Finance Minister Keat Chhon told conference delegates in Siem Reap on Friday that Cambodia had suffered from decreasing demand since the crisis hit as risks have risen in the economy.

In speech to Siem Reap meeting, Finance Minister Keat Chhon acknowledges unexpected problems posed by global crisis

SIEM REAP

[In] a free market someone can buy all the rice and sell it for $100 per kilo.

MINISTER of Economy and Finance Keat Chhon told an economics conference in Siem Reap ended Saturday that the economic crisis had presented Cambodia with “unexpected challenges”, promising that the Kingdom would uphold the rule of law and economic freedom in dealing with the fallout.

Speaking in a keynote address to gathered delegates at the two-day event, the minister acknowledged Friday the drop in demand for Cambodian goods and the increased financial risks that hit the Kingdom’s narrow economy.

“Cognisant of the correlation between the rule of law and economic growth … our responses to the crises respect the rule of law and economic freedom,” he said at the annual Economic Freedom Network Asia event at the Sofitel Angkor Phokeethra hotel, organised by the Friedrich Naumann Foundation for Freedom (FNF), a German NGO dedicated to putting the ideas of economic and political liberalism into practice across the developing world.

The meeting saw regional experts, as well as those from further afield, come to Siem Reap to discuss and share economic information and ideas as part of the event, which was titled “Overcoming the Global Financial and Economic Crisis: The Rule of Law as the Key to Economic Freedom”.

Speaking Friday on the sidelines of the conference, Rainer Adam, FNF regional director for Southeast Asia, told the Post that economic production could be achieved at the smallest, but that ordinary peoples’ rights were too often not protected in the Kingdom.

“The informal sector is full of entrepreneurs. They do have capital, even if we may not appreciate it as such. It may be a bicycle, a pushcart, a portable stove,” he said. “In the cities, they are treated as a nuisance. Their property rights are not being respected.”

The matter of Cambodia’s recent land disputes – including seizures and evictions that have sometimes turned violent – was largely absent from the conference’s discussions, and participants focused instead on a social justice issue that has achieved more positive development: the empowerment of Cambodia’s farmers and rural communities.

Son Koun Thor, vice chairman of the Supreme National Economic Council of Cambodia and head of the Rural Development Bank, said that his organisation was working to increase the accessibility of agricultural loans, including a pilot project to provide 500 microfinance loans totalling US$200,000 to rural households.

Globally disconnected

However, Son Koun Thor expressed poor Cambodians’ deep-seated ambivalence about the supposed benefits of total free-market exposure being advocated by others at the conference.

“If you have the money, you can buy rice at US$1 per kilo. But if you apply a free market, someone can buy all the rice and then sell it for $100 per kilo,” he noted.

According to anecdotal evidence, particularly from the government, the roughly 21,000 garment workers that have failed to be absorbed back into the sector this year have largely returned to the provinces to work on family farmland, boosting what is tipped to be the best economic performer this year: agriculture.

International agencies including the Asian Development Bank and International Monetary Fund have forecast agricultural growth to reach around 5 percent this year while last month forecasting that Cambodia’s overall GDP would shrink by up to 2.75 percent this year.