Prime Minister Hun Sen on Tuesday urged ASEAN leaders to plot a strategy for recovery and reinvigorating the economy once the Covid-19 virus is contained.
Since it emerged in December last year, the pandemic has impacted global and regional demand and has disrupted the entire production chain, leading to an economic downturn.
Speaking at the ASEAN Special Summit on Covid-19 via video conference, Hun Sen said the virus swiftly and substantially battered one sector after another.
Its spread has deterred the development of the ASEAN bloc, he said, not only in the health sector but in tourism, trade, finance, industry, as well as the livelihood of the people.
“Cambodia is of the view that ASEAN needs to further accelerate the implementation of existing plans and mechanisms, such as promoting regional economic integration, abolishing non-tariff barriers to trade, and further easing trade [rules].
“We have to enhance the implementation of ASEAN’s integration initiatives by focusing on promoting micro, small and medium enterprises as well as technological and innovative start-ups; enhancing public-private partnership in digital economy; and developing digital human resources and skills” said Hun Sen.
Released earlier this month, Asian Development Outlook 2020 (ADO 2020), the Asian Development Bank’s (ADB’s) annual flagship economic publication, said Southeast Asia will track China and decelerate to 1.0 per cent growth this year.
All economies in the sub-region will endure a growth slowdown this year because of the pandemic and a consequent global slump, especially given their strong trade and investment ties with the slowing Chinese economy, said the ADO 2020.
Thailand, the second-largest economy in the sub-region, will likely contract by 4.8 per cent this year, continuing a steady slide in recent years, it said. Growth in the closely intertwined economies of Malaysia and Singapore will plummet nearly to zero this year.
Indonesia will see sharp deceleration, as will the Philippines despite expansionary government policies, which should facilitate an upturn next year. Growth in Vietnam is forecast to decelerate significantly but remain uniquely robust in the sub-region.
With most economies weakening and global oil prices softening, sub-regional inflation should stay tame at just 1.9 per cent this year and 2.2 per cent next year.
The ADB projected that Cambodia’s real growth will slow to 2.5 per cent this year, but is set to rebound to 5.9 per cent next year under the baseline scenario.
“The slowdown is mainly affected by the pandemic, the resulting economic slowdown in the major advanced economies . . . and the [Kingdom’s] reduced access to export markets,” it said.
Late last month, Hun Sen said the Kingdom remains open to cross-border trade with neighbouring countries, but the borders will remain closed to citizens and travellers.
He said this to calm public fears that the cost of consumer goods would rise following the closure of all borders with Vietnam, Thailand and Laos by March 23.
“Yesterday [On March 24], we got around $2 million in revenue from Customs at the Poipet International Border with Thailand in Banteay Meanchey.
“At the same time, we will collect the revenue from Customs taxes at the border gates with Vietnam and Laos because we’re still exchanging goods,” he said.