tong: Well, a lot of self-proclaimed smart people are daring to go there, but most people aren't. Vietnam is cheap right now as far as labor, but for these giant manufacturing industries, it doesn't take long to go through a population of 80 million people or so and then they move on to the next cheaper place in the global economy. As far as the consumer market, well, China is 17 times the size of Vietnam, so that's the place where the big, big multinational companies who want to sell stuff to people... I mean, they're in China for 50 years or so. They don't exactly look at Vietnam the same way.
Moon: Marketplace's Scott Tong, joining us today from Beijing. Thank you Scott.
Tong: You're welcome Bob. Nice to talk to you.
TEXT OF INTERVIEW
Bob Moon: Vietnam has all the makings for a great investment -- good resources, lots of people, low labor costs -- but Vietnam's stock market has taken a huge tumble in the last year, falling below 400 points yesterday, its lowest level in two years.
And inflation is on the rise: from 7 percent to 25 percent in just one year.
Investors are paying attention.
Marketplace's man in Shanghai Scott Tong has been following the economic developments going on in China's neighbor to the south.
Hi Scott.
Scott Tong: Hello Bob.
Moon: Where is this inflation that we're hearing about in Vietnam coming from? I mean, I presume that there are food price problems and energy price problems, but 25 percent?
Tong: Well, that's right. All over Asia, there is a fair amount of imported inflation from elsewhere in the world, but in Vietnam, some of it is clearly seen as homemade. This is an economy that a lot of people say is overheating. It has been growing at an 8 percent clip for several years and the worry now is that perhaps the party's gotten out of control. A lot of economists are worried there's been too much lending, there's been too much government spending, basically, too much cash sloshing around in the system. And in my house, when there's too much cash sloshing around in the system, we buy stuff, and there's a sense in Vietnam that maybe there's been too much of that going on and when so many people are doing that, prices tend to go up.
Moon: Well, you speak of a party out of control. Let's kind of extend on that metaphor and borrow a little bit from Alan Greenspan. Is it time for the government over there take the punch bowl away?
Tong: The government has been trying, or it's been warning that it's going to do so. Just a couple days ago, some top officials said for the third or the fourth time that we're going to raise interest rates and we're going to have the banks try to calm this down, but there's a sense among a lot of people that they're hitting the breaks a little too late and they may not be doing enough. The World Bank and the Fitch Ratings agency and Morgan Stanley have already issued warnings about the Vietnam economy and we've seen investors starting to pull out a little bit. They're betting the currency is going to go down. The stock market has been down 50, 60 percent in the last year. So the arrows, for now anyway, are going in the wrong direction.
Moon: Let's make a comparison to China. It's labor and manufacturing costs have been on the rise and a lot of people have said that Vietnam is the next place to go. Is that still the case now?
Tong: There's a lot of excitement in a lot of sectors. One example is bedroom and dining room furniture. Bob, have you bought any lately?
Moon: Not recently.
Tong: Alright, well, just asking, because a lot of furniture makers, who almost all used to be in China, have moved in a hurry to Vietnam, or else set up their next factory in Vietnam and here's a picture of the labor costs: a Vietnamese worker in a furniture factory makes about $45 U.S. a month. That's less than half of what it is in China. The other excitement is the Vietnam retail market. Their research and consulting firm AT Kearney just ranked Vietnam their number one retail investment destination.
Moon: So dare we say that Vietnam could be the next China?
Tong: Well, a lot of self-proclaimed smart people are daring to go there, but most people aren't. Vietnam is cheap right now as far as labor, but for these giant manufacturing industries, it doesn't take long to go through a population of 80 million people or so and then they move on to the next cheaper place in the global economy. As far as the consumer market, well, China is 17 times the size of Vietnam, so that's the place where the big, big multinational companies who want to sell stuff to people... I mean, they're in China for 50 years or so. They don't exactly look at Vietnam the same way.
Moon: Marketplace's Scott Tong, joining us today from Beijing. Thank you Scott.
Tong: You're welcome Bob. Nice to talk to you.
Subscribe to:
Posts (Atom)
