Cambodia Needs to Solve Barriers Against Future Growth – Tuesday, 7.4.2009

Posted on 10 April 2009. Filed under: Week 607 |

The Mirror, Vol. 13, No. 607

I am out of hospital care, but still not yet quite OK. Trying to catch up with the delays.

Norbert Klein

“A new report of the World Bank about Cambodia, which was published on Thursday, 5 February 2009, said that while Cambodia is addressing the effects of the current global crisis, the country needs to settle also different factors in the country which might obstruct future economic growth.

“The Country Manager of the World Bank in Cambodia, Mr. Qimiao Fan, said, ‘This report is our last contribution to the discussion about economic growth in Cambodia.’ This report is titled Rapid Economic Growth in a Challenging Atmosphere, which is based on many existing analyzes and studies. This report describes the basic potential of growth, as well as major obstacles, and it raises different policy options to solve the problems faced.

“The economic growth in the past decade in Cambodia was a remarkable achievement in some sectors. Peace and stability allowed the people in general to live normally, and the Royal Government could provide the necessary fundamental services to the people. With access to better health care and clean water, Cambodians live in general longer than before. A growing number of Cambodian children is going to school at present.

“In the past decade, the Cambodian economy grew rapidly. The annual growth of the GDP was 9.8% on average, and reached over 10% continuously duing four years, which came to an end in 2007. This remarkable growth created many job opportunities outside of the agricultural sector, which helped rescuing millions of Cambodians from poverty. Recent data showed that the number of people living under the poverty line dropped to less than 30% in 2007, compared to between 45% and 50% in 1993/1994.

“However, this new report of the World Bank said that the growth is led by four major sectors: garment, tourism, construction, and agriculture. Because it depends on this small number of sectors, and on the flow of direct foreign investment, Cambodia can easily get harmed by the global downturn like its neighboring countries in Southeast Asia. This happens, although Cambodian commercial banks are not directly affected by this financial crisis.

“A senior economist of the World Bank in Phnom Penh, who led the team to organize this report, Mr. Stephane Guimbert, said, ‘Some factors contributing to the previous growth were a only-one-time chance, and it is not expected to come again in a near future.’ The use non sustainable resources threatens to destroy the resources which greatly contributed to the growth. Also, the lack of transparency and accountability in the country will continue blocking operations which is a bad omen for future growth.

“Mr. Guimbert added, ‘The next stage of Cambodia is fairly dark. Achievements in the past decade are very fragile, the basis of Cambodian economic growth seems to be narrow, and past developments result in a situatin that poor Cambodian people have little property. The sectors that had served Cambodia well – global trade and the flow of investments – seem to have lost their energy, at least for a while.’

“According to the report, despite these problems faced, Cambodia has a potential to continue high growth in the future. This country is fairly rich in resources of land and of different other natural resources. Sustainable use and sharing of these resources with equity can provide more opportunities in the future. In the meantime, wages of Cambodia are still low, compared to those of other countries in the region.

“Even though exports focus mainly on a small number of types of products, they offer many opportunities for growth. Better governance is favorable for long term growth, because of better atmosphere for production, which encourages more enterprises and operations that create more jobs for the people.

“This report said that to achieve all the potentials mentioned above, vigorous activities are necessary as follows:

  • A growth strategy with clearer targets and with better coordination among institutions and different relevant actors in the development of Cambodia
  • Harnessing regional integration
  • Managing natural resources in a sustainable way
  • Improving production environment and modernizing industrial policies
  • Better public investment in agriculture, infrastructure, and education.

“This report concludes that successful interventions by the Royal Government will be able to maintain a GDP growth of Cambodia at 6% or 7% per year.

“The report on rapid economic growth had been initiated and led by the Small and Medium Enterprises unit, which is a researching and planning body of the Cambodian government. This report was distributed during the third Cambodian economic forum organized by the Supreme National Economic Council supported by Asian Development Bank, UNDP, and the World Bank. This report is published on the website: Santepheap, Vol.42, #6622, 7.4.2009

Newspapers Appearing on the Newsstand:
Tuesday, 7 April 2009

Cheat Khmer, Vol.1, #54, 7.4.2009

  • Nine Khmer Krom Organizations and Associations Come to Meet the King [at the Royal Palace to send best wishes to him for the Khmer New Year, and to ask for his advise for the Khmer Krom people in Cambodia, and especially also in Vietnam, who are facing restrictions on their freedom]
  • Sand Dredging Continues though It Is Opposed by the Ministry [of Meteorology and Water Resources]

Kampuchea Thmey, Vol.8, #1917, 7.4.2009

  • Negotiations Do Not Go Ahead and the Situation Is Still Tense; [Thai Minister of Foreign Affairs] Kasit Piromya Said If [the ousted Thai prime minister] Thaksin Is in Cambodia, Ties between Both Countries Will Be Affected

Koh Santepheap, Vol.42, #6622, 7.4.2009

  • Cambodia Needs to Solve Barriers against Future Growth
  • Cambodian Official: After Recent Clashes, Border Markers Needs to Be Set Urgently
  • Statistics Show There Were More Than 32,000 Suicides in Japan in 2008 [more than in 2007]

Moneaksekar Khmer, Vol.16, #3731, 7.4.2009

  • Tim Sakhan [who had been defrocked on the accusation of having perpetrated an offense against the Buddhist law, because he is accused to have destroyed the harmony between Vietnam and Cambodia, is living at his relative’s house, followed by the Vietnam authorities]: “I Want to Live in Cambodia, but Not in Vietnam”
  • Hun Sen Said that Economist Intelligence Unit Has Intention to Interrupt the Flow of Investment in Cambodia [by releasing a report recently saying that Cambodia will have political hazards and unrest due to the global economic crisis]

Rasmei Kampuchea, Vol.17, #4865, 7.4.2009

  • A Japanese Man Hit His Eight-Year Old Daughter to Force Her Put Blame on His [Khmer] Wife, but Finally He Was Detained
  • 27 Died in an Earthquake in Italy [later figures stand as high as 250]

Sereypheap Thmey, Vol.16, #1692, 7.4.2009

  • Civil Society [the Cambodian League for the Promotion and Defense of Human Rights – LICADHO and the Open Society Justice Initiative] Ask the United Nations Not to Stop the Khmer Rouge Tribunal Halfway

Have a look at the last editorial – you can access it directly from the main page of the Mirror.

And please recommend us also to your colleagues and friends.

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