Sam Rainsy Party predicts victory in upcoming election

Sam Rainsy surrounded by SRP supporters in Kampong Thom province (Photo: SRP)

Monday, 14 July 2008
Chun Sophal
The Mekong Times

The Sam Rainsy Party (SRP) has announced that it expects to win over 50 percent of the votes in the July 27 general election, claiming that victory in the poll has been assured by the electorate’s disillusionment with the present government.

“People can see the government’s powerlessness to prevent corruption and inflation,” SRP Secretary General Eng Chhay Eang told The Mekong Times Saturday, adding that the party expects to make gains particularly in Phnom Penh and Kampong Cham province.

“[The] SRP’s target is to win 62 seats in this election. We are confident because people know that only the SRP can eliminate corruption, lower goods prices, solve unemployment and provide free health services,” he said.

The SRP hopes to gain six more seats in the capital and five more in Kampong Cham, the nation’s most populous province, according to a recent prediction from the SRP. In the 2003 election, the SRP won just 24 of the 123 seats contested for the National Assembly (NA).

Information Minister and government spokesman Khieu Kanharith said the opposition party’s remarks were made to attract politicians who are looking to pay for high positions in the party. “He makes these claims now, but when he loses, he will announce that there is a threat, so he cannot return the money [to those who paid him],” he said, adding that, as a party that respects the law, the Cambodian People’Party (CPP) does not want to talk about other parties.

“But we will make every effort in this election to win 10 more seats,” he said. The CPP won 73 seats in the last election.

Civil society organizations monitoring the election have noted that political parties are stepping up their campaigns considerably, with less than a fortnight remaining until Cambodians go to the polls.

“We can see that political parties have made a lot of effort so far in the official 30-day campaign period,” said Hang Puthea, director of the Neutral and Impartial Committee for Free and Fair Election in Cambodia. “But we do not think these remarks about gaining [seats] are realistic.”

Optimistic predictions are typical around election time but the real results will only be known after the election, he said. “Only the voters can decide.”

Cambodian economic growth to drop to 7% in 2008

The IMF warned higher food prices will adversely affect the most vulnerable, particularly the urban poor and the landless.

PHNOM PENH, June 9 (Xinhua) -- Cambodian economic performance remains robust though the pace of growth is expected to ease to around seven percent in 2008, down from over 10 percent last year, local media reported Monday.

According to an International Monetary Fund (IMF) statement released recently, the drop in economic growth to around seven percent this year mirrors slowing growth in the garment sector, the Mekong Times newspaper quoted the IMF as saying.

Garment exports are under pressure because of a decrease in international demand and intensified regional competition, the IMF said.

Cambodia's garment industry is a major contributor to the gross domestic product (GDP) with 301 factories and over 340,000 workers exporting 2.9 billion U.S. dollars worth of garments last year.

"Tourism continues to expand at a healthy pace," the IMF stated, adding that with the Tourism Ministry reporting around two million tourists visiting Cambodia last year generating a total revenue of 1.4 billion U.S. dollars.

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.

An IMF staff mission led by Luis Valdivieso, visited Cambodia from May 28 to June 5, to hold discussions with senior officials of the Cambodian government on macroeconomic developments and policies.

Sam Rainsy addressing constituents in Prey Veng province

On 02 June 2008, MP Sam Rainsy visited constituents in the province of Prey Veng where he gave a speech on the economic and political On 02 June 2008, MP Sam Rainsy visited constituents in the province of Prey Veng where he gave a speech on the economic and political situation in Cambodia.

Government moves to end price gouging as gasoline prices hit record highs

Pump prices remain at records highs, hovering just below 6,000 riels per liter. (Photo: Tracey Shelton)

Friday, 06 June 2008
Written by Kay Kimsong
The Phnom Penh Post

Finance Minister Keat Chhon has ordered a special ministry committee to be formed to monitor the price of gasoline amid fears the fuel companies were gouging prices, which have crept towards record highs of 6,000 riels ($1.50) a liter during the past few days, a ministry official said.

The move, announced June 4, was the first time the government has intervened directly to try and ease spiraling gas prices, which have also driven up the cost of food and other consumer goods.

Finance Secretary of State Chea Peng Chheang told the Post that the ministry was worried that fuel companies were taking advantage of skyrocketing global oil costs to unfairly raise local pump prices

The new committee, while not putting caps on prices, would "work closely" with the fuel companies to determine how much should be charged for gasoline and diesel.

“Petroleum companies need not ask the ministry how much to raise prices, but they need to make sure they are not charging over market value,” he said.

The committee will also assess the cost of other consumer goods, which have risen sharply.

"The ministry just wants to understand why a company decides to raise prices for this or that, but the ministry will never interfere with a company's pricing decisions ... it is a free market in Cambodia," Chheang said.

Officials from fuel companies participating in the June 4 meeting with the finance minister said they welcomed the creation of the committee.

“I think the ministry wants to know the price of gasoline to make sure that petroleum companies are not overcharging,” said Hour Heng, vice president of the Cambodian fuel giant Sokimex.

“We accept the request of the ministry to control the price of gasoline and diesel,” he said. “It is an acceptable idea."

But they also pointed out that their pricing decisions were driven largely by international oil prices.

“We can’t predict future international oil prices and are not sure if the price of fuel in Cambodia will increase," Heng said, while Stephane Dion, managing director for Total Cambodge, wrote an email on June 5: “This is a simple question of supply and demand."

The government has already tried to curb the price of gasoline by not raising the tariff on imported fuel – a move that officials say will cost the government $300 million in uncollected tax revenue.

Diesel is currently taxed at $103 per ton, while the per ton tax on gasoline is $254.

Some one million tons of petroleum products, including gasoline and diesel, are imported each year into Cambodia, according to industry officials.

Even with this measure in place, fuel company officials say they are making very little money.

According to a senior official at Tela Kampuchea Company who did not want to be named, global oil costs have reduced the company's profits to about 200 riels per liter.

“We only make a little profit – many people do not know that," he said.

Inflation: the ministry of Economy is allegedly looking into it

04 June 2008
By Ky Soklim
Cambodge Soir Hebdo
Translated from French by Luc Sâr

A meeting took place on Wednesday 04 June between representatives of the ministry of Economy, and local representatives of the gasoline distribution companies: Caltex, Total, Tela and Sokimex. The reason for the meeting was the price increase of gasoline and goods. “The goal of this meeting was to round up the exact reasons behind the inflation. We must know if the price increase is conducted properly or not,” Chea Peng Cheang, state secretary at the ministry of Economy, declared. The rate of inflation climbed up to 18.7% in January 2008. Since the beginning of the year, the price of goods kept on increasing, in particular the price of foods. Faced with this inflation, the government claimed that it took measures, but for now, the results are few and far in between.

$300 mln in fuel subsidies and yet the highest price of gasoline in the region?

Cambodia's fuel subsidies to cost 300 mln USD in 2008

PHNOM PENH, May 28, 2008 (Xinhua) -- With discontent growing over rampant inflation, the Cambodian government has claimed it will spent 300 million U.S. dollars on fuel subsidies in 2008, local media reported Wednesday.

"We are trying to control inflation which is a phenomenon that influences Cambodia from outside by subsidizing gasoline," Keat Chhon, Cambodian Minister of Economics and Finance, was quoted by the Mekong Times newspaper as saying.

Keat Chhon predicted the subsidies would cost the state 300 million U.S. dollars by year's end, the newspaper said.

The government still imposes the same tax on oil - 309 U.S. dollars per ton for gasoline and 267 U.S. dollars for diesel - despite the fact imported oil has currently increased price to over 1,000 U.S. dollars per ton, Keat Chhon said.

"Currently, we do not take tax freight and insurance even though the oil price is rising," he added.

The Cambodian government claimed last month it had spent 29 million U.S. dollars on gasoline subsidies so far this year.

Government vows to reduce inflation by end of 2008

Economist Sok Hach (Photo: EIC)

Wednesday, 07 May 2008
By Chun Sophal
The Mekong Times

Soaring inflation is a painful thorn in the side of Cambodia’s burgeoning economy, but government officials are trying to soothe concerns with assurances that inflation wil be under control by the end of 2008.

“We will reduce the inflation rate to single digits starting from the end of 2008 and into next year,” said Hang Chuon Narun, secretary general of the Ministry of Economy and Finance. He cited the government’s recent efforts to encourage agriculture sector investment, subsidize oil prices, and increase banks’ reserve capital as reasons why inflation would decrease.

Sok Hach, director of the Economic Institute of Cambodia, said that Cambodia would be unable to reduce inflation if open competition with products produced by various dominant Okhna groups is not allowed.

“The government has to decrease taxes on all goods in general and lift barriers to competition in trade,” he said. “I believe we can help reduce inflation to some extent if we have a competition law and implement it well.”

Cambodia, which currently has an inflation rate of over 10 percent, has yet to introduce a trade competition law even though it is a requirement for the Kingdom’s continued membership of the the World Trade Organization.

Economists say that the soaring inflation in Cambodia is partially due to the rising global oil prices, the devaluation of the US dollar and increasing international food prices. Internal factors such as high goods taxes and the lack of open product competition exacerbate the situation.

John Nelmes, International Monetary Fund resident representative for Cambodia, said increased cash flow in Cambodia is linked with the country’s inflation rate. “I think that increasing obligatory reserve funds to reduce growth is a positive step,” he said.

Early this year, the government paid out US$300 million in oil subsidies, US$41 million in electricity subsidies and cut taxes on imported agricultural materials in order to curb increasing prices.

Chhit Sam Ath, director of the NGO Forum on Cambodia, said inflation is a major problem severely affecting the nation’s poor.

“I believe government subsidies can help people,” he said. “I think the government should try its best to lower and stabilize inflation by dealing with the impact from both internal and international factors.”

Sam Rainsy Asks US for Clean Elections

By Sok Khemara, VOA Khmer
Washington
24 April 2008

Click here to listen to the program in Khmer

Opposition leader Sam Rainsy called on US officials in Washington this week to help ensure July’s general elections are free and fair.

Sam Rainsy met with State Department Assistant Secretary Christopher Hill Tuesday, as well as members of the US Congress during a two-week visit to the US.

“The election can be free and fair, as long as the ruling party stops manipulating the courts to suppress the opposition,” Sam Rainsy told VOA Khmer Wednesday.

He was referring to the recent arrest of an opposition activist on charges relating to land issues.

In meetings with officials, he said, he had asked the US to respect the right of Cambodian people for assembly.

The opposition was planning a demonstration soon to demand the government act to mitigate the effects of inflation in the country, he said.

“When the price of goods increases, salaries should be increased at the same time,” he said.

Sam Rainsy himself is facing a lawsuit in Cambodian courts over remarks he made at an April 17 ceremony to mark the fall of Phnom Penh to the Khmer Rouge.

Foreign Minister Hor Namhong has filed suit alleging that Sam Rainsy singled him out as a member of the Khmer Rouge, a charge the minister denies.

Sam Rainsy said Wednesday he was not worried about the suit.

“Those who react like this have a guilty conscience,” he said.

“I did not mention anyone’s name,” he said. “I just said in general.”

There remain many officials in government who participated in the Khmer Rouge regime, he said.

Inflation Could Affect Voter Turnout, Experts Worry

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
23 April 2008

Government spokesman Khieu Kanharith said inflation was a product of the free market, and the government was unable to stop it.

[Editor's note: In the weeks leading into national polls, VOA Khmer will explore a wide number of election issues. The "Election Issues 2008" series will air stories on Tuesday and Wednesday, followed by a related "Hello VOA" guest on Thursday. This is the first in a two-part series examining inflation.]

As the cost of goods across the country continues to rise, election experts worry that voters will be less likely to make a trip to the polls in July, while voters themselves say they are so worried about the cost of living they can’t focus on the elections.

Sok Vannak, who left her hometown in Svay Reing province to work at a garment factory more than 10 years ago, said her $50 dollar monthly salary won’t allow her to go vote back home. This is because of high inflation, especially an increas in traveling costs.

“Now you have to spend 30,000 riel for one-way travel, but before only 6,000 riel,” she said, joined by a group of workers and university students near a wooden house in the capital. “This high increase means I will not go to vote because I have no money for traveling.”

Voting is the last thing on the minds of many Cambodians, especially the poor, who have daily concerns and are feeling the bite of rising costs.

“How can we think about the election if we are so poor?” asked Ty Sokhak, a resident in Battambang province, raising her voice. “At the moment eating is more important.”

Competing parties in July’s elections recognize the difficulty in getting people to vote when they are worried about daily living, experts said. The parties also have to contend with people’s skeptical attitudes toward politicians.

Ly Sothea Rayuth, senior program officer at the National Democratic Institute, said inflation not only made Cambodians uncaring about the election but also could prevent many from leaving their jobs in the capital on Election Day.

“In a country facing high inflation, it not only affects people’s livings, but it also affects the election process,” he said.

Ly Sothea Rayuth warned that a worst-case scenario could see a reduced number of voters, especially if the government can’t find a way to reduce the costs of living or travel.

Government spokesman Khieu Kanharith said inflation was a product of the free market, and the government was unable to stop it.

More than 8 million people are registered to vote this year, but the number of people coming to the polls has decreased in recent elections.

The National Election Committee counted 90 percent of voters casting ballots in 1993, but only 68 percent voting in last year’s commune elections.

Koul Panha, director of the independent Committee for Free and Fair Elections, urged people to overcome the costs of travel and vote.

A vote was a way of standing up and speaking to a problem, he said.

“If people vote for me, there is no war, and you don’t have to run into the trenches”: Hun Sen intents to declare a war if he loses the election?

Hun Sen Calls for Political Support From Business

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
23 April 2008

Click here to listen to the Khmer audio

Prime Minister Hun Sen appealed to foreign and local businesses to support him in the upcoming election period, as his ruling party faces ongoing criticism for inflation.

His appeal, during a forum between the government and the private sector in Phnom Penh, comes as the ruling Cambodian People’s Party is experiencing pressure from economic forces, such as inflation, the high cost of food and a recent rice crisis.

“I would like to inform you all that whatever Hun Sen does for winning, it’s not only winning for Hun Sen and the CPP, but the whole nation wins,” the prime minister said.

“I would like clearly to inform you all that I have made everything for the Cambodian nation, but I also need the election won,” Hun Sen added. “If the private sector wants me to participate in continually leading you all, you all support me, because if you all let me lose, you also lose.”

Political observers say that many of the high-profile businesses in Cambodia run mutli-million-dollar enterprises with the support of the ruling party.

“If people vote for me, there is no war, and you don’t have to run into the trenches,” Hun Sen also said.

Human Rights Party Vice President Keo Remy said Hun Sen’s speech was a sign of pressure on the businessmen.

“If HRP wins the election, there is no war and fear for people, because HRP doesn’t take anyone as an enemy and doesn’t take revenge against anyone,” he said.

Cambodia was unlikely to experience war no matter who wins the election, he said.

Sam Rainsy Party parliamentarian Yim Sovann said Hun Sen and the ruling party had failed to progress the economy and were now turning to businesses for help.

Ly Sothea Rayuth, a program officer for the National Democratic Institute, said Hun Sen’s speech in a public venue “threatened the spirit of voters.”

Observer concerned about the election process

19 April 2008
By Mom Sophon
Radio Free Asia
Translated from Khmer by Socheata

An election observer expressed concerns over the upcoming election process, saying that it will not be smooth because the NEC cannot increase the salary for its employees at a time when the price of goods is soaring.

Dr. Hang Puthea, executive director of the NICFEC organization, told RFA on 18 April that he is concerned about the NEC budget shortfall.

Dr. Hang Puthea said: “Normally, the process must be planned in advance, and it should be linked to the budget plan. Therefore, if there is a shortfall, I think the election will not be smooth. With the price inflation, I believe that workers and officials preparing the election, at the commune and provincial levels, will be deceived and they will be concerned about their living conditions, and at times, they may be thinking more about their living conditions rather than the work they are charged to undertake.”

In the past, the NEC announced that it needs $17 million to organize the fourth legislative mandate election, however, it is still short of $2.5 million from the total needed.

Tep Nytha, NEC secretary-general, indicated that, for the NEC employees working at the provincial or commune levels will not see any salary increase.

Tep Nytha said: “We are also concerned about this problem because in our budget plan, we included a 2% actual price increase, but if we compare to the rate of price inflation for materials needed for the election, it is more than 2%. Nevertheless, a large portion of our budget had been spent already, besides that, other spending was also done prior to the inflation. The material which saw a price increase includes: additional voting boxes, steel cases needed at the commune election booths. This also affects (the purchase of) paper. It will also affect other measures, such as transportation, this is due to the increase in the price of gasoline.”

Tep Nytha added that even with the NEC budget shortfall, the preparation for the election will not be a problem.

Keo Remy, HRP vice-president, said that even if the NEC faces budget shortfall, he still hopes that the election will be conducted well, and that it depends on the NEC officials abiding by the election law and rules.

Muth Chantha, NRP spokesman, indicated that he does not have enough confidence in the NEC yet. He said that the progress for the election preparation does not depend on the salary (of NEC employees), but it depends on the neutrality of the NEC officials instead.

Inflation, Increased Cost of Living Expected to Hurt Cambodian Families

By Sok Khemara, VOA Khmer
Washington
15 April 2008

The world is facing an “economic tsunami,” and it was up to everyone, including the government, private sector and non-governmental agencies to curb the impact - Chea Vannath

With inflation increasing, civic leaders are concerned children will face malnutrition or drop out of school to help their struggling families.

The price of rice and other goods continues to increase, pinching the pockets of many everyday Cambodians.

As far back as 2004, when there was little inflation, 45 percent of Cambodian children under the age of 5 faced malnutrition, said Chea Vannath, former director of the Center for Social Development, as a guest on “Hello VOA” Monday.

That number is likely to now increase, she said.

The world is facing an “economic tsunami,” she said, and it was up to everyone, including the government, private sector and non-governmental agencies to curb the impact.

The UN and IMF have warned of food insecurity worldwide, and already countries like Haiti and Egypt have seen riots over the rising price of goods.

“Some of the countries have no food stores, unlike Cambodia, we have them,” Chea Vannath said.

Still, if the government isn’t careful, the situation could turn “dire,” as the next rice harvest is not until October or November, around the festival of Pchum Ben, she said.

Rice millers and the government should be seeking to buy rice at the price of foreign businessmen in order to help people, she said.

Chea Mony, president of the Free Trade Union, said Monday that inflation was a continuing concern among workers, despite a proposed $6 increase to monthly income.

Workers have not received an exact date as to when the increase will come, he said, also a guest on “Hello VOA” Monday.

The $6 increase to monthly income came after the Free Trade Union threatened sweeping strikes, as the cost of living was surpassing a worker’s monthly income.

The opposition meanwhile has threatened to stage a second rally in coming weeks to protest the rising cost of goods.

Chea Mony said he had not called on all his workers to join one demonstration earlier this month, leaving it up to individuals.

His union is independent, he said.

Royal astrologist uncovers a rat: Wives of high ranking officials will be stewing in anger ... hopefully no more Pisith Pilika-type case

A high ranking official in Cambodia (L), a pretty woman whose life was cut short by hired gunmen (C), and the powerful wife of a Cambodian high ranking official (R). The royal astrologer predicts a "déja-vu" scenario for this year of the Rat.

Cambodian royal astrologer says Year of Rat will bring angry wives

Sun, 13 Apr 2008
DPA

Phnom Penh - Cambodia celebrated its New Year's Eve on Sunday, with the royal palace astrologer predicting a troubled Year of Rat ahead, including poor crops, inflation and angry wives. Like neighbouring Thailand and Laos, Cambodia follows the Chinese horoscope, but celebrates its lunar New Year in April each year.

"This year's agriculture is not good, with half of the vegetable and fruit crop destroyed," royal palace astrologer Im Borin said by telephone.

"There will be many people killing each other, the good and kind will be looked down on by society ... the price of salt will increase, and wives of high ranking officials will be stewing in anger," he predicted.

Cambodia brought in a controversial monogamy law in 2006 which made adultery a criminal offence punishable by 18 months in jail. The law is believed by many have been devised under pressure from powerful and jealous wives of high-ranking officials.

However it has done little to curb the common practice of men who can afford to taking mistresses, or "second wives" and there has only been one successful prosecution so far.

One high ranking male official was even reported as endorsing adultery as a good way of relieving tension and spicing up a marriage in an interview with the English-language Cambodia Daily newspaper soon after the legislation was passed.

Cambodian wives have become internationally notorious for taking out the competition by hiring gunmen or dousing them with acid, making Year of Rat a year of living dangerously for many young Cambodian women if the astrologer is correct.

It's already April 2008, and Hang Chuon Naron still talks about the 2007 inflation rate: Time to wake up!

Cambodia is still confident even though the economy growth is in decline

Wednesday, April 9, 2008
Everyday.com.kh
Translated from Khmer by Socheata

Hang Chuon Naron, the deputy secretary of state of the Ministry of Economy and Finance, claimed that even if Cambodia is affected by inflation, it will not seriously affect the population in the country at all. Hang Chuon Naron said on 08 April at the UNDP office that even if Cambodia is one of the countries affected by inflation, this does not affect the population in general, and in particular, farmers are not faced with serious problem either. He indicated that the inflation issue is not particular to Cambodia alone, but that it is an issue affecting the entire region and the entire world, in spite of the fact that inflation rate in Cambodia is lower than that in Burma, Thailand, Vietnam, and China. He indicated that in 2007, the inflation rate was only 5.8%, whereas this rate in 35% in Burma, 15% in Vietnam, 9% in China, and 6% in Thailand.

Political Cartoon: The Royal Karaoke Group from China

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

World Bank: Growth Despite Inflation [... but inflation is a concern for poor Cambodians]

By Mean Veasna, VOA Khmer
Original report from Phnom Penh
01 April 2008

Cambodia's economic growth is expected to remain positive, despite nettling concerns over inflation, World Bank officials said Tuesday.

Inflation has increased in recent months, and it is not likely to decrease to its original level, which is a concern of the poorest Cambodians, a World Bank official said, following a semiannual report.

Cambodia's economy grew by 9.6 percent in 2007, according to the World Bank. That growth rate is expected to shrink in 2008, even as inflation hit a nine-year high at the end of 2007, the World Bank said.

"As we said in the report, the high inflation rate will not pose any serious threat to Cambodian economic growth for 2008, but it does impact the poor," said Huot Chea, a economist for the World Bank's Cambodia office.

Inflation will not decrease to its original level, but is likely to increase next year, from 5 percent to 10 percent.

"I guess about 25 percent of the poorest people in our country spend 70 percent of their total income on food," Huot Chea said. "So as long as food prices are rising, it automatically has a worse impact on their daily living standard."

Earnings that once bought 2 kilograms or 3 kilograms of rice can only buy 1 kilogram, he said.

The government has responded positively on inflation, he said, citing as example the recent ban on rice exports, the lifting of a ban on imported pigs and pork products and the release of a rice surplus on the market at a subsidized price.

However, sustained inflation could further hamper the government's poverty reduction efforts, said Tim Conway, a senior poverty specialist in the World Bank's Cambodia office.

Chea Peng Chheang, secretary of state for the Ministry of Finance, said Tuesday that estimates of the World Bank echoed predictions of the ministry.

Cambodia's high economic growth rate is sustainable, he said, because the growth is based mostly on agriculture, as well as tourism and construction.

"Of course, there will be an impact from inflation," he said. "But this inflation mostly affects countries that have important business with America."

Poverty reduction is not likely to be affected, he said, because the government has a strategy to prevent and delay the rate of inflation.

Rocketing inflation hurting Cambodia's poor, World Bank says

Tue, 01 Apr 2008
DPA

Phnom Penh - Double-digit inflation would not hurt the Cambodian economy overall but could have a dire affect on the country's millions of poor, a World Bank economist said Tuesday. Like most of East Asia and the Pacific, Cambodia had been badly hit by inflation with the year-on-year rate at the end of 2007 reaching a nine-year high of 10.8 per cent, Huot Chea said.

However, the bank said Cambodia's economy continued to grow rapidly with gross domestic product (GDP) up an estimated 9.6 per cent last year.

"High inflation rates will not pose a serious threat to the Cambodian economy but will impact on the poor," Chea told journalists.

"About 25 per cent of poor people spend 70 per cent of their income on food," the economist said. "As long as food prices keep rising, this will automatically impact on the poor."

He said inflation had pushed the price of the national staple, rice, up so far that what would have once bought 3 kilograms in some cases now just bought 1 kilo.

Hikes in international oil prices, which have put the cost of petrol up to 1.25 dollars a litre in a country where millions earn less than a dollar a day had also contributed, he said.

The bank also expressed concern about Cambodia's growing trade deficit, which it estimated would grow from 6.8 per cent to 7.3 per cent of GDP this year.

However, overall, it said Cambodia's economy was in good shape and was mainly being impacted by outside factors, including the rising world price of oil and the crisis in the US economy.

"Although risks have increased, economic prospects for 2008 remain strong," the bank said in a press release.

Political Cartoon: Inflation

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

Food inflation hits Cambodia's poor, threatens hunger

Workers cut up fish in preparation for making 'prahok' (fermented fish paste) at Chrang Chamres village
Worker cut up fish in preparation for making 'prahok' (fermented fish paste) at Chrang Chamres village
Workers mash fish in preparation for making 'prahok' (fermented fish paste) at Chrang Chamres village

CHRANG CHAMRES, Cambodia (AFP) — On the long, gently sloping bank of Cambodia's Tonle river, Doem Lao chops half a dozen large fish heads in the early morning for the one meal that her family will eat that day.

It is the 45-year-old farmer's fourth unseasonably cold dawn in this quiet Muslim neighbourhood on the outskirts of Phnom Penh, where her extended family has set up camp with others from their village in the southern province of Takeo.

Like tens of thousands of rural Cambodians, they have joined the annual migration to the river to buy enough fish to make a year's worth of prahoc, a pungent fermented paste that is the only source of protein for many in the country's impoverished rural regions.

But the rice they brought from home has nearly run out and the fish have yet to appear in the large nets strung across the river in front of their camp.

The crude bamboo and metal mesh processing stalls on the riverbank are silent -- and February is the last month of the fishing season.

A sudden drop-off in the numbers of prahoc fish has seen their price more than triple this year, up to as high as 50 US cents a kilogramme from around 12 cents, putting this most basic of Cambodian commodities out of reach for many.

While not normally a benchmark by which to measure food security, prahoc prices have highlighted the spiralling costs of staple goods that are threatening Cambodia's poorest with hunger.

"We eat prahoc every day. Last year we made so much that we could sell some or trade it for rice," Doem Lao said, sitting in a tight circle with other village women and a few young children, while their men stood further up the river bank smoking cigarettes in anticipation of another long day spent waiting.

"This year I'm not at all hopeful. Some of us have left already. We're not going to have enough prahoc. We're not even going to have enough rice," she said.

Across Asia the cost of food is rising, for a variety of reasons, from higher demand and spiking global oil prices to environmental factors like global warming which disrupt the normal agricultural cycles.

But while other regional governments have responded by cutting import tariffs or establishing national food stockpiles, Cambodia appears reluctant to step in and halt the continuing upward climb of food costs.

For poor Cambodians, this means that in addition to losing their traditional staples like prahoc, they are not able to supplement their already meagre diets with other foods, particularly meat.

"Everything now is so expensive," said another village woman, Bhum Sap, rattling off the current prices of chicken, pork and beef, which can cost as much as five dollars a kilogramme, a fortune for Cambodia's estimated 4.6 million people struggling to live on less than one dollar a day.

Cambodia, in some ways, has become a victim of its own economic success. The country has recorded economic growth averaging 11 percent over the past three years, spurred on by a galloping tourism sector and strong garment and building industries.

Growing interest by foreign investors and a real estate boom that has helped create more than a few overnight millionaires have resulted in an unprecedented explosion of wealth.

But the sudden influx of cash into the fragile economy has not come without its pitfalls.

Over the past year inflation has spiked at 10.8 percent, compared with 2.8 percent at the end of 2006, driving up the cost of food and other staple goods and pushing the most vulnerable deeper into poverty.

"About 8.5 percentage points of December's inflation rate of 10.8 percent was accounted for by food price inflation," said the International Monetary Fund's Cambodia representative John Nelms.

For as many as 2.6 million people living in extreme poverty, the situation has been worsening over the last several years, which have been marked by poor harvests brought on by natural disasters such as flood or drought.

"Too many Cambodians still suffer from hunger and malnutrition for some or most of the time," the World Food Programme (WFP) said on its website.

The unrelenting rise in food costs only adds more depth to their misery.

"WFP is very concerned about the general increase of the cost of the staples, in Cambodia as well as elsewhere," the agency's country director for Cambodia, Thomas Keusters, told AFP.

Food inflation has even affected aid efforts at a crucial time, as aid agencies anticipate the need for more handouts in rural areas facing a leaner than normal year ahead.

In January last year, the WFP paid 237 dollars per metric tonne of rice, a cost that has now risen to 367 dollars a tonne, Keusters said.

"For every dollar received from the international and local donor community, we buy 55 percent less rice. With the general increase in the cost of food, the need for food assistance will not decrease," he said.

"On the contrary. As Cambodia faces new challenges such as climate change, changes in food availability, high energy prices, globalization and many more, we all need to strategise better," he said.

Workers Meet MPs Over Salaries

By Kong Soth, VOA Khmer
Phnom Penh
18 February 2008

Factory laborers met with their parliamentary representatives Sunday to discuss in a public forum the chance of better salaries to offset the rising costs of goods.

The group of more than 500 union leaders and garment factory workers met Ho Naun, of the Cambodian People's Party; Khieu San, of Funcinpec; and Ho Vann, of the Sam Rainsy Party in Ang Snuol district, Kandal province.

Srey Oun, a garment factory worker, asked them to consider the problems of inflation, low salaries and, especially, pressure from garment factory owners.

"I'll make a proposal about the salary," she said. "It is only $50 a month. It is not enough to respond to the price in the market at the present time…So I propose to have at least $80 per month."

Kao Poeun, deputy secretary general of the Cambodian Labor Confederation, said authorities did not consider the law when making decisions.

Pov Vorn, president of the Association of Democracy and Independent Economy, said there was an impact to motorcycle taxi drivers and street vendors, especially those who have recently been ousted from Phnom Penh's riverfront.

"The order police, especially those who work in the market, they cannot stop the Land Cruisers," he said. "They can only stop the motorbikes and the trailer-motos. Please, your excellencies, take it seriously as your interest, because [the drivers and vendors] are your voice for voting."

The National Assembly members promised to take the forum's concerns to the next legislative session, and to call government leaders before them for questioning.

The forum was part of an ongoing program put on by the National Democratic Institute.