Opposition MPs want Hun Sen to brief National Assembly about the economic crisis

Click on the letter in Khmer to zoom in

27 Jan 2009
By Ung Chamroeun
Cambodge Soir Hebdo
Translated from French by Luc Sâr
Click here to read the article in French

On Tuesday 27 January, SRP and HRP MPs sent a letter to Hun Sen in which they indicated their wish to see the setup of special bailout budget to soften the downfall of the economic crisis.

The request by opposition MPs was sent to Hun Sen through the Parliament procedure, i.e. in the care of Heng Samrin, the president of the National Assembly. The letter contains essentially the demands previously made by Sam Rainsy to Hun Sen on 16 January.

The MPs ask the government “to prepare a $500 million bailout budget to counter the downside effects of the economic crisis.” They pointed out the difficulties faced by farmers with the current price drop of some essential agricultural products such as rice, corn, beans, cassava, and rubber. This problem affects millions of Cambodians, the opposition MPs indicated. They would like “to know the mechanism and measures planned by the government to get the country out of this crisis,” and they underscore in their letter that other countries in the region, such as Indonesia, China, India, Vietnam, Malaysia and Thailand all have prepared “bailout budget package” to improve the daily life of farmers by lending them money with low interest rate.

For Son Chhay, the SRP spokesman, Keat Chhon, the minister of Economy and Finance, must choose a date when he will provides his answers to the MPs’ questions on the NA floor. Son Chhay also invoked Article 96 of the Constitution which stipulates that MPs have the right to question the royal government when an negative impact hits the country, and when the government must find urgent solutions to these issues.

Thai consumers shun Cambodian produce

26 Jan. 2009
By Im Navin
Cambodge Soir Hebdo
Translated from French by Tola Ek
Click here to read the article in French

Since July 2008, tension between the two countries led to a drop in the sale of Cambodian agricultural produce to Thailand. All the provinces bordering Thailand are affected.

When reached over the phone, Heng Bonhor, the director of the Banteay Meanchey province Department of Agriculture, confirmed the stop of export to Thailand. “Farmers are producing rice and potatoes mainly which, under normal circumstances, they would sell everyday to Thai people. However, the latter are no longer buying them. This leads to financial problems among our farmers because a lot of them resorted to micro-credit (loans) to produce their crop. They can no longer pay back the lending institutions.”

He added also that in his province, 30,000-hectare produce 25 tons of potatoes per hectare per year. All these potatoes were geared for export to Thailand. Regarding rice, 4,000 tons are exported out daily during harvest season. “I informed the ministry of Agriculture about these problems because we cannot solve them at the provincial level. This is not the first time that we have this kind of problem with our Thai neighbors.”

Chhim Vichara, the deputy director of the Battambang province Department of Agriculture, faces the same problem. While he was not able to provide the exact number, he nevertheless underscored that in his province, several producers have exclusive contracts with Thai buyers therefore, establishing statistics is a difficult task. “All Thai buyers have stopped their activities, except those who have contracts with producers. In Battambang, the situation is most likely better than in other provinces, because there are exports to Vietnam.”

According to Heng Bonhor, the stop of the purchases is attributed to the behavior of Thai consumers who, following the declarations issued by their government, purchase Thai products as their priority. “The market for Cambodian agricultural produces is uncertain, each year, there could be problems. One kilo of potato is sold at 100 riels ($0.025) this year, whereas it was 2,000 riels ($0.50) last year. The price of rice drops from 1,000 ($0.25) to 600 riels ($0.15) per kilo this year.” He also indicated that each year, the government invests in rice husk-removal equipment so that rice paddy can be processed locally rather than being sold at low cost to Thailand or Vietnam. “However, we don’t have sufficient financial means to eradicate this issue,” he concluded.

Government should take economic bailout seriously: Sam Rainsy

Sam Rainsy's letter published in The Phnom Penh Post, January 26, 2009

January 26, 2009
Letter to The Phnom Penh Post

Dear Editor,

In the front-page article "SRP calls for govt bailout" in the January 19 edition of The Phnom Penh Post, you wrote « opposition leader Sam Rainsy has called on the government to set aside a US$500 million economic stimulus package to offset the local effects of the world financial slump, claiming "tens of thousands" of Cambodian jobs have been lost to the global crisis ». This article correctly reflects the spirit of my January 16 letter to Prime Minister Hun Sen drawing his attention to Cambodia's vulnerability in the face of the ongoing world financial crisis and to the seriousness of its worsening impact on our economy, the unprecedented fall in agricultural prices literally strangling our farmers, massive job destruction in the hitherto-growing nonagricultural sectors (garment, construction, tourism), and the collapse of the property market.

The suggested US$500 million stimulus package would be the first emergency measure designed to alleviate the fallout from the world crisis and to prevent economic, social and political upheavals with incalculable consequences for Cambodia's stability and long-term development.

However, in the above mentioned article, Information Minister Khieu Kanharith is reported as saying there is no need for such a package because the government has already reserved funds for unforeseen circumstances, as it has been doing every year in the annual state budget. He is quoted as saying: "We have a reserve budget, not only for the global economic crisis but also for other disasters such as floods, and so forth", although he reportedly could not remember the exact amount set aside in 2009.

What the government has actually set aside for the fiscal year 2009 as "unplanned expenditures" -- US$144 million compared with US$132 million for 2008 -- is not adequate to cope with the deteriorating situation. Firstly, in the amount being far too little, and more importantly, in the concept, because the package must be thoroughly planned in order to produce its expected effects. For this purpose, we must forget "floods" and similar contingencies for a while, and concentrate on macroeconomics, fiscal policy, monetary policy, job creation, full-employment equilibrium, aggregate demand, deficit spending, multiplier effect and other elements of Keynesian economic theory.

I would like to respond also to National Assembly Vice President Nguon Nhel who is quoted, in the January 18 edition of Khmer-language newspaper Rasmei Kampuchea, as saying the government does not need to follow my recommendation related to the world economic crisis because it has already taken "measures against inflation". Apparently, Mr Nguon Nhel does not realize that the problem is no longer inflation but deflation and recession.

Sam Rainsy
Member of Parliament

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Click here to read the Rasmei Kampuchea article quoting Nguon Nhel about "measures against inflation".

Click here to read Sam Rainsy's response in Khmer published by the Rasmei Kampuchea newspaper.

Economy Hitting Chicken Farms Hard

By Chun Sakada, VOA Khmer
Phnom Penh
22 January 2009

Chicken farmers in Kandal province have lost hundreds of thousands dollars this year, thanks to the high cost of purchasing and caring for fowl and the recent low cost of selling them.

At least 49 individual chicken farms in Damnak Ampil commune, Ang Snuol district, alone, have closed since October, when prices began to fall in the wake of the global economic crisis, said Noy Sy Nuon, chief of the commune.

Each farm raised between 3,000 to 4,000 chickens, and the cost of raising each, from the purchase of chicks, to food and vaccine, is around $4, he said. But each chicken was now only selling for about $1.50 or $2, he said, leading many of the farms into bankruptcy. For 49 farms, the loss amounted to around $686,000.

All of the farms had been purchased by former rice farmers who sold their land to invest in raising poultry, Noy Sy Nuon said.

“Commune authorities are very concerned about the people living in this commune, after their bankruptcy and the sell-off of their farmland,” he said. “In my commune, there are many more chicken farms than in other areas in the district.”

The heavy impact of the global financial downturn comes amid renewed worry of bird flu in Kandal province, where authorities have culled at least 450 birds.

Mok Vy, 40, a Damnak Ampil farmer, said she had sold farmland for $8,000 and purchased a chicken farm to improve her living conditions.

“But I failed completely and lost all $8,000 from the sale,” she said.

At least 15 chicken farms in her village closed the same way, she said.

Mon Yann, 63, chief of Damnak Ampil village, said he himself had lost $5,000 in a chicken farm. At least 20 other chicken farms in the village had gone bankrupt, he said.

The main reason of the bankruptcy in the chicken farms was the rise in costs of raising the chickens, which exceeded the income, said Saing Soy, 61.

“If we insist on continuing to raise chickens, we will lose our farmland, houses and sometimes loans,” he said.

Var Lay, a 41-year-old farmer, said she had wanted her chicken farm to support her family, to replace rice farming or work outside the village, but she had not been lucky.