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Kingdom’s poorest bore brunt of financial crisis

Kingdom’s poorest bore brunt of financial crisis

THE global financial crisis has disproportionately affected Cambodia’s rural and urban poor, according to a Cambodian Economic Association (CEA) survey released yesterday.

Job loss and declining income were widely experienced during the crisis, according to residents of 15 villages sampled last year, but the report’s joint author said that many were unaware of the source of their financial challenges.

“Some people didn’t know anything about an international crisis; they just knew their income dropped,” CEA President Chan Sophal said.

According to the report, “Impact of the Economic Downturn on Households and Communities in Cambodia”, decreasing incomes and job loss particularly affected the urban poor during the crisis: 61 percent reported those factors as their main challenge in 2009 – a dramatic rise from 0.9 percent the year previously.

Around 15 percent of rural poor people said their main difficulty was falling wages, according to the report, up from zero in 2008.
Paying for healthcare presented a major challenge for most rural dwellers, the report added.

Inflation had previously been the most significant problem, with 47.7 percent of rural poor and 64.2 percent of urban poor reporting higher food prices as their largest difficulty in 2008.

Also, 75 percent of respondents said they began purchasing less-expensive food last year, and more than half said they were forced to reduce overall food consumption.

Compared to the 2008 figure, 9 percent more households reported taking out loans.

Although Cambodia had been hard-hit by the crisis that began in the American sub-prime mortgage market, Chan Sophal said growing international ties were still a greater benefit than drawback, to the Kingdom.

“Domestic exposure to external economies is large. Although there was a hiccup, the benefits brought by globalisation outweigh the costs,” he said.

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