SRP proposes $500-million stimulus package to cope with world economic crisis

January 18, 2009

SRP PROPOSES A $500-MILLION STIMULUS PACKAGE

TO COPE WITH WORLD ECONOMIC CRISIS

As published today in Khmer-language newspaper Rasmei Kampuchea, on January 16, opposition leader Sam Rainsy wrote to Prime Minister Hun Sen urging the Government "to take appropriate measures" and "to prepare a US$500-million economic stimulus package", "in order to counter the fallout from the world economic crisis, which is taking an increasingly heavy toll on Cambodia."

Full text of the original letter in Khmer at http://tinyurl.com/856ex7

English translation below and at http://tinyurl.com/7urlzy

Article in Rasmei Kampuchea at http://tinyurl.com/8mk7uh

SAM RAINSY'S LETTER TO HUN SEN

Translation from Khmer

Phnom Penh, 16 January 2009

To:

Samdech Hun Sen

Prime Minister of Cambodia

Through: His Excellency Nguon Nhel, Acting President of the National Assembly

Object: Request to the Government to take appropriate measures, in particular to prepare a US$500-million economic stimulus package, in order to counter the fallout from the world economic crisis, which is taking an increasingly heavy toll on Cambodia.

Considering:

- Article 96 of the Constitution of the Kingdom of Cambodia.

- Detailed information that has already been widely published regarding the world economic crisis which started more than a year ago and is extending to all countries especially in Asia.

- Factual developments in Cambodia which reflect the consequences of the world economic crisis, such as:

• sharp fall in the prices of agricultural products and similar decline in farmers' revenues and living conditions;
• drop in land prices, property market hit by glut, construction works have stopped in many places;
• factories have closed, tens of thousands of workers and employees in the garment, construction, tourism and service industries have lost their jobs;
• living conditions for the population as a whole keep deteriorating because retail prices and interest rates for borrowing money remain excessively high.

- In the State budget for 2009, which the National Assembly and the Senate adopted in December 2008, there is no provision whatsoever to address the new situation resulting from the world economic crisis.

- Many countries in Asia, such as Japan, China, India, Indonesia, Malaysia, Vietnam and Thailand, have prepared and are implementing economic stimulus packages amounting to several US$ billions for each country, as a response to the world economic crisis.

In line with the above object and considerations, I would like to request the Government to consider taking a number of appropriate measures in order to support economic activity and help Cambodia avoid the worst effects of the world economic crisis.

Among the proposed measures, there is a US$ 500-million economic stimulus package. A portion of the required funds should be obtained from internal borrowings while the rest should come from international assistance as a special emergency aid.

The State is to use the US$ 500 millions in order to implement a number of special projects, such as:

- setting up mechanisms to support agricultural prices on the market since they determine farmers' revenues and living conditions;

- building infrastructures that Cambodia lacks most (roads, railways, water-control and irrigation systems, housing for the poor);

- works to protect the environment and to restore the ecological system that has been disrupted nationwide, including replanting trees (reforestation) and dredging lakes and rivers;

- tax cuts and reduction in fees for the use of public services;

- special social allowances;

- loans with reduced (lowest possible) interest rates for the needy.

Like neighboring countries which are re-adjusting their economic policies and in order to help Cambodia compete with them, the State must actively intervene in the country's economy by implementing appropriate fiscal and monetary measures so as to boost economic activity and create jobs by increasing aggregate demand in line with Keynesian theory of economics, which has regained general acceptance all over the word.

I hope that the Government will consider my proposals aimed at defending Cambodia's economy and the Khmer people's living conditions as elaborated above.

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Sam Rainsy

Member of Parliament

SRP President