A newly-released World Bank report says Cambodia will be the
hardest-hit country in the region as the global economic crisis
continues to wreak havoc.
CAMBODIA is set to be the country hardest hit this year by the global
economic crisis in the Asia-Pacific region, the World Bank said today,
placing the Kingdom among only four countries projected "to experience
absolute increases in poverty".
In a report released today, the bank said that Cambodia -
along with Malaysia, Thailand and East Timor - would see contractions
in per capita income and therefore increased poverty, noting that the
Kingdom's weaker GDP growth, which the bank again revised downwards to
-1 percent for 2009, would slow poverty reduction across the region.
"Cambodia is the country with the largest projected increase in the number of poor people," the World Bank said.
It projected 200,000 additional people in the Kingdom this year would
be pushed below the poverty line - defined by the bank as US$1.25 a day
- compared to East Timor, where a further 25,000 were forecast to sink
The World Bank in February said that Cambodia had reduced
poverty from 45 percent to 50 percent in 1993-1994 - a figure that
improved to around 30 percent by 2007.
The report also said that Cambodia would see the greatest GDP growth reversal in the region.
"An expansion of 10.2 percent in 2007 stands in stark contrast to a contraction of 1 percent projected for 2009," it said.
"The difference (11.7 percent) over two years is the largest in
the region, and arises from a sudden drop in garment exports and
Neighbouring Thailand is projected to see the next biggest
reversal at -7.6 percent over the same period, followed by Malaysia
with -7.3 percent. GDP growth in developing East Asia, as a region,
will see a -6.1 percent reversal in the same period.
The World Bank's growth projection for Cambodia is among the
lowest so far after the London-based Economist Intelligence Unit
forecast a 3 percent contraction in 2009 in its March outlook.
The International Monetary Fund last month estimated -0.5
percent growth and the Asian Development Bank last week said Cambodia's
growth would slow to 2.5 percent.
The World Bank blamed a narrow economic base and over-dependency on exports for the country's projected economic reversal.
"The economy is affected by simultaneous declines in export
orders for garments (which account for almost four-fifths of exports,
and most of the shipments are to the US), a drop in construction, a
collapse in private capital inflows and a sharp slowdown in tourist
arrivals," it said.
"Credit growth that helped fuel the earlier expansion, including in real estate, has slowed sharply."
The World Bank noted that Cambodia had taken a number of
measures to fight the financial crisis, including tax holidays until
2012 for foreign direct investors and larger aid for food supplies.
"Efforts are underway to support agricultural producers and provide
trade financing to exporters," it added.