SRP Calls for $500 Million Economic Stimulus Package

The SRP once again called upon the government Sunday to prepare a $500 million spending package to check the increasing fallout in Cam­bodia from the global financial crisis.

The SRP’s appeal comes on the heels of the bleak economic forecast from the International Mone­tary Fund, which on Friday projected a 0.5 percent drop in GDP for 2009. The organization attributed the slump to the global financial crisis.

SPR lawmaker Yim Sovann said the government should focus its spending on the agricultural sector to help buoy the livelihood of farmers, some of the country’s key economic producers.

“The government should ask the bank to reduce interest rates and delay the confiscation of farm property,” he said by telephone. “Also, the government should spend mon­ey to buy agricultural products from farmers to keep crop prices sustainable. Furthermore, they have to build up infrastructure and irrigation to improve agricultural productivity.”

Yim Sovann said three major in­dustries in the country, including the garment industry, construction and tourism, are already on the decline.

“The SRP agrees with the IMF report,” Yim Sovann said, calling the prediction of 6 percent GDP growth for 2009 by Prime Minister Hun Sen a “political number.”

In January, SRP President Sam Rainsy wrote a letter to the prime min­ister urging the government to provide a $500 million stimulus pac­kage for the Cambodian economy.

In its Friday statement, the IMF said the government should provide stimulus funds to combat the anticipated slide into negative territory.

“The mission and the authorities agreed that a larger fiscal stimulus, beyond that envisaged in the 2009 budget, now appears warranted,” the statement read. “The focus should be on pro-poor social outlays and safety nets and high-quality infrastructure projects that would strengthen competitiveness.”

The IMF also said the government could handle a budget deficit of about 4.75 percent of GDP, or roughly $500 million, without en­dangering the economy.

Government spokesman and In­formation Minister Khieu Ka­nha­rith could not be reached for comment Sunday.

CPP lawmaker Cheam Yeap, who chairs the National Assembly com­mission on finance and banking, dismissed the IMF’s findings. He said the report was only an estimation and subject to change.

“I disagree with the report be­cause I always pay attention to the progress of our country’s economy,” he said Sunday. “It is just the first three months of the year, and we all will try our best to push the economy forward.”

“The report is just a prediction, and usually the predictions of the IMF and the World Bank do not be­come true,” he added.

Hang Chuon Naron, secretary-general for the Ministry of Finance, declined to comment Sunday on the IMF’s forecast and Secretary of State Aun Porn Moniroth referred questions to Finance Minister Keat Chhon, who could not be reached by telephone.

 

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