Petrol prices squeeze domestic consumers

A woman sells petrol on the roadside in downtown Phnom Penh earlier this year. (Photo by: Wesley Monts)

Wednesday, 03 August 2011
Ty Samphors Vicheka and Sim Virinea
The Phnom Penh Post

Soaring prices for gasoline and goods have hurt some Cambodian consumers, causing what economists have said was a drop in the living standard of the Kingdom’s lower-income population.

“People need to spend more money to make ends meet if prices keep increasing,” said economist Chan Sophal.

The rising costs of gasoline and other goods are weighing on low-income Cambodians, subtracting from their ability to buy the products they need, he said.

Cambodia Struggling to Meet Asean Integration

Foreign ministers and government officials attend the US - Association of Southeast Asian Nations (ASEAN) Regional Forum in Nusa Dua on Indonesia's resort island of Bali, July 23, 2011 (Photo: AP)

Thursday, 28 July 2011
Chun Sakada, VOA Khmer | Phnom Penh

“All kinds of consumer goods are imported. All these things slow down economic growth and the progress of our economy.”

Cambodia’s economy is lagging behind other Asean countries, making it hard to meet the level of other Asean countries, finance officials said Wednesday.

Cambodian and Asean economic officials were meeting in Phnom Penh to push for economic integration for 2015.

Hang Chhuon Narong, secretary of state for the Ministry of Finance, said Cambodia was facing inflation of 6.5 percent, which was curbing economic growth.

Vietnamese hegemony through the economy - Opinion by James Sok

Political Economy of Cambodia in 1960-1990 - by Chitharo Thach

Political Economy of Cambodia in 1960-1990 - by Chitharo Thach
http://www.scribd.com/full/52452629?access_key=key-25vjq94qhi25x1etr25a

Inflation pressures mount

Friday, 28 January 2011
Steve Finch
The Phnom Penh Post

Cambodia's consumer Price Index inflation last year stood at a satisfactory 4 percent, below an economic growth rate of more than 5 percent and well within the bounds of acceptability.

In 2011, however, inflationary pressures will rise leaving the Kingdom in a familiar Catch-22 scenario: Although almost all key indicators including GDP growth and bank lending will likely move in the right direction, in turn this will only fuel inflation.

The Cambodian government has increasingly used fiscal measures such as new taxes and tax enforcement along with a sober budget to help prevent runaway price rises. But with few monetary options at its disposal due to persistently high dollarisation, the state still lacks the most useful tool to control rising prices – interest rates.

Prime Minister says, Cambodia’s GDP growth higher in Y 2010

January 18, 2011
Paul A. Ebeling, Jnr.
www.livetradingnews.com

Cambodian Prime Minister Hun Sen said Tuesday that the country’s GDP growth in Y 2010 is 5.5%, higher than March’s forecast of 5%.

The growth rate is higher than the forecast by the International Monetary Fund, the Asian Development Bank and the World Bank at 4.8%, 5% and 4.9% respectively.

“Y 2010 was a good year for Cambodian economy with a significant growth of approximately 5.5%, attributive to the growth in tourism, agriculture and garment,” the premier said on Tuesday evening during the official opening of the 30th ASEAN Tourism Forum.

Last year, Cambodia achieved tourism growth of 16% with International tourist arrivals of around 2.5 million, he said.

The premier projects that Cambodia’s poverty line will go down to 19.5% by Y 2015 from 30% and 27.4% in Y 2007 and 2009 respectively.—

Cambodian economy grew 5 pct in 2010 - deputy PM

By Prak Chan Thul
Reuters

PHNOM PENH, Dec 28 - Cambodia's economy grew 5 percent this year thanks in large part to a recovery in garment exports, a deputy prime minister said on Tuesday, and an industry official forecast further growth in garment shipments in 2011.

"Our economy grew more than 5 percent in 2010 due to more exports of garments and the increase in tourists, following GDP growth of 0.1 percent in 2009," Deputy Prime Minister Yim Chhay Ly said at a ceremony at the Rural Development Ministry.

The contruction sector was still in the doldrums, however. It contracted 42 percent in 2009 and Yim Chhay Ly said it had still not recovered, citing delays to big projects in the capital, Phnom Penh.

Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia , told Reuters that garment exports had risen about 20 percent this year, helped by the economic recovery in Europe and the United States.

"The outlook for next year, I think, remains positive overall," he said, adding that Cambodia would benefit from the European Union's Everything But Arms initiative, which lets some poor countries ship certain products tariff-free to the EU.

According to data from the GMAC, the country exported garments, textiles and shoes to the value of $2.3 billion in 2009, down from $2.9 billion in 2008. More than half of its exports go to the United States.

Kong Sopheareak, director of statistics at the Tourism Ministry, said 2.5 million tourists visited Cambodia this year, an increase of 16 percent from 2009.

"They have spent about $1.7 billion on food, accommodation, local transport and souvenirs," Kong Sopheareak said.

Yim Chhay Ly said economic growth had helped reduce the poverty rate to 26 percent of the population this year from 27.4 percent in 2009.

China's Large Role in Cambodian Economy Expected to Continue

Ron Corben, VOA
Bangkok 05 October 2010

Cambodia's economy, after contracting in 2009, due to the global slowdown, has revived as a government rescue package, stronger exports and rising tourism arrivals again fuel growth.

Cambodia's economy is expected to expand by close to 5 percent this year, buoyed by the recovery in tourism and garment exports. Last year the economy shrank by more than 1 percent because of the worldwide slowdown.

The rebound in the garment sector has been particularly important. Garment exports account for 70 percent of Cambodia's export income. At the recession's depth about 50 factories closed and over 60,000 - mostly female - workers lost their jobs. Exports fell more than 20 percent in value.

Sharp turnaround

Asian Development Bank country representative Peter Brimble says the turnaround has been sharp this year.

"Garment exports to the states appear to have increased by more than 10 percent in value terms," said Brimble who calls the outlook positive. "Tourism has gone up by similar numbers - at least in terms of arrivals - a bit less in terms of spending but still a significant recovery. From a purely macroeconomic perspective, the economy looks to be returning to a growth trend [of] five, six, seven percent, and this is even in light of continuing sluggishness in Western economies and Europe and in the states. Possibly Cambodia came out relatively well given everything."

Laurent Notin, a director of Indochina Research in Phnom Penh, says the mood in the business community has improved, although the property sector remains in the doldrums because of credit shortages.

"People are more confident. Business is more confident than last year," said Notin. "Everybody is far happier than last year, except maybe if you're working in real estate sector in which nothing is happening."

Boosting investment

The government wants to boost foreign investment by improving infrastructure, expanding energy production, and upgrading the agriculture, tourism, manufacturing and mining sectors.

The recession hit foreign investment hard, and in 2009, it fell by nearly half, to $5.86 billion.

China remains the biggest source of foreign investment by far. Chinese funds have gone into hydropower projects, river port facilities, irrigation systems, and transmission lines. Other major foreign investment sources include South Korea, Hong Kong, Taiwan, Malaysia and Singapore.

The Cambodian government says it is open to even more investment from China, which officials say will help Cambodia develop its economy.

In February this year Cambodian Prime Minister Hun Sen announced plans to invest $310 million to improve irrigation systems. China is lending $240 million for the project.

Douglas Clayton, managing partner for venture capital firm Leopard Group, says most people welcome Chinese investment, especially in infrastructure and in ensuring employment.

"We're seeing Chinese investment in large infrastructure projects like hydropower dams," noted Clayton. "And generally anything that brings cheaper power is pretty much welcomed to most people."

Transparency concerns

But China's growing investment raises some concerns. Hang Chayya, director for the Khmer Institute for Democracy, says rights groups' worry about the lack of transparency in loans and financial deals.

"It's a huge concern for us because the Chinese tend to have this principle, there's no strings attached where other investments they tend to be multinational, or World Bank, or some other development agency. So there's no proper checks and balances in terms of how they conduct and manage these projects," explained Chayya.

Chayya says a lack of transparency may lead to allegations of corruption.

There also are concerns that China may influence Cambodian decisions in other areas. A year ago, China and Cambodia signed deals worth over $1.2 billion, but only after Phnom Penh expelled 20 Chinese Uighurs who had fled China claiming persecution.

The expulsion came despite pleas by the United States, United Nations and human rights groups.

The ADB's Brimble says for Cambodia, China will remain an important source of development assistance.

"Obviously Cambodians have had a long-time relationship with the Chinese government and the Chinese government is becoming more active in becoming a donor country," added Brimble.

Business analysts say despite the recovery, Cambodia confronts the challenge of alleviating poverty and ensuring sustained growth. It also must adapt to a rapidly changing regional economy and the growing economic reach of China.

More Long-Term Thinking These Days: Economist

Sok Khemara, VOA Khmer
Washington, D.C Friday, 24 September 2010

“In the year 2010, there is a great impression that long-term investment is the most important need for the economy, as well as local people.”

Cambodia may still be facing some challenges from the global financial crisis, but it has recently shown some good trends, especially in long-term investment, a leading economist said Thursday.

“In the year 2010, there is a great impression that long-term investment is the most important need for the economy, as well as local people,” said Kang Chandararoth, president of the Cambodia Institute for Development Study, as a guest on “Hello VOA.”

That would include investment in mining, power and infrastructure, he said.

Thinking has shifted away from a recent attitude of short-term investment and quick money, he said.

Cambodia’s main earners continue to be tourism, construction, agriculture and manufacturing. Earlier this year, the IMF predicted a 5 percent economic growth rate for 2010.

Kang Chandararoth advised farmers to not only cultivate for subsistence, but to consider the needs of the marketplace.

Foreign auditors not allowed to sign financial statements from 2014 in Cambodia

September 20, 2010
Xinhua

Foreign accountants and auditors will be no longer allowed to certify financial statements from 2014, said a senior finance official on Monday.

"Even if the mutual agreement between Cambodia and other countries has not been implemented, the foreign professional accountants and auditors are welcomed and allowed to freely practicing their profession in Cambodia," Ngy Tayi, Secretary of State for the Ministry of Economy and Finance and Chairman of the National Accounting Council, said on Monday at the National Conference on Accounting "Accountants for Business: Changing Roles for Accountants" in Phnom Penh.

Today, there are 31 accounting and auditing firms operating and practicing their service in Cambodia, however, "from 2014, only Cambodian accountants and auditors will be allowed to certify on company's financial statements", he said.

"This is our challenges, especially, when securities and exchange markets are placed into operations in mid 2011," he said.

He said that accountant is an important element of economic activities for both companies and regulators, however, Cambodia is far short of these human resources.

"Until today, we have about 46 Association of Chartered Certified Accountants (ACCA) students and 76 Certified Accountants Technician (CAT) students graduated," he said. "We expect that another about 100 candidates will be graduated by the end of this year."

He said that Cambodia also has huge university graduates but their quality is limited.

Bad news beats no news

Monday, 06 September 2010
Steve Finch
The Phnom Penh Post

CAMBODIA recorded mixed results recently in terms of improving the quality and quantity of economic information available to investors.

Prime Minister Hun Sen’s endorsement on Friday of a sub-decree that would lead to the pooling of information on the labour market represented a significant move to help investors learn more about the country’s employment situation.

But earlier in the week a business delegation complained the government had not done enough to promote the Kingdom’s largest export industry, garments.

The head of the delegation, Korea Federation of Textile Industries team manager Gue-bae Yeoum, noted that South Korean companies “are too scared to invest here” due to a lack of information.

But although South Korean companies have recently complained, recent examples show the Kingdom has made progress in supplying the private sector with reliable economic information.

Cambodia saw garment exports to other relatively small markets expand last year, suggesting promotion was effective. In the first half of last year, when the garment downturn was at its worst, the Kingdom saw clothing exports to Japan nearly double year on year to US$9.6 million on the back of a major industry effort to link up with new markets to compensate for losses in countries such as the United States. Clearly Japanese firms have gained confidence in terms of doing business with Cambodia’s garment sector.

Still, the Kingdom has a long way to go in terms of keeping the business community fully informed. On Saturday, the prime minister again insisted that Cambodia had achieved GDP growth last year during a speech at the Asialink Conversations in Phnom Penh. It’s a line that correlates with the official government position that the economy grew 0.1 percent, but contradicts the International Monetary Fund and Economist Intelligence Unit, among others, which say the country went into recession last year, contracting between 1.5 percent and 2.5 percent.

Anecdotal and statistical evidence suggests that all major industries in the economy – garments, tourism and property – went into decline in 2009, with agriculture the only significant exception.

It therefore remains largely unclear whether the country experienced macroeconomic growth last year or not, let alone to what degree.
In regards to GDP statistics, the likes of Singapore and

China release data quickly on a quarterly basis. This allows firms to make decisions on whether to invest, when to do so, and perhaps even how much based on projections of general economic activity. Similarly, existing investors get a rapid snapshot of where the economy stands and where it is heading.

Ultimately, when it comes to business information, even bad news is better than no news. With up-to-date, reliable and regular economic data available, Cambodia would become less of a risky frontier market. The country could become an investment destination offering stable, predictable growth, which would allow companies to react quickly to market conditions.

Of course, collecting and publishing timely and comprehensive economic data takes time and financial resources. It also requires a certain degree of political will, especially when the news is not good.

For a government that has overseen something of an economic miracle over the past decade, fuller disclosure should therefore provoke few fears.

Cambodia: Asia’s mini-tiger

August 25, 2010
By Tim Johnston
Financial Times

Could frontier market Cambodia become a serious contender for Asian tiger status? The country certainly has a buzz about it: flights into the capital are filled with businessmen, the once rural outskirts of Phnom Penh are fast turning into one big construction site, and the roads of the city centre are gridlocked with Lexus four-wheel drives.

According to a UBS note to its clients today, the country is starting to make a roar, albeit small. And when it comes to manufacturing, Cambodia is fast becoming a ‘mini tiger’.
According to Jonathan Anderson at UBS in Hong Kong, Cambodia’s manufacturing base has significantly benefitted from the globalisation boom of the past decade.

The country has quietly established itself as a “mini-tiger” in textile processing and assembly, a fact generally overlooked by most investors including ourselves.

So is Cambodia poised to take on official emerging market status? Not yet.

Cambodia’s manufacturing sector is growing at an astonishing rate - in real terms (the Cambodian currency) it has more than quadrupled in the last decade, but as a manufacturing economy it still has some way to go: manufacturing still represents less than 15 per cent of GDP according to the latest figures from the ADB.

But Cambodia is quietly attracting more and more attention. In 2008, Leopard Capital launched the country’s first dedicated fund, and although the $34m raised was a long way short of the $100m it was aiming for (it was after all the middle of the global crisis), it plans to launch another $50m fund later this year to be split between Cambodia and Laos.

In today’s UBS note, Anderson has taken a look at the extent to which developing economies dependent on manufacturing have expanded their manufacturing exports relative to GDP over the last decade. The standouts were Cambodia, Czech Republic, Hungary, Slovak Republic, Thailand and Vietnam, all of which increased their exports by more than 25 percentage points.

While Cambodia becoming a tiger overnight may be premature, the note certainly offers some food for thought.

Cambodia Behind Region in Investment

Cambodians cross the Tonle Sap river by ferry along a Chinese-funded bridge under construction at Prek Kdam village. (Photo: AP)

Kong Sothanarith, VOA Khmer
Phnom Penh Thursday, 08 July 2010

Cambodia has improved its investment environment, “but we have to fix other problems.”

While Cambodia has adopted a competitive investment strategy, it lags behind Asia-Pacific countries in terms of investment facilities and other factors, the World Bank reported Wednesday.

Cambodia is one of the more open countries to foreign investment, but its roads, ports and other infrastructure are not developed, according to the “Investing Across Borders” annual report.

“It’s a showcase to attract more foreign direct investment,” said Ngoun Meng Tech, secretary general of Chamber of Commerce of Cambodia.

Cambodia’s economy has struggled since the 2009 recession, and foreign investment has fallen from $1.2 billion in the first six months of 2009 to $1.1 billion for the same period this year. Experts say the country must now find ways to compete in a different global economy.

In Cambodia, it takes 86 days and 10 procedures to open a business, compared to other East Asia-Pacific countries, where the average is 68 days and 11 procedures, the World Bank reported.

Cambodia has improved its investment environment, “but we have to fix other problems,” said Ros Khemara, a member of the Cambodian Economic Association.

The World Bank also noted that Cambodia does well in the time it takes to lease land, but lags behind the region in the availability of land information.

Farmers Needs to Watch Market: Economist

Cambodian farmers prepare seedlings for their rice plantation at the paddy rice farm in Kandol village, Kampong Cham province. (Photo: AP)

Kong Sothanarith, VOA Khmer
Phnom Penh Friday, 07 May 2010

“Some companies will lose in a price war, and they will quit. The companies that are sill in operation will raise their prices. This is like a monopoly, and it can be catastrophic for the economy.”

Cambodian farmers need to learn to focus on the requirements of the market if they are to benefit in agriculture, a leading economist said Monday.

Farmers are used to planting crops for each other, then selling the surplus, but that culture must change, Din Virak, an economist and lecturer at several Phnom Penh universities, told “Hello VOA.”

Farmers are selling their produce at prices cheaper than market prices, he said.

Cambodia’s economy was hit hard by the economic downturn in 2008 and 2009, but the government and other international agencies are predicting a rebound in 2010, with an estimated growth of 5 percent.

Much of that will come from garments and tourism, the country’s main earners, but Cambodian officials have said they want agriculture to play a larger role in the economy.

Cambodia is working to sell its good on international markets and within Asean, and there are plans to redistribute some wealth through irrigation projects and other boosts to agriculture, Din Virak said.

Cambodia is mainly a free market, with little government interference in pricing, he said, except for a recent edict by government ministries to set a price floor on mobile phone rates, after a price war threatened to reduce prices too low.

“In principle, the government can only fix maximum and minimum prices in necessary cases,” he said.

“Some companies will lose in a price war, and they will quit,” he said. “The companies that are sill in operation will raise their prices. This is like a monopoly, and it can be catastrophic for the economy.”

Cambodia's Business Registration Surges in Early 2010

2010-03-05
Xinhua

New businesses registered with the Cambodian Ministry of Commerce increased by 18 percent in the first two months of 2010 compared to the same period of last year, local media reported on Friday, citing the statistics released from the ministry.

Official data, released by the ministry's Business Registration Department, stated that 338 enterprises and companies were granted licences in January and February this year.

This compares to 286 firms registered during the same two months of last year, and represents a tax revenue increase of 5, 200 U.S. dollars for the government given that registration rates have remained unchanged.

During the same time period, six companies were dissolved this year, compared to a total of nine in 2009, a year largely considered the worst on record for the Cambodian economy as international agencies including the International Monetary Fund and World Bank predicted a small contraction in gross domestic product.

An official at the department, who asked to remain anonymous, was quoted by the Phnom Penh Post as saying that registrations started increasing at the back end of 2009 and consisted of numerous South Korean and Vietnamese enterprises.

Many of the South Korean businesses, she said, have registered in preparation for the May launch of Cambodia's stock exchange, while the Vietnamese registrations were concentrated in the agricultural sector.

The official added that the procedures and laws had been improved to ease the granting of licences to traders and investors.

Nguon Meng Tech, director general of Cambodia's Chamber of Commerce, was quoted as saying on Thursday that the business climate in the country had improved so far this year.

In 2009, the total number of new companies registered declined sharply by an annualized 27 percent to 2,011 companies from 2,755 in 2008, the ministry figures showed.

Catching Cambodia on the cusp of development

February 14 2010
By Elaine Moore
Financial Times (UK)

Douglas Clayton, founder of frontier market fund manager Leopard Capital, has a habit of relocating to the country he believes is on the cusp of development. Right now, his home is Cambodia.

“It’s fun to be in countries that are changing rapidly,” he says. “Cambodia is where Thailand was 30 years ago, and where Vietnam was 15 years ago. There is a lot going on.”

Leopard Capital manages funds in what it calls “overlooked, transitional economies”. It boasts contrarian investor Marc Faber, author of the Gloom, Boom and Doom newsletter, as a non-executive director and seeks to invest in start-ups as well as existing businesses in South East Asia.

In April 2008 it launched the Leopard Cambodia Fund, which closed in January 2010 with more than £34m (€39m $53m) to invest in a variety of multi-sector Cambodia projects. Mr Clayton says a second Cambodian fund is planned for later in 2010.

Investors tend to have some knowledge of Asian developing economies and tolerance for the idiosyncrasies that investment in these countries involves.

Cambodia’s economy is, at around $8bn (£5bn, €6bn), smaller than some multi-national companies, and with per capita gross domestic product of less than $800, it is still one of the poorest countries in the world.

Another obstacle to investment is the lack of transparency and endemic corruption in the country. The 2008 Transparency International survey ranked Cambodia 166 out of 180 countries.

“The legal system in Cambodia is a work in progress but it gets better every year,” says Mr Clayton. “Cambodia is no worse that any other south-east Asian developing country and most importantly, the government wants to attract foreign investment.”

In fact, Mr Clayton rates Cambodia alongside Hong Kong and Singapore as one of the most open countries to do business in. Corporate income tax is 9 per cent and there are no laws against 100 per cent foreign ownership of companies, although land can only be fully owned by Cambodians.

After it was ravaged by the Khmer Rouge in the 1970s Cambodia has experienced 30 years of remarkable growth and has attracted a steady stream of investors lured by the country’s political stability under long-serving Prime Minister Hun Sen, and the potential for its undeveloped natural resources.

The capital city may still lack a coherent public transportation system or large shopping centre, but its transformation from ghost town to thriving city is used to illustrate Cambodia as a post-war success story.

Between 2000 and 2007 the country’s economy grew by 9.5 per cent a year, second only to China.

When the Cambodia fund was launched by Leopard Asia in April 2008, the founders planned to raise $100m, with a projected investment return of 30 per cent.

But as the global recession took hold across Asia, interest in frontier funds such as the Leopard Cambodia Fund, which require investors to tie in their money for relatively long periods of time, dwindled, and the group decided to close the first fund and invest the money.

So far the largest investment made has been $5m to CamGSM, which operates Cambodia’s largest mobile phone network. As with many developing countries, landline coverage in Cambodia is fairly sparse, but mobile phones are widely owned.

The fund has also invested $2m into Kingdom Breweries, a Cambodian beer brewery, which aims to produce high quality beer in a microbrewery in Phnom Penh; over $1m in Greenside Holdings to construct a rural power distribution system; and $1.5m for 24 per cent of a property project in downtown Siem Reap, near the tourist attraction of Angkor Wat.

The fund will also invest up to $4m into Cambodia Plantations to lease approximately 3,000 hectares of land to grow rice. The first harvest is expected in 2011.

Agriculture remains one of the dominant industries in Cambodia and a number of countries such as Malaysia and Korea have taken advantage of the cheap price of land to lease thousands of hectares to grow rice.

The second Cambodian fund is expected to continue investment in agriculture, as well as potentially including investment in Laos.

Before this is launched the group will focus on two new Sri Lanka funds. The private equity Leopard Sri Lanka fund aims to raise $100m, while the Leopard Sri Lanka Value fund will seek to raise $30m to invest in listed equity. Although Sri Lanka is a more sophisticated and larger economy than Cambodia, it has lacked investors while in the grip of a brutal civil war. Leopard Capital plans to invest in industries that were already well developed but came to a halt during the war, such as tourism, retail and agriculture.

“We are the first wave of money coming into the economy,” says Mr Clayton. “Once the world realises that this country is safe again this economy is going to take off.”

Hun Sen Says Tourism to Lead Economic Growth in Cambodia

2010-01-26
Xinhua

Cambodia's Prime Minister Hun Sen said Tuesday that tourism is a locomotive for economic growth in his country and vowed to accelerate it as one of the world's most wanted tourism sites.

Giving his speech at the inauguration of Cambodia-South Korea Center for Culture, Tourism and Trading in Phnom Penh, Hun Sen said the tourism has become a priority sector for economic policy and is a locomotive for sustainable socio-economic development of Cambodia.

"Cambodia is in a process to develop itself into a cultural, social and natural tourism center in Southeast Asia where is considered the most developed tourism in the world today," he said.

He added that the political and social stability and peace being enjoyed by Cambodia people and the country are one of the factors that attract more tourists to this country.

He said in 2008, there were 2.1 million foreign tourists visited Cambodia, an increase of 5.5 percent compared to a year earlier, and within 11 months in 2009, there were 1.9 million, an increase of 1.6 percent if compared to that in 2008.

While the number of foreign tourists visiting Cambodia on gradually increased on yearly basis, Hun Sen was also satisfied with the figure that showed 6.7 million local tourists traveled around the country in 2008.

Hun Sen noted that in 2004, Cambodia earned only 578 million U. S. dollars, but it earned as much as 1.5 billion U.S. dollars in 2008, and employed more than 30,000 Cambodians.

Cambodia's Angkor Wat Temple, built between 9th to 12th century- - is one of the world's famous tourist sites. Angkor Wat Temple was registered as the world heritage site.

Finance minister rejects ADB's growth forecast

Finance Minister Keat Chhon rejected independent growth projections for 2009, saying that the government’s policies can lead to a better economic performance. (Photo by: TRACEY SHELTON)

Thursday, 02 April 2009
Written by Chun Sophal
The Phnom Penh Post

GDP GROWTH 2009

• Government: 6.5 percent
• ADB: 2.5 percent
• World Bank: -0.5 percent
• IMF: -0.5 percent
• EIU: -3 p

• 2008: 6.5 percent

Cambodian government dismisses Asian Development Bank’s latest GDP growth prediction of 2.5 percent for this year as too pessimistic

THE Cambodian government has rejected the Asian Development Bank's latest economic forecast of 2.5 percent GDP growth this year, saying that a strong agricultural and informal sector will lead to growth of more than 6 percent.

"I think it is hard for [the ADB] to be fortune tellers, and we hope that Cambodia will see higher economic growth because the government is walking on the right path to develop the country," Finance Minister Keat Chhon said Wednesday.

The government has rejected major independent forecasts on 2009 growth, including those of the International Monetary Fund (IMF), the World Bank, the ADB and the Economic Intelligence Unit (EIU).

The EIU forecast a 3 percent contraction, the IMF and World bank separately predicted a 0.5 percent contraction, and the ADB projects 2.5 percent growth. Analysts from all four organisations agree that a slowdown in garment sales, construction and tourism will drag down 2009 growth.

Keat Chhon told reporters outside the National Assembly on Wednesday that ADB and IMF reports were unacceptable and that their estimates failed to account for agricultural growth and the country's informal "non-system" economy.

"I am determined to make cambodia’s … growth higher than the forecasts."

"We have big potential for our non-system economy, and we believe that it can help Cambodia see higher growth than the ADB and the IMF forecast," Keat Chhon added.

Agriculture to stay strong

Agriculture is expected to be the one bright spot for the year, and the ADB explained that its more optimistic forecast for productivity growth is because its analysis puts a greater emphasis on the sector.

Agricultural yields are expected to increase in 2009 as irrigation and infrastructure projects are completed. The government and agriculture organisations have also made headway establishing new markets for Cambodian agricultural products and attracting new foreign investment to the sector.

Government forecasts

The Cambodian government's latest prediction was that growth would hit 6.5 percent in 2009, but the finance minister said that figure is under review pending first-quarter results for the country.

"I am determined to make Cambodia's economic growth higher than the forecasts, and I won't let the country decline into chaos because the government has tools ready to move forward," Keat Chhon added.

Eric Sidgwick, the ADB's senior country economist for Cambodia, had no response to the government's latest statement, but said that the ADB and the government had "very good relations".

ADB country director Arjun Goswami said Tuesday that the Cambodian government is coping well with the crisis.

"There is an understanding of the crisis and what needs to be done.... This is a very difficult time for all organisations, including the Cambodian government," Goswami said.

The ADB also predicted that regional growth would slow to 3.4 percent in 2009 on lower exports.

ADDITIONAL REPORTING BY GEORGE MCLEOD

Today the sex trade in Cambodia is one of the largest money making businesses in the nation ... bigger than drug trafficking

Child sex trade: The sad truth

3/16/08
Opinion by Gino Troiani
The Beacon (Wilkes University, Wilkes-Barre, Pennsylvania, USA)

The nation of Cambodia is located in Southeast Asia, just west of Vietnam. It is largely underdeveloped, poverty stricken, and lacks a strong central government.

To support themeselves, many Cambodians live and work on farms, or in factories. In a nation where the average annual salary is around $350 a year, some citizens turn to illegal activities such as narcotics or the sex trade to make money.

Brothels have been an easy way to generate revenue for Cambodian pimps since the early 1900's [KI-Media: 1990s?]. When the United Nations (UN) entered Cambodia, sending troops to supervise the country's transition to the current democratic government, there was a large demand for prostitutes. Not long after the UN left, brothel owners discovered that they could market young girls to huge numbers of foreign clientele.

Today the sex trade in Cambodia is one of the largest money making businesses in the nation.

Out of an estimated 20,000 sex workers in Phnom Penh, Cambodia's capital, the average age is around 15.

According to the U.S. State Department, sex trafficking is becoming a bigger business worldwide than drug trafficking. This means that every day thousands of young girls and boys are bought and sold into slavery.

The big question is, how do these young people find themselves as sex slaves?

According to a recent MSNBC article, one of the most popular ways of recruiting is by promising young girls steady work and shelter, an appealing prospect for girls who hope to help their families with much needed income. When they agree, they are brought to the brothel and sold for money. Because many young women in Cambodia are homeless and uneducated, one can imagine how easy this type of recruiting is. It is also not uncommon for a struggling family to sell one of their own children into the sex trade. The article reported that one woman recalls being tricked and sold to a brothel by her newly wed husband for $200.

The majority of brothels are usually filthy, run down shacks, that offer subhuman living conditions. Upon arrival, the young women are usually beaten, cadged and drugged.

Dateline also reported that, it is also common for the pimps to show pornography to the youngest women, as "educational" background so they know how to service a paying customer. Because Cambodia is ravaged with HIV, AIDS, and numerous sexually transmitted diseases, it is considered good luck for a Cambodian man to have sex with a virgin. Because of this, it is not uncommon for the young girls to have their hymen re-stitched so that they can be sold as virgins more than once for a larger sum. Their ages range from 4 and up.

CNN recently reported that, a young girl only fifteen who was recently rescued from a brothel testified that she had been "locked in a cage," and forced to service at least fifteen customers a day. If she objected she was starved, and shocked with electric rods. She was also given a methamphetamine tablet several times a day to cloud her memory and keep her in an altered state.

What is being done?

There have been numerous efforts by both internal and external organizations to break up the sex trade in Cambodia, but the struggle is far from over. The Cambodian government has set up an anti-trafficking department, but it is poorly funded, and many of the enforcement officers partake in the illegal activity themselves, such as taking handouts and tipping off the brothel owners.

For the girls who do find a way out of the sex trade, many of them turn to specialized shelters, which are dedicated to the rehabilitation of the young women. Here they receive both medical and psychological attention. The sad truth is that most of these girls die at a young age because of AIDS or other physical problems. Also a large number of the girls end up leaving and returning to a life of prostitution because it is the only thing they know.

Most of these young women have been exploited and abused on a daily basis for the majority of their lives. They have been stripped of their basic human rights, and demoralized to the point where there is nothing left but an empty shell. The United States and other developed countries have a moral obligation to educate and hold Cambodia to ensuring basic human rights for all.