Cambodia’s economy grew marginally in 2009, Phan Phalla, deputy secretary-general of the Supreme National Economic Council, announced yesterday at a financial roundtable discussion in Phnom Penh.
The estimate contradicted the independent projections of contractions in the economy ranging from -1.5 percent to -2.75 percent made late last year by the World Bank, Asian Development Bank and International Monetary Fund.
“We just got the figure, the GDP growth of 2009, which is 0.09 percent. At least we are not in negative territory like some institutions have predicted,” said Mr Phalla, adding that the figure was still preliminary.
Eric Maskin, the 2007 Nobel laureate for economics, and Chhun Vannak, associate dean and management and economics professor at Pannasastra University, joined Mr Phalla to analyze Cambodia’s financial situation at the discussion.
“First, we need to diversify,” Mr Phalla said of Cambodia’s economy. “Second is we need to intensify and the third one is social protection and the last one is we need to manage our resources properly.”
Mr Phalla said in addition to needing more industries, Cambodia should also be investing more in its garment industry, which accounts for 85 percent of exports, to increase its value.
Mr Maskin gave an overview of how proponents of globalization theorize that it will benefit developing countries.
“There is a shift to low-skill industries, which better suits the labor force. That is, after globalization there is going to be an increase for the unskilled labor and therefore an increase in wages going to unskilled workers because there is more output produced,” Mr Maskin said, adding that it should, theoretically, lead to the end of inequality.
But the introduction of foreign capital does not allow this to happen because investors prefer to support skilled workers, which leaves the unskilled workers even further behind, he said.
SPR lawmaker Tioulong Saumura, a former investment banker, challenged the views of the economy presented by the three panelists. In response to Mr Maskin’s and Mr Phalla’s earlier statement that Cambodia’s economy grew solidly even reaching double-digit growth for multiple years, Ms Saumura said she doubted this was sustainable because, she said, it was the result of exploiting the country’s natural resources.
She said Cambodia would not attract foreign investment unless a “regulatory framework was complete and developed.” The main issue is not a lack of skilled workers, Ms Saumura argued, it is corruption.
“Corruption is taking a heavy toll,” she said. “The first step to take is to fight corruption.”
