Cambodia’s economy is still languishing but there are faint signs of recovery and market vendors are expressing hope in the future, according to a new survey released last week.
The economy in the second half of 1998 seemed to improve over the same period in 1997 in spite of the post-election economic crisis, a survey by the Cambodia Development Resource Institute found.
Although “immediate prospects have improved,” the picture remains bleak. Consumer prices of basic goods are still rising, spending is still down and everyone from vendors to scavengers is struggling to make ends meet.
After months of sluggish business and a slumping economy, many vendors had hoped the July polls would bring relief—a return of the investors, tourists and international donors who left after the fighting of July 1997.
But the apparent stability that came with the coalition government formed last month has not yet had a significant impact on consumer confidence.
Although vendors at five markets around Phnom Penh reported that consumer spending in November was up slightly compared to December 1997, in general sales are still down.
Spending on luxury items such as jewelry and televisions was 60 percent down from the period before the July 1997 factional fighting. According to the survey, there was no significant boom during the Water Festival and Pchum Ben festivals, traditionally busy times.
The drop in sales has had a serious impact on the spending of the vendors. Some told CDRI researchers they have reduced the size of their meals from three dishes to only one or two. A few said they now spend less on their children’s education.
Vegetable seller Ly Samnang said this week she is living off her savings from the boom during Untac, when her stall at Phsar Thmei was always busy.
“I don’t earn enough to support my family,” said the 50-year-old vendor, who sometimes makes as little as 2,000 riel ($0.52) per day.
The ongoing business slump continues to be accompanied by a rise in inflation. Since August, the price of pork has risen 800 riel per kilogram to 9,275 riel ($2.44). Cabbage has jumped to 2,145 riel per kilogram, nearly double its price in August.
The report described as “worrying” that the price of fish is at its highest level in 18 months—up to 9,100 riel ($2.39) per kilogram from 7,857 riel in August. Vendors also reported a decrease in the supply of fish and purchases of fishing nets as low as a third of last year’s sales. Vendors interviewed by CDRI blamed the low water level of the Mekong River and over-fishing for the relative scarcity of fish and poor net sales.
The survey also noted that the incomes of porters, scavengers and cyclo drivers have continued to decline.
Other sectors are hurting as well. Although performance by the domestic manufacturing sectors improved compared to this time last year, it still shows a decline compared to before the factional fighting in 1997.
Quotas soon to be imposed by the US on several categories of garment exports that are manufactured by many companies in Cambodia have factory owners worried, according to the report.
Exports in total declined 9 percent in both the first and second quarters of 1998 compared with the figures for 1997, the report stated, mainly due to a sharp drop in the export of wood-related products.
The report expects the new government to attract more aid, tourism and investment.
But not everyone sees recovery around the corner.
“I don’t know about the future,” said Phsar Thmei fish vendor Keu Sreng. “I don’t expect things will get better than this.”