Logo of Phnom Penh Post newspaper Phnom Penh Post - Government should take economic bailout seriously



Government should take economic bailout seriously

Government should take economic bailout seriously

Dear Editor,

In the front-page article "SRP calls for govt bailout" in the January 19 edition of The Phnom Penh Post, you wrote  "opposition leader Sam Rainsy has called on the government to set aside a US$500 million economic stimulus package to offset the local effects of the world financial slump, claiming ‘tens of thousands' of Cambodian jobs have been lost to the global crisis". This article correctly reflects the spirit of my January 16 letter to Prime Minister Hun Sen drawing his attention to Cambodia's vulnerability in the face of the ongoing world financial crisis and to the seriousness of its worsening impact on our economy, the unprecedented fall in agricultural prices literally strangling our farmers, massive job destruction in the hitherto-growing nonagricultural sectors (garment, construction, tourism), and the collapse of the property market.

The suggested $500 million stimulus package would be the first emergency measure designed to alleviate the fallout from the world crisis and to prevent economic, social and political upheavals with incalculable consequences for Cambodia's stability and long-term development.

However, in the above mentioned article, Information Minister Khieu Kanharith is reported as saying there is no need for such a package because the government has already reserved funds for unforeseen circumstances, as it has been doing every year in the annual state budget. He is quoted as saying: "We have a reserve budget, not only for the global economic crisis but also for other disasters such as floods, and so forth", although he reportedly could not remember the exact amount set aside for 2009.

What the government has actually set aside for the 2009 fiscal year as "unplanned expenditures" - $144 million compared with $132 million for 2008 - is not adequate to cope with the deteriorating situation. Firstly, in the amount being far too little, and more importantly, in the concept, because the package must be thoroughly planned in order to produce its expected effects. For this purpose, we must forget "floods" and similar contingencies for a while, and concentrate on macroeconomics, fiscal policy, monetary policy, job creation, full-employment equilibrium, aggregate demand, deficit spending and other elements of Keynesian economic theory.

I would like to respond also to National Assembly Vice President Nguon Nhel who is quoted, in the January 18 edition of Khmer-language newspaper Rasmey Kampuchea, as saying the government does not need to follow my recommendation related to the world economic crisis because it has already taken "measures against inflation". Apparently, Mr Nguon Nhel does not realise that the problem is no longer inflation but deflation and recession.

Sam Rainsy

Member of Parliament

MOST VIEWED

  • Kingdom's Covid cluster cases jump to 194

    The Ministry of Health on February 25 confirmed 65 new cases of Covid-19, with 58 linked to the February 20 community transmission. The latest cluster cases include nine Vietnamese nationals, five Cambodians, one each from Korea, Singapore and Japan, with the rest being Chinese. This brings the total number

  • Locations shut, dozens more Covid-19 positive

    The Ministry of Health has closed 23 locations in connection with the February 20 community transmission of Covid-19 and summoned for testing anyone who had direct contact with affected people and places. The number of discovered related infections has risen to 76, including 39 women. In a press release,

  • Cambodia's Covid cluster cases rise to 137

    The Ministry of Health on February 24 recorded 40 more cases of Covid-19, with 38 linked to the February 20 community transmission. Of the 40, two are imported cases involving Chinese passengers. The 38 include two Vietnamese nationals and one Cambodian, with the rest being Chinese. This brings the total cases

  • Covid cluster raises alarm, health bodies urge vigilance

    The Ministry of Health and the World Health Organisation (WHO) in Cambodia have expressed great concern over the February 20 cluster transmission of Covid-19 in the community. Both entities appealed for vigilance and cooperation in curbing further spread of the virus. Ministry spokeswoman Or Vandine said

  • PM confirms third Covid-19 community transmission

    Prime Minister Hun Sen on February 20 announced the Kingdom's third outbreak of Covid-19 community transmission after 32 people tested positive in just over 10 hours. Addressing the public from his residence after an emergency meeting, Hun Sen said: "I dub it February 20 Community Event, in which 32 cases

  • AstraZeneca jabs touch down in Phnom Penh airport

    The first shipment of 324,000 doses of the AstraZeneca/SII vaccine which was provided through the Covid-19 Vaccines Global Access (COVAX) Facility was delivered to Phnom Penh International Airport on March 2. The rest of the COVAX provided vaccines will arrive in Cambodia at a later date.