Economic crisis in Cambodia, from the World Bank's point of view: with bad luck comes some good?
Takeo (Cambodia) 03/09/2008 Rice export may be the only growing sector of the economy. Daily labourers harvesting the first of two yearly crops of a landowner. They are paid the grass that is left after the rice has been threshed. They use it to feed their cows. (Photo: John Vink / Magnum)
11-12-2008
By Stéphanie Gée
Ka-set in English
Click here to read the article in French
Click here to read the article in Khmer
East Asia will not be spared the impacts of the global economic storm which started in the developed countries and has been severely raging throughout the world since September 15th, the World Bank (WB) warned in its latest report, released on Wednesday December 10th. However, according to projections made by Jim Adams, vice-president of the World Bank, the region of East Asia and Pacific, pulled by China's line of dynamism and better-prepared to face the crisis than it was in 1997 when it was hit by the financial slump, will contribute about a third of the total global growth in 2008. But what about the small Kingdom of Cambodia, who stood out over the past ten years with important growth records - GDP growth averaged 11.1% between 2004 and 2007 - achieved thanks to open policies? The WB forecast a GDP of 6.7% for 2008 for the country, but the product should plummet down to 4.9% for 2009.
Hard times for the four key drivers of Cambodia's growth
“The unfavourable external environment will now lead to less demand for Cambodian exports, fewer tourists, and less foreign investment”, Stéphane Guimbert, a senior economist for the Cambodian branch of the World Bank, explained. “Inflows of foreign direct investment are projected to slow from a record high of 10% of GDP in 2007 to 5.2% in 2009, as foreign investors become more cautious about investing in developing countries, in a context of unstable economic situation.
So, the four key drivers of Cambodia's economic growth will suffer severe blows: first of all, the sector of agriculture: it offers substantial opportunities for Cambodia, a rice exporter, but the scope for a robust supply response remains uncertain given the recent decline in prices and limited investment in the sector. Then, the garment industry, hit by the slowdown in the United States, its main export market, weakened by competitiveness issues due to high inflation and an increase in workers' wages, and affected by the lifting in 2009 of safeguards measures by the United States and the European Union on China, a major competitor in garment exports. Thirdly, the sector of construction is slowing down too, due to the consequences of the crisis on Korea who had until now been acting as a locomotive for the Cambodian construction sector. Finally, tourism has been directly affected by weaker global economy on the one hand and the border disputes with Thailand on the other hand. The WB reported that a slowdown in tourist arrivals was noticeable in the first six months of 2008.
The World Bank's recommendations
As some do not hesitate to say that this economic depression may well be the worst in the world since the 1930s, one may wonder what a small country like Cambodia could do to respond to the crisis with its own resources. Vikram Nehru, the World Bank’s Chief Economist for East Asia and the Pacific, admitted frankly, from Tokyo, that “Cambodia was unlucky to [have been] caught in the crisis at this particular time”.
Stéphane Guimbert, for his part, put forward four key policies which could help lessen the impact of the shock wave on Cambodia. To start with, he advocated the strong supervision of the banking sector to avoid financial risks. “The financial sector is still very young in Cambodia. If there is a problem, the situation could get worse very quickly!” he warned, adding that the government was on the right track in this field. He also suggested the establishment of fiscal stimulus meant to support growth without jeopardizing macroeconomic stability.
Another key policy, he added, would be to offer trade and investment facilitation to mitigate the adverse effect of the external environment. And finally, the economist advised that social safety nets should be prepared to help the most vulnerable cope with the slowdown in growth
Keeping the garment sector in good health
In such a context, Cambodia seems bound to lose its market shares in the United States since demand will clearly be reduced. The Kingdom will then be forced to seek new markets, Vikram Nehru advised.
Cambodia must boost its competitiveness - “it must be one of the country's priorities”, Stéphane Guimbert insisted – by facilitating trade, offering fiscal stimulus and dealing with labour-related conflicts. The World Bank economist reminded that the country suffered from its dollarised economy since the American dollar has been appreciating against other currencies circulating in the region due to the inflation this year.
With bad luck comes ... some good?
The World bank economists yet want to believe that there may be a few advantages to take from the current situation of crisis, at least in the medium term. In the case of Cambodia, the sector of agriculture, which is still far from being exploited in the best way, could be boosted more, with a view to support economic growth. “Although the price of rice has gone down after a peak in May-June, it is still higher than it was before. This allows farmers to invest more in their land and buy pumps for irrigation or more seeds and fertiliser to increase their crop yields and make more profit...”, Stéphane Guimbert suggested.
Then, before the crisis actually vanishes and investors, currently sitting on their liquidities, come back to speculate, the latter will keep thinking twice before committing to any project, worried about the financial risks they would potentially take. To Stéphane Guimbert, it is time for Cambodia to do everything in its power to reduce these risks by improving the climate for investment. Moreover, Cambodia, according to the economist, must dare implementing “slightly more ambitious” expenditure policies, particularly when it comes to infrastructure projects and social protection nets, which will have a beneficial effect on potential growth in the medium term. The Cambodian government seems to be taking this track, judging by the 2009 budget, widely increased (US$1.8 billion) and adopted on Tuesday December 9th by the National Assembly.
The measures already taken by the government
In order to slow down inflation and lessen financial sector risks, the Central Bank tightened its monetary policy, as pointed out in the World Bank report. With further details, the WB described that the Central Bank doubled reserve requirements in July 2008, introduced a ceiling on loans to the real estate sector, tripled capital requirements in September 2008 and introduced restrictions on cash withdrawals from the Central Bank in October 2008.
The government continues to advance structural reforms, although with some slowdown at the time of the elections. Progress has also been made in upgrading the legal framework for investment, notably with the enactment of the Law on Secured Transactions, which makes it possible for a business to use its moveable and intangible assets as security for a loan. The World Bank pointed out that this had allowed Cambodia to skip 15 places in the 2009 “Doing Business” Report.
Last but not least, the World Bank assessment quoted another important reform recently enacted, namely the introduction in May 2008 of ASYCUDA, or Automated System for Customs Data, at the Port of Sihanoukville.
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Faction war hinders plan for new govt
Puea Pandin holds out on Democrats’ alliance
MANOP THIP-OSOD
PRADIT RUANGDIT
A faction of the Puea Pandin party is hampering the Democrat party’s coalition-building efforts by fighting for cabinet seats and refusing to commit to the alliance, sources say.
Democrat leader Abhisit Vejjajiva, secretary-general Suthep Thaugsuban and other key party figures yesterday sought to resolve the problem by visiting Puea Pandin leader Pracha Promnok at his home on Vibhavadi-Rangsit road with a bouquet of red roses.
They were joined at the one-hour talks by key Puea Pandin members Phinij Jarusombat, Preecha Laohapongchana, Mun Patanotai, Pichet Tancharoen and Nimuktar Waba, as well as list-MP M.R. Kittiwatana Chaiyant.
On Saturday and again on Tuesday, members of the Chart Thai Pattana, Ruam Jai Thai Chart Pattana and the dissolved Machimathipataya and Puea Pandin parties, and a faction controlled by Newin Chidchob declared their intention to join the Democrats.
However, Puea Pandin was represented by deputy leader Ranongrak Suwanchawee. Pol Gen Pracha did not take part.
Chart Thai Pattana was set up to replace the dissolved Chart Thai party.
Pol Gen Pracha yesterday sidestepped questions about whether his party would support the coalition-building efforts of the Democrats, or its rival Puea Thai, which is also trying to stitch together a new government.
He said the former coalition parties had yet to consult each other.
He denied Puea Pandin remained undecided because he was demanding cabinet seats.
Sources in the proposed new coalition said Puea Pandin had actually decided to back the Democrats but publicly remained uncommitted because key figures in the party were still fighting for cabinet portfolios.
The factions belonging to Mr Phinij, Mr Preecha and Suvit Khunkitti had approached the Democrat secretary-general for cabinet seats, the sources said.
In the meantime, the factions led by Pol Gen Pracha and Mr Mun were bargaining for portfolios through former foreign minister Surakiart Sathirathai, they added.
‘‘The whole Puea Pandin party backs the Democrat party’s attempt to form a government and supports Mr Abhisit as prime minister. But we don’t want Mr Phinij’s group to have sole authority in allocating [cabinet] positions,’’ another source in Puea Pandin said.
‘‘We will take the issue to the party’s executive board so a majority can make a decision instead of leaving it with Mr Phinij’s group alone. This is all about games within the party,’’ the source said.
hinder – to stop someone or something from making progess or developing; to hamper
alliance – a coalition; an arrangement to work together
cabinet – the group of government ministers who make and approve government policy
key – most important
dissolved – officially ended as a group
intention – a plan in your mind to do something
replace – to put a new person or thing in the place of someone or something แทนที่
sidestep – to avoid something difficult or unpleasant
stitch together – to put together, especially with some difficulty
consult – to ask for information or advice from someone
source – a person who gives information
back – to support
uncommitted – not willing or ready to support an idea, group or person
sole authority – the only one with the power to do something
allocate – to official give something to someone
issue – a subject that people discuss or argue about
majority – more than 50 percent of a group
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Fresh violence in Athens, man hurt
Listeng Here
At least 70 people have been injured since Saturday when the rioting broke out within hours of the killing of 15-year-old Alexandros Grigoropoulos. Hundreds of stores have been damaged or destroyed.
Prime Minister Costas Karamanlis has ignored opposition calls for early elections and promised shopkeepers affected by riots generous compensation, including 10,000 (464,300 baht) handouts to cover short-term needs.
Although no major protests were planned yesterday, tension persisted in Athens and the northern city of Thessaloniki, students occupying their high schools and university faculties. They planned a demonstration in Athens today.
Authorities have renewed appeals for calm, with influential church leaders joining in attempts to ease tension.
While being generally tolerant of occasional outbreaks of violence during frequent demonstrations, Greeks have been shocked by the ferocity displayed by teenager rioters and the extent of the destruction.
‘‘Is this our youth?’’ exclaimed an elderly woman as she picked her way past the rubble of a burned out shop near the Athens Polytechnic, where some of the most severe rioting took place. ‘‘Who needs youth like this? Why don’t they go and burn the prime minister’s house? What fault was it of these people [who lost their store]?’’
Two separate opinion polls published on Wednesday, before the aid package was announced, showed 68% of Greeks disapproved of the government’s handling of the crisis, and gave a nearly 5 percentage-point lead to the opposition Socialists.
The exact circumstances of the death are disputed.
Two police officers charged in the shooting said they had come under attack by rock-throwing youths, and that one of the officers fired warning shots. Witnesses who have spoken to the media disputed that account.
A prosecutor ordered the two officers remanded in custody late on Wednesday, pending trial. No date has been set.
hurl – to throw something with a lot of force
pelt – to throw objects with force at someone or something
sporadic – not regular or frequent
scores – a large number of people or things (one score is 20)
ignore – to not consider something, or to not let it influence you
generous – more than is usual or expected
compensation – money that someone receives because something bad has happened to them
handout – an amount of money or goods given to people who need them
tension – the feeling caused by a lack of trust between people, groups, or countries who do not agree about something and may attack each other
persist – to continue to exist
demonstration – an occasion when a large group of people protest about something
appeal – an urgent request
tolerant – willing to accept
occasional – happening sometimes but not frequently or regularly
outbreak – the sudden start of war, disease, violence, etc.
ferocity – violence or extreme force
extent – the size or degree to which something happens
rubble – broken pieces of stone and brick from buildings, walls, etc. that have been destroyed
crisis – an urgent, difficult or dangerous situation
circumstances – facts or conditions that affect a situation
disputed – not in agreement
witness – someone who sees something happen
account – a written or spoken report on something that has happened ย
prosecutor – a lawyer whose job is to prove in court that someone accused of a crime is guilty
remand in custody – to keep under police control until a trial is held
pending – waiting for something to happen
Posted by Terry Fredrickson at 09:36 AM
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Apirak resigns
Apirak resignsBangkok voters will vote in a new governor election in January with Democrat deputy party leader Korn Chatikavanij tipped to run in the contest after Bangkok Governor Apirak Kosayodhin (photo) announced his resignation yesterday.
Mr Apirak’s resignation, which will take effect on Nov 20, came one day after he was implicated in City Hall’s fire engine procurement scandal by the National Anti-Corruption Commission (NACC). The anti-graft agency ruled that he had violated the Criminal Code’s Article 157 when he opened a letter of credit for the 6.8-billion-baht deal.
Mr Apirak, who was re-elected in a landslide victory on Oct 5, said his decision to step down even though the case has yet to go to court is to set a standard for Thai politics.
Mr Apirak protested his innocence, saying he had sought advice from various agencies, including the Interior Ministry and the Commerce Ministry, and was advised to open the letter of credit for the purchase to go through.
Election commissioner Prapun Naigowit said the new governor election is tentatively scheduled for Jan 11, noting that the Election Commission must fill the post within 60 days of Mr Apirak’s resignation.
He said Mr Apirak is not obliged to pay for the new election.
Mr Apirak also apologised to Bangkok voters who re-elected him as governor, and the Democrat party which backed his bid for re-election.
‘‘I apologise to the people for this. I also apologise to the Democrat party and the executive board. I will return after I go through the justice process,’’ said Mr Apirak.
He said he had decided to run in the city governor election in October because he was confident that he had done nothing illegal.
The party gave full support to Mr Apirak to fight the charges in the Supreme Court’s Criminal Division for Holders of Political Positions.
‘‘I think he has made the right decision. City voters can now choose a new governor instead of waiting in uncertainty,’’ said Democrat party leader Abhisit Vejjajiva.
Mr Korn, a Democrat MP, said the party never doubted Mr Apirak’s transparency and would do its best to help him fight the charges. ‘‘Mr Apirak has taken responsibility in a way that he believes will help the development of democracy,’’ Mr Korn said.
Mr Korn did not rule out running for Bangkok governor, saying he would comply with whatever the party decided.
tip – to say who you think will get a particular job ការនែនាំ
implicate – to show or suggest that someone is involved in wrongdoing ជាប់ទាក់ទង
scandal – a situation in which important people behave in a dishonest or immoral way that shocks people រឿងអាស្រូវ
graft – corruption អំពើរពុករលួយ
rule – (of a court or other group with similar authority) to make and announce a decision
violate – to do something that is against the law ល្មើសច្បាប់
criminal code – the systems of laws dealing with crimes and their punishment ប្រមូលផ្តុំច្បប់ព្រហ្មទណ្ឌ
article – part of a legal document, agreement or law that deals with a particular point មាត្រា
landslide victory – an election victory by a very large margin or amount ការឈ្នះដាច់
protested his innocence – claimed that he had done nothing against the law បញ្ជាក់មិនបានខុស
transparency – an honest way of doing things that allows other people to know exactly what you are doing
rule out – to stop considering something as a possibility ប្រកាស់ថាវាមិនអាចកើតឡើងបាន
comply – to obey a rule or law ប្រព្រិត្តតាមច្បាប់
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The Queen’s elephants
Chiengmai. Tonsak. Kungrao. Surin. The names of the star elephants at the Copenhagen Zoo are Thai because they are from Thailand.
Actually, most of the elephants at the 149-year-old zoo are principally from Thailand due to long-standing relations between the two countries.
The first two Thai elephants, Chang and Eng, arrived in Denmark in 1878 as a gift from the Danish consul in Siam.
The zoo’s successful elephant breeding programme began when Their Majesties the King and Queen gifted three elephants — Chiengmai, Lampoon and Buag Hah — to Their Majesties Frederik IX and Queen Ingrid as a royal gift during their state visit to Thailand in 1962.
‘‘Chiengmai is now the great-grandfather of 12 calves,’’ said zoologist Bengt Holst proudly. ‘‘They are housed in various zoos in Europe.’’
In 2001, Denmark received another three elephants from Thailand. Two of them — Tonsak and Kungrao — were royal gifts from Their Majesties the King and Queen to Their Majesties Queen Margrethe II and Prince Consort Henrik during their visit to Thailand.
Surin is a gift from the people of Surin province to the Danish people. ‘‘The Thai elephants are our biggest attraction,’’ said the zoologist, adding that they are considered the Queen’s royal elephants in Denmark.
qele2The royal elephants were moved from castle-like quarters to a more natural and stimulating abode this year, a ceremony presided by Prince Consort Henrik and his grandson Prince Christian.
The new Elephant House is covered with glass domes to allow more sunlight, with better temperatures and humidity control. The sand-covered floor helps protect the elephants’ legs and feet while providing a soft ground to lie on.
The outdoor area is shaped like a dry river bed with mud holes and a deep ditch for the elephants to bathe. There is also a distance between each feeding ground, thus forcing the elephants to walk for food as they would do in the wild.
The new Elephant House is designed by famous UK architect Norman Foster.
principally - mainly
consul - an official chosen by a government to live in a foreign city, in order to take care of people from the official's own country who travel or live there, and to protect the trade interests of that government
breeding - the keeping of animals or plants in order to produce young animals from them
calves - the young of various other large mammals such as elephants and whales
zoologist - a person who scientifically studies animals
Prince Consort - the title sometimes given to the husband of a ruling queen
stimulating - if an activity is stimulating, it causes your body to be active
abode - the place where someone lives
presided - to be in charge of a formal meeting or ceremony
ditch - a long narrow open channel dug into the ground usually at the side of a road or field, which is used especially for supplying or removing water, or for dividing land
bathe - wash
architect - a person whose job is to design new buildings and make certain that they are built correctly
Posted by Terry Fredrickson at 03:14 AM
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Mar's take on Venus
I THINK I'M one of those men who cannot understand women at all and there are several incidents that make me think perhaps I never will be able to.
For example, when my girlfriend and I are in a car and choose some music, I try to play something that she can listen to but she insists on listening to what I like despite the fact that our music tastes are on opposite corners of the universe. When we end up in an argument, she blames me for not giving her any respect and thinking only of myself!
There was once I had to involuntarily tell her stories about my exes and if I have to say, my girlfriend is one of the most jealous women in the country and I know the last thing I should do is to talk about any other woman, but my own mother, to her.
However, she persisted, and forced me to and after that, I was blasted for telling her the most disgusting story in the world. After that, we quarrelled for a whole week because of some bygone nonsense and she managed to make me feel as if I was the worst man in the universe for a while.
Actually, I don't expect girls to understand me but I actually wish they understood what justice means! For God's sake!
MICK VORANISA
Abuse the Youth's vocal/ guitarist
nourishing - if you nourish a feeling, you think about it a lot and encourage it
Mars - men
Venus - women
take on - a particular way of understanding something
incidents - events which are either unpleasant or unusual
insists on - states or demands forcefully, especially despite opposition
blames - says or thinks that someone or something did something wrong or is responsible for something bad happening
involuntarily - not done by choice; done unwillingly
exes - (in this context) ex-girlfriends
jealous - unhappy and angry because someone has something or someone you want
persisted - tried to do or continue doing something in a determined but often unreasonable way
blasted - criticised severely
disgusting - extremely unpleasant or unacceptable
quarrelled - fought, argued
bygone - belonging to or happening in a past time
justice - fairness in the way people are dealt with
Posted by Terry Fredrickson at 02:31 AM
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68,000 poor families of Cambodia receive emergency food assistance from ADB
68,000 poor families of Cambodia receive emergency food assistance from ADB
PHNOM PENH, Nov. 14 (Xinhua) -- Over 68,000 poor families of Cambodia have received emergency food assistance following the Asian Development Bank (ADB) Board of Directors' approval of the project last month, said an ADB press release here on Friday.
"This assistance is making a very real difference in the lives of Cambodia's most vulnerable, particularly its children," said ADB Country Director Arjun Goswami.
"Putting food on the tables of Cambodia's poorest families, just one month after the project's approval, is a commendable accomplishment by the government," he said, adding that food distribution has been supervised by independent NGO monitors.
One of the primary objectives of ADB's emergency food assistance is to help support Cambodia's efforts to ameliorate the food price inflation shock on the poorest and most vulnerable families in the seven provinces around the Tonle Sap Lake, and in three urban slums around Phnom Penh, said the release.
The project targeted the poorest 20 percent of poor families in 200 selected communes, it added.
The ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration.
Established in 1966, the ADB is owned by 67 members, 48 from the region. In 2007, it approved 10.1 billion U.S. dollars of loans, 673 million dollars of grant projects, and technical assistance amounting to 243 million dollars, according to the release.
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