Inflation Reports Withheld Before Poll: Minister

Minister of Planning Chhay Than on Monday admitted that his ministry intentionally withheld reports showing high rates of inflation last year because they did not want high prices to have an effect on the July 2008 national election, which was won by the ruling CPP.

Inflation grew to 18.3 percent from January 2007 to January 2008, according to the consumer price index released by the Planning Ministry’s National Institute of Statistics in March. But following the release of that high figure the ministry didn’t put out another monthly CPI report for six months, during which time inflation peaked at around the same time as the national election.

According to a December report by the World Bank, inflation hit a record high of 25.7 percent in May last year.

“We just wanted to keep the good feeling [of citizens] before the election and avoid the wrongful interpretation of politicians,” Chhay Than said by telephone, adding: “We wanted a positive number for the people.”

The suspension of the inflation figures, he maintained, was “not for fear of a negative impact on the CPP’s votes.”

Chhay Than, who is a member of the CPP, said in June 2008, the middle of the CPI suspension period, that the figures were not being suppressed for political reasons.

“This is not the government’s intention to hide inflation,” he said at the time, adding that the suspension on the inflation figures was due to a review of the method used to calculate the inflation rate.

On Monday Chhay Than maintained that methodology remained a factor in the decision, but he would not answer questions about his June insistence that politics played no role.

The minister added that the decision to withhold the CPI meant little because inflation was no secret and apparent in markets throughout Cambodia.

“I think this won’t lead to mistrust of the government by citizens,” he said.

Information Minister and government spokesman Khieu Kanharith could not be reached for comment Monday, but in a local media report Monday he too admitted that the government suspended the inflation statistics so they would not reflect poorly on the government, saying “every political party has its tricks.”

Representatives from the Inter­national Monetary Fund and Asian De­velopment Bank, while not specifically criticizing Chhay Than’s re­marks, reiterated the importance of trans­parency in government statistics.

“It’s critical that the compilation and dissemination of economic statistics be independent of the political process to ensure that they provide accurate information on which macroeconomic policy decisions can be based, and to safeguard public confidence in them,” IMF Resident Representative John Nelmes wrote in an e-mail.

Arjun Goswami, country representative for the ADB, said he found it difficult to believe that Chhay Than would make such statements.

“We’ve already said that there should be transparency in the presentation of statistics,” he said, adding that businesses need accurate figures.

“In the sense that businesses are calculating their costs, it’s important to understand what the rate of inflation is,” he said.

Chan Sophal, president of the Cambodia Economic Association, said the government should not have withheld the figures.

“That’s not good. I think we should have objective statistics,” he said. Inflation, he added, had more to do with global factors like oil prices than the government.

“I think in a mature democracy they can handle this in a better way,” he said.

SRP President Sam Rainsy called the decision by the government “irresponsible” and said it shows poor adherence to democratic principles.

“This reflects poorly on the government: the lack of transparency, the lack of democracy, the lack of accountability on the part of the current government,” he said.

Koul Panha, director of the Com­mittee for Free and Fair Elections, said that the government’s actions hurt democracy and people need to know the truth about the economy to make educated choices.

“It hurts democracy because freedom of information is the key, the most important tool for promoting democracy,” he said.

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