By Ros Dina
Ka-set
Cambodian prime Minister Hun Sen once again reacted strongly to the alarmist conclusions released in a report by the Economist Intelligence Unit (EIU) , a branch of the British group The Economist, according to which Cambodia is amongst countries at high risk of political instability due to the global economic crisis.
Released at the end of March, the report ranks Cambodia fourth among countries where risks of social insurrection and political instability are at their highest after Zimbabwe, Chad and the Democratic Republic of the Congo, at the same level as Sudan but before Iraq, Haiti, Pakistan and Afghanistan.
The government already denounced the “political orientation” of the report, and Hun Sen quoted that very argument in his opening speech for the Fifth Asia Economic Forum (AEF) on Monday April 6th in Phnom Penh. “[This report] is a political attempt to stop flows on investments [in Cambodia], since here, we still manage to attract foreign investors”, he denounced.
According to the prime Minister, “no project” was withdrawn by investors. And he gave as evidence the “current” building of hydroelectric power plants which is “gaining pace” with the cooperation of China. Hun Sen also said he recently met a delegation of American investors working in countries which are part of the ASEAN, who allegedly said they were “ready to come and do business in Cambodia”.
For the head of government, Cambodia is not at risk of suffering a political crisis because of famine, as feared by economists at the EIU. If those experts mean this, it is because they “were wearing glasses with a prescription too strong for their eyes”, he said ironically. The risk of scarcity is small, the prime Minister added, since , on the contrary, the country is faced with crisis in rice exports as important stocks have not been sold abroad yet.
Hun Sen then urged the Cambodian population to rally and evade pessimistic predictions made by the economists. The head of Government prided himself on the fact that “In 2005, we forecast a growth rate for the economy situated between 1.6% and 2.4% in Cambodia. But we managed to climb all the way up to 13.3% and for five consecutive years, the country’s rate for economic growth reached an average of 10.4%”.
Predictions released by the main regional and international institutions for 2009 were recently revised downwards; especially those published by the International Monetary Fund (IMF) which now fears recession might befall Cambodia. The IMF bet on a -0.5% negative growth rate. At the Asian Development Bank (ADB), experts reckon for their part that the growth rate of the Cambodian GDP will be around 2.5%.
Besides, the Prime Minister also stressed that the Council of Ministers adopted on Friday April 3 a bill for the rectification of the 2009 Budget Law, intended for the support of agriculture along three lines: short-term loans to buy producers some rice at a reasonable price and ensure food security and the stability of prices; medium-term loans for companies in charge of transforming rice, in order to reinforce capacity for storage and drying; finally, medium and long-term loans with a view to support investments relating to the transformation of agricultural produce, to fulfill local needs and exports.
In a mission conclusion released in early March, the IMF advised the Cambodian government to allow budget deficit to rise around 4.75% and inject some 500 million US dollars in support of national economy. Opposition leader Sam Rainsy also put forward the idea of a stimulus plan, as several dozens of garment manufacturing factories closed down in the country and more than 50,000 workers were left jobless.
Released at the end of March, the report ranks Cambodia fourth among countries where risks of social insurrection and political instability are at their highest after Zimbabwe, Chad and the Democratic Republic of the Congo, at the same level as Sudan but before Iraq, Haiti, Pakistan and Afghanistan.
The government already denounced the “political orientation” of the report, and Hun Sen quoted that very argument in his opening speech for the Fifth Asia Economic Forum (AEF) on Monday April 6th in Phnom Penh. “[This report] is a political attempt to stop flows on investments [in Cambodia], since here, we still manage to attract foreign investors”, he denounced.
According to the prime Minister, “no project” was withdrawn by investors. And he gave as evidence the “current” building of hydroelectric power plants which is “gaining pace” with the cooperation of China. Hun Sen also said he recently met a delegation of American investors working in countries which are part of the ASEAN, who allegedly said they were “ready to come and do business in Cambodia”.
For the head of government, Cambodia is not at risk of suffering a political crisis because of famine, as feared by economists at the EIU. If those experts mean this, it is because they “were wearing glasses with a prescription too strong for their eyes”, he said ironically. The risk of scarcity is small, the prime Minister added, since , on the contrary, the country is faced with crisis in rice exports as important stocks have not been sold abroad yet.
Hun Sen then urged the Cambodian population to rally and evade pessimistic predictions made by the economists. The head of Government prided himself on the fact that “In 2005, we forecast a growth rate for the economy situated between 1.6% and 2.4% in Cambodia. But we managed to climb all the way up to 13.3% and for five consecutive years, the country’s rate for economic growth reached an average of 10.4%”.
Predictions released by the main regional and international institutions for 2009 were recently revised downwards; especially those published by the International Monetary Fund (IMF) which now fears recession might befall Cambodia. The IMF bet on a -0.5% negative growth rate. At the Asian Development Bank (ADB), experts reckon for their part that the growth rate of the Cambodian GDP will be around 2.5%.
Besides, the Prime Minister also stressed that the Council of Ministers adopted on Friday April 3 a bill for the rectification of the 2009 Budget Law, intended for the support of agriculture along three lines: short-term loans to buy producers some rice at a reasonable price and ensure food security and the stability of prices; medium-term loans for companies in charge of transforming rice, in order to reinforce capacity for storage and drying; finally, medium and long-term loans with a view to support investments relating to the transformation of agricultural produce, to fulfill local needs and exports.
In a mission conclusion released in early March, the IMF advised the Cambodian government to allow budget deficit to rise around 4.75% and inject some 500 million US dollars in support of national economy. Opposition leader Sam Rainsy also put forward the idea of a stimulus plan, as several dozens of garment manufacturing factories closed down in the country and more than 50,000 workers were left jobless.
