Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodian economists reject recent GDP forecasts

Cambodian economists reject recent GDP forecasts

Cambodian economists reject recent GDP forecasts

090409_14.jpg
090409_14.jpg

Opposition says reports on poverty and negative growth remain valid, critics say projections don’t reflect situation on the ground

Photo by:

TRACEY SHELTON

Disputes have surfaced over the extent to which the financial crisis is projected to force additional Cambodians into poverty.

CAMBODIAN economists and analysts on Tuesday dismissed predictions by international institutions that projected negative growth in Cambodia in 2009, such as Tuesday's World Bank report, while the opposition has agreed with such forecasts.

The director general of the Cambodian Chamber of Commerce, Nguon Meng Tech, disagreed with the World Bank's forecast Tuesday that Cambodia faced negative growth this year, but called for the Ministry of Labour to quickly take action to create jobs or face the risk of increased social problems such as crime. The middle class would likely see income fall but would unlikely drop below the poverty line, he added. "In this era, no one faces starvation," he said.

Sam Rainsy lawmaker Yim Sovann said he agreed with the World Bank, ADB and Economist Intelligence Unit (EIU) that the crisis would cause social problems.

"Our economy is getting worse ... the government doesn't have any reasonable plan to help the economy," he said. The worst-case scenario was a rural poverty level of 85 percent, he said, with the four key pillars of the economy all at risk - many factories have closed, agricultural commodities have few markets, tourist numbers have decreased and the construction sector is struggling.

Yim Sovann said that during years of double-digit growth, the government had only reduced poverty by 1 percent annually - a figure that equals the aims of the UN Millennium Development Goal on poverty reduction.

"If GDP growth falls to -1 percent ... poverty could increase to 40 percent," he said.

Chap Sotharith, senior fellow economist for the Cambodia Institute of Cooperation and Peace (CICP), said he disagreed with the projections released by international organisations on Cambodia's productivity. "For me, Cambodia's risk of a downturn would not mean negative growth," said Chap Sotharith, who said a forecast of 5-6 percent growth was more likely given Cambodia's dependence on agriculture.

Export revenue made up just 20 percent of the economy, he added. "We are facing some problems but not a huge problem; there is no need to worry about a recession. Look, we had good rain earlier this year, so it is a sign that the agricultural yield will be huge," he said.

People had been used to saving money for a long time, he said, adding that there was no clear definition of poverty in Cambodia.

The World Bank on Tuesday defined the poverty line across the region as living on less than US$1.25 a day, which would result in 200,000 additional Cambodians falling below the mark this year, the most in Southeast Asia, it said.

The Cambodian government in the past has set $0.60 a day as the poverty line, a figure that the World Bank has also previously used.

MOST VIEWED

  • Japan bank buys major stake in ANZ Royal Bank

    Japan's largest bank acquired more than half of ANZ’s shares in Cambodia on Thursday, according to a statement from Kith Meng’s Royal Group. Japan's JTrust Bank, announced that they had acquired a 55% of stake in ANZ Royal Bank. According to a Royal Group

  • Proof giants walked among us humans?

    For years a debate has waged about whether certain bas relief carvings at the 12th-century To Prohm Temple, one of the most popular attractions at the Angkor Wat Temple Complex in Siem Reap province, depicted dinosaurs or some rather less exotic and more contemporary animal,

  • Long way to go before Cambodia gets a ‘smart city’

    Phnom Penh, Siem Reap and Battambang will struggle to attain smart city status without adopting far reaching master plans, according to officials tasked with implementing the program. The brainchild of the Association of Southeast Asian Nations (Asean), the smart city program seeks to link up

  • Endangered animals found dead in Pailin

    An endangered gaur was one of “many” wild animals found dead in “dozens” of illegal traps in Pailin province’s Phnom Khieu Wildlife Sanctuary, said Chit Thy, a military officer working with rangers to protect the conservation area, on Wednesday. Thy, an officer in the 507