National Assembly President Prince Norodom Ranariddh expressed concern Monday that rising fuel prices will negatively affect Cambodia’s ability to attract foreign investors and could impede economic growth.
“This fuel price has increased…
so the attraction for investment to Cambodia has huge problems,” he told reporters outside the Assembly on Monday.
“The first problem is that the cost of doing business here is too high; we can’t compete with neighboring countries any more,” he said.
Prince Randariddh said high energy costs are especially harmful in light of the end of garment quotas.
“We must [now] compete for the markets with very powerful countries,” the prince said.
The end of garment quotas on Jan 1 led the International Monetary Fund to predict that economic growth could be as low as 2 percent this year. In comparison, in 1999, Cambodia had 10 percent growth per year.
World Bank Chief Economist for East Asia Homi Kharas said last month that because Cambodia’s economy is so dependent on oil imports, lower oil prices would have a significant buoyant effect on growth.
Economic Adviser for the Council of Ministers Chap Sotharith said higher gas prices affect all sectors of the economy, starting with motorbike taxi drivers and resulting in overall increased transportation costs.
“The government is unable to stop this increase,” he said. “In Thailand and Vietnam, the governments have money to issue to reduce the increase in price.”
Although world oil prices dropped $0.55 Monday to $53.78 a barrel, they are roughly 52 percent higher than a year ago, according to The Associated Press.
As of Monday, gas prices at Caltex in Phnom Penh were 3,250 riel per liter for gold and 3,150 per liter for silver.
(Additional reporting by Erik Wasson)