Diversify economy, says PM

Written by Kay Kimsong
Friday, 13 March 2009

Hun Sen calls for end to reliance on struggling export markets

WITH some analysts expecting Cambodia's economy to contract for the first time in recent memory, Prime Minister Hun Sen urged the private sector Thursday to diversify beyond traditional export markets and announced more government help for crisis-stricken families.

"We have a large pool of talented people available to help Cambodia - they are from the government, development partners, and research and policy institutes," he said, speaking in front of more than 100 representatives from the government, the private sector and international development agencies gathered at the 2009 Outlook Conference at the Phnom Penh Hotel.

He said the government would make more funding available to unemployed urban workers looking to relocate to the countryside. He also announced further support for small and medium-sized enterprises in rural areas.

"We owe it to these vulnerable groups to ensure that our responses to the crisis meet their needs through sustained economic activity and access to employment and livelihoods, and the development of social safety nets ... through mechanisms such as food relief and cash transfers," he said.

Commerce Minister Cham Prasidh said he believed the crisis would soon come to an end, but he pressed the private sector to diversify and expand into sectors other than tourism and agriculture.

He said that the crisis had led to 5 percent drop in Cambodian exports and the loss of 51,000 jobs. He also said that the value of exports had dropped 50 percent since January 2009.

But he added that some sectors, including tourism were still putting in strong performances. "Tourism used to grow 20 to 25 percent a year, but now it is growing by about five percent. That is still a good rate of growth," he said.

But Tith Chantha, director general at the Ministry of Tourism, said he expects the tourism sector to decline further. According to ministry figures, 218,691 tourists visited Cambodia in January, down 2 percent compared with 2008.

The ministry is predicting that tourist arrivals will stay flat or decline as much as three percent, Tith Chantha said. He added that a 3 percent drop in tourist arrivals could cost Cambodia US$50 million and 10,000 jobs. Each job in the tourism sector, he said, supports three people living in the provinces. Last week the International Monetary Fund predicted that the economy would contract 0.5 percent this year.