Sam Rainsy's letter published in The Cambodia Daily, February 9, 2009
STIMULUS PACKAGE "REASONABLE" WITH REDUCED GOVERNMENT CORRUPTION
In "Reforms Needed To Tackle Crisis, Forum Told" (Friday, page 1), it was
reported that "[Prime Minister] Hun Sen rejected an opposition recommendation
of a $500 million stimulus package as 'unreasonable' for Cambodia given its
budget."
On January 16, in my capacity as an elected representative of the people, I
wrote to the prime minister suggesting that the government adopt a series of
appropriate and urgent measures to cope with the unfolding world financial
crisis.
In particular, I suggested a $500 million stimulus plan designed to reduce the
economic and social repercussions from the global slump that are being
increasingly felt by Cambodia ("Sam Rainsy Urges Government To Prepare Stimulus
Package", January 19, page 33).
The indirect and negative response I received through the press shows either
the government does not yet fully understand the seriousness of the situation
or it lacks the sense of responsibility to take appropriate action.
What Mr Hun Sen said at last week's Third Annual Cambodian Economic Forum seems
no more than a repetition of long-heard commitments that proved to be lip
service for the donors' easy satisfaction. The Prime Minister is quoted as
saying: "In the current context, the Royal Government clearly sees the
opportunity and needs to push forward the systematic and interrelated reforms,
which aim at improving investment and business climate."
The key word among all the empty ones we often hear, is "reforms". But what
long-awaited reforms have been implemented over the past 10 years? Land reform?
Judicial reform? Civil service reform? Anti-corruption reform? None of them. In
particular, the anti-corruption law, which has officially been "in preparation"
for more than a decade, is still in limbo.
My proposed $500 million stimulus package is considered "unreasonable" compared
with Cambodia's budget of $1.8 billion for 2009. But in 2004, a USAID-funded
corruption assessment highlighted the significant loss in state revenue due to
smuggling, bribes and other illegal practices, which possibly totaled as much
as $500 million.
Since 2004, corruption has dramatically increased, with the plunder of state
assets and land grabbing by government officials and their cronies occurring on
a larger and larger scale.
Therefore, the above stimulus package could be financed by a reduction in
government corruption.
Besides, international financial institutions such as the World Bank, the Asian
Development Bank and the International Monetary Fund, and major donor countries
such as Japan, have stated that they have set aside funds to help poor
countries cope with the world crisis. But countries like Cambodia must first
devise a concrete contingency plan and ask for help in a responsible way.
In the current context dominated by the world crisis, Cambodia needs a
significant and thoroughly planned stimulus package whatever the name we give
to the series of fiscal and monetary measures aimed at boosting economic
activity.
All Cambodia's neighboring countries including China, India, Indonesia,
Malaysia, Thailand and Vietnam, have already released their first economic
stimulus packages and are preparing new ones in the face of the intensity and
the possible duration of the crisis.
Cambodia cannot afford to have leaders who ignore that we are facing an
emergency situation that requires prompt and adequate measures. It's very
worrying to see our government taking lightly the people's sufferings and
distress while having no credible plan for the future. Through a significant
stimulus package that comes on top of the already known budget for 2009, any
responsible government would implement a number of projects such as:
- Setting up mechanisms to support and stabilize agricultural prices in order
to protect farmers' revenue and living conditions
- Investing in human resources by increasing spending on education, training
and health
- Building infrastructure 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 including road
tolls and the electricity price
- Special social allowances for the poorest segment of the population
- Loans with reduced (lowest possible) interest rates for small domestic
entrepreneurs and the needy.
The objectives of the above measures are two-fold:
- In the short term, protect revenue and create jobs by boosting aggregate
demand through an increase in public and private expenditures triggering the
multiplier effect;
- In the longer term, lay the foundations and create the conditions for a
sustainable and equitable development.
Sam Rainsy
Member of Parliament
Former Finance Minister
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