Cambodia’s economy, as measured by the gross domestic product, grew by 4.3 percent in 1999, slightly above the 4 percent projection, according to government statistics.
A document released late last week at the donors’ quarterly meeting showed that the GDP rebounded nicely after lackluster performance in the aftermath of the factional fighting of 1997 and during the Asian economic crisis.
“The figure is better than our projection,” said So Victor, undersecretary of state for the Ministry of Economy and Finance. “This shows a good sign in the country’s economic recovery. We’d like to keep this pace.”
The report issued by the Council for the Development of Cambodia, which also monitors investment, attributed the growth to continued expansion of exports especially of garments, a 26 percent jump in tourism and favorable crop harvests.
The report also stated that the inflation rate dropped to almost zero percent after rising 12.6 percent in 1998. The riel’s exchange rate remained stable at around 3,800 riel to $1 during 1999.
Political stability and improvements in production also were cited.
In addition, the report praised the country’s fiscal performance, saying domestic revenues jumped by 40 percent from 8.6 percent of GDP in 1998 to 11 percent in 1999. The improvement was largely due to the implementation of a value added tax and revenues gained from garment quota bids.
However, So Victor cautioned that the growth is not good enough to develop the country and reduce poverty.
“After the 1998 elections, everything went back to normal,” he downplayed. “The growth in GDP between 0 and 4 percent is nothing. A country like Cambodia should have a two-digit growth in GDP.”
He said the government projects 5.5 percent growth this year.
“A 7-8 percent [annual] growth in GDP would come very soon, probably by the year 2003,” So Victor added, as long as political stability continues.
Urooj Malik, country representative for the Asian Development Bank, agreed the growth isn’t high enough to alleviate poverty.
“A 4-5 percent growth in GDP is too low to significantly” reduce poverty, he said, also saying that a 7 to 8 percent annual growth is needed.
“And benefits of the growth should be equitably spread to rural areas, particularly agriculture and natural resource development.”