We are living in real strange times. Every 2nd a person is a Tv-evangelist or a medical expert or a political analyst of sorts
and then you have the in-between that want to fix everyone that is confused
with what is happening in the world. On top of that, we have governments that
really make decisions that only they will know, where they got this from. Some
decisions are sitting real close to insane stupidity but hey, who are we to
complain, we the people need to listen to the authorities.
Listening to a small clip from a friend reminded me
that we can look in the Bible what God did for His people. We do not know the
future but we know what God did, so we must trust Him in what still needs to
come. We are so quick to go on stress levels and we forget that God helped His
people thousands of years ago to overcome the same dilemma that we are facing right
now, uncertain times. I attach a clip in the bottom, hopefully, you can watch
it, please do as this encourages me a lot this morning.
We celebrated Gideon’s 17th birthday today
in fashion. The staff of FGC Cambodia came over and we had some cake to eat and
prayed for our big boy. God is really working in his life although he fights
with God at this time in his life, we know that fighting with God, brings us
closer to Him. Pray for him as he struggles daily with school and the fact that
the school is a Biblical based school. We are so proud of him overcoming all
these obstacles in his life.
Some Covit news. We officially do not have anybody
with Covid-19 at this moment. So we are Zero at this stage but the virus made
its mark in the economy. Everywhere we go, we can see shops closed down and signs
removed or they remodel but not sure for who?
Thank you very much for praying for us. Please tell us
how things are on your side of the Covid.
Love
Rossouw-clan
Cambodia poised to be big Covid-19 loser
Cambodia, despite reporting fewer coronavirus cases
than most of its neighbors, could be among the region’s biggest Covid-19 losers
due to economic and financial contagion effects. The country’s most crucial
business sectors, including tourism and garment manufacturing, have ground to a
virtual halt since the pandemic first emerged in China in January and
thereafter spread worldwide.
Cambodia’s tourism industry, which usually contributes
around one-third of gross domestic product (GDP), is now dead in the water due
to the lack of mainly Chinese tourists, who make up the bulk of visitors. Air
passenger numbers fell by more than 90% in April, according to the State
Secretariat of Civil Aviation, while ticket sales at Cambodia’s world famous
Angkor Wat temples fell by 99.5%.
Cambodia’s other vital sector, apparel manufacturing,
the largest contributor to economic growth, has been hit by a double whammy as
raw material imports dwindled because of virus-caused supply chain problems in
China, and then as Western brands cancelled orders en masse as the pandemic
took hold in Europe and the US. Local media reports from early May say that 180
apparel factories have now suspended operations, and another 60 are thought to
be close to suspension, adversely affecting as many as 150,000 workers.
Labor Ministry Spokesman Heng Sour said in late April
that apparel exports are likely to be down around 60% in the second quarter of
this year compared to 2019. More bad economic news is on the way. An
International Monetary Fund (IMF) worst case scenario forecast made in April
projected a possible economic contraction of 1.7% this year, representing
potentially the first year of negative growth since the late 1980s. Government
officials are looking towards better days. Phay Siphan, the government’s chief
spokesman, asserted last month that Cambodia is heading for a “V-shaped”
recovery, marked a sharp decline this year and followed by an equally sharp
recovery in 2021 and beyond.
Economists, however, say it’s more likely that
Cambodia will experience a so-called “U-shaped” recovery, wherein growth rates
won’t return to pre-crisis levels for several years. Cambodia has been here before. In 2009, amid
the global recession, GDP growth fell to 0.1% compared to 6.7% the previous
year, according to World Bank figures. The economy bounced back quickly the
following year and by 2011 was higher than in 2008.
Not so this time around. In April, the World Bank
forecast that, under a “baseline scenario”, Cambodia’s economy will grow by
just 2.5% this year, the worst since 2009, and then slightly recover
afterwards, with growth of 5.9% in 2021 and 6.3% in 2022.
But that might be optimistic.
Ou Virak, founder of the local Future Forum think
tank, reckons that many economic forecasts, including those made by the World
Bank and the Asian Development Bank in March and April, were made “too early”
and probably presented a “much rosier” picture than is the reality. The World
Bank’s forecasts vary significantly – from contraction at worst and decent
growth at best this year – and there is no reason why if the global crisis
continues for longer than projected that Cambodia’s propsects won’t be downgraded
even further.
“I expect a very slow recovery as Phnom Penh realizes
that the country’s economy doesn’t have a leg to stand on. Garments, tourism,
and construction are basically decimated. Even the Chinese can’t save Phnom
Penh,” said Sophal Ear, associate professor of diplomacy and world affairs at
Occidental College at Los Angeles.
The health crisis has been relatively moderate in
Cambodia, with zero confirmed deaths so far and authorities claiming no new
recorded Covid-19 cases since April 13, which may or may not be true. But as an
export-driven economy, Cambodia’s recovery depends on what happens worldwide.
Indeed, Cambodia’s economy won’t begin to return to normal until the economies
of China, Europe and the US return to normalcy.
The first big question for Cambodia concerns how
quickly the tourism sector can recover, which depends largely on how soon
Chinese tourists resume travelling outside of China. “When the Chinese
government allows its people to go out or resume their flights, we think there
will be a big flow of Chinese tourists to Cambodia,” Tourism Minister Thong
Khon optimistically predicted in late April, according to local media reports.
The local Khmer Times newspaper quoted industry
experts saying this week that they don’t expect the tourism sector to recover
until at least next year. Many tourism-related businesses, meanwhile, are going
under, reports say. Banruptcies could rise even further considering the
delicate state of the microfinance industry.
An estimated 2.6 million Cambodians have outstanding
microfinance loans worth more than $10 billion collectively, according to
figures from the Cambodia Microfinance Association quoted in media reports. Cambodia
reportedly has the highest microloan debt per borrower rate in the world at
around US$3,804, representing more than twice Cambodia’s GDP per capita.
Anecdotal reports suggest many Cambodians are already
selling off assets like land, vehicles and gold to ensure they have enough
money to meet basic expenses in the months ahead. Many are doing so just to
keep up with debt repayments; several others are already falling behind. There
have already been several protests outside micro-finance institutions (MFIs) at
which borrowers have called for a suspension of their loan repayments.
Human rights activist Hun Vannak and several other
demonstrators were arrested last weekend for protesting in Battambang province
outside of the offices of PRASAC and AMK, two of Cambodia’s largest MFIs. The National Bank of Cambodia has asked MFIs
and banks to offer loan deferments on a case-by-case basis. Prime Minister Hun
Sen has suggested the same.
But a statement by 135 civil society groups in late
April called on the government to “ensure that MFIs immediately suspend all
loan repayments as well as interest accrual on loans for at least three months
and return the millions of land titles currently held as collateral by MFIs to
their owners.” But many microfinance lenders, as well as formal banks, argue
they cannot accept delayed payments from all clients and warn that a blanket
amnesty would endanger the financial sector longer-term if it prompts a rise of
non-payment or over-indebtedness.
Some analysts thus now expect a major finance system shock
later in the year, as economic weakness in other sectors transmits to small
businesses and households. The Cambodian government does have some agency. Like
elsewhere, Cambodia has implemented various Covid-19 relief measures, including
tax holidays for companies in select sectors and pay guarantees for affected
workers.
But Hun Sen has been forthright in saying his
government cannot afford to bail out the economy. In April, his government
vowed to provide $70 per month to laid off garment workers, representing about
40% of the national minimum wage. Yet months earlier his government said it
would pay $114 per worker per month, a figure it has since downgraded most
likely because it underestimated the scale of the problem. So far more than
100,000 garment workers are thought to have been at least temporarily laid off.
Analysts believe Hun Sen’s government will need to dig
deeper to avoid a worst case scenario of thrusting hundreds of thousands into
unemployed poverty. But analysts are already skeptical that his government has
the wherewithal to set aside the $2 billion in Covid-19 crisis funds it claimed
to have done in March.
Sophal Ear, for one, doubts the government has the
financial resources it says it does, especially since Hun Sen instructed
ministers and government-aligned tycoons to contribute to a national “disaster
fund.”
“It isn’t there…it’s all pretend money” Sophal Ear
said, referring to the government’s emergency reserve claims. Ou Virak said
there has “not been a lot of openness about the impact of Covid-19”. But, he
noted, the ruling Cambodian People’s Party (CPP) is for now “riding popular
support” as many see the government’s response as credible.
The crisis has been something of “a blessing for Hun
Sen in terms of popular support,” he added. Whether that lasts when the health
crisis becomes an economic and financial one, however, is yet to be seen. https://asiatimes.com/2020/05/cambodia-poised-to-be-big-covid-19-loser/?fbclid=IwAR3wm5QyIzfmLu2JmsrKMxaCkRu506h7XWvH5SsEGkbSg515r3IvznkdkJM
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