[Fwd: The kingdom ticking on Chinese time]

26 Jan 2009
By Ky Soklim
Cambodge Soir Hebdo
Translated from French by Tola Ek
Click here to read the article in French
<http://www.cambodgesoir.info/content.php?itemid=35388&p=>

A city with empty streets, empty schools, absent civil servants, this is
the atmosphere in Cambodia during the Chinese New Year which is
celebrated on 26 January, in spite of the fact that this date is not an
official holiday. Even with the presence of a strong Sino-Khmer
community, one has to note that even "middle-class Cambodians" follow
the Chinese custom.

An anonymous civil servant from the ministry of Education claims that
20% of the personnel from his department came to work late on Monday 26
January. However, the remaining 80% of the workers are still absent from
their work. "I came to the office, but I cannot do anything. So, I will
return home," the man said.

According to observers of the Cambodian society, China's influence is
taking a stronger grip on the country, in all fields, from the economy
to politics, to culture. For example, between 2003 and 2008, China
became the top investor in Cambodia. In the tourism sector, China brings
in about one fifth of foreign visitors, number wise. Chinese diplomatic
and political influence also carries a stronger weight as China is
becoming the top bilateral aid donor. China recently financed the
construction of the building housing the Council of Ministers at a cost
of $30 million.

As for language, an estimate of 700,000 people, both Cambodians and
Sino-Khmers, are studying Chinese.

Inflation falls for December

The Phnom Penh Post
Written by Hor Hab and Chun Sophal
Wednesday, 14 January 2009

Lower petrol prices, increase in agricultural production contributed
to lower inflation, with consumer price index down by two percentage
points

Lower fuel prices and a strong harvest are leading to lower inflation
in Cambodia. The government expects inflation to fall to nine percent
as lower crude costs translate into savings at the pump. Cambodia's
inflation rate dropped to 13.46 percent in December 2008, down more
than two percentage points compared with November's 15.74 percent,
according to a government report released Tuesday.

Minister of Planning Chhay Than told the Post that falling petrol
prices, a strong harvest and better fish catches were the main factors
behind the drop.

"We think that inflation will decline further this January because the
local food supply has been increasing," he said.
The major group index for food, beverages and tobacco fell 2.06
percent in December, and the index for the food sub-group decreased
2.23 percent on lower rice, pork, chicken, beef, fresh fish and leafy
vegetable prices, according to the monthly consumer price index report
by the National Institute of Statistics (NIS), a division of the
Planning Ministry.

Price increases were recorded for cigarettes, which rose 3.16 percent;
clothing and footwear, up 0.09 percent; and housing and utilities, up
0.57 percent, the report said.

The report is welcome news for a country that faced more than 30
percent inflation in the middle of 2008.
"Inflation is no longer a big problem in Cambodia, and lower prices
will begin to benefit producers and consumers," said Chan Sophal,
president of the Cambodia Economic Association.

He said that a strong harvest had flooded the markets with
inexpensive products, which helped to drive down prices.
Lower petrol prices had been the major factor behind the price drops, he said.

"An inflation rate of over 10 percent is high in terms of the
macroeconomy, but it is not a problem in our country because we are
[commodities] producers," said Chan Sophal.

However, he said that a healthy rate of inflation is needed to keep
the public spending.

More drops expected
Since October, Hang Chuon Naron, secretary general of the Ministry of
Economy and Finance, predicted that inflation will drop to nine
percent in early 2009 if crude oil stays below US$70 per barrel.
International crude is currently at $37.22 per barrel.

Yim Sovann, Sam Rainsy Party lawmaker, said falling growth in national
income means that inflation is still eating into wages and savings.

"It can be good for the standard of living if inflation is double
digits and the economic growth rate is higher, but if economic growth
is five or six percent and the inflation rate is 13 percent, people
will be worse off," said Yim Sovann.
"Inflation should be below the economic growth rate," he added.

The consumer price index fell 1.96 percent in the fourth quarter of
2008, on the back of a 1.78 percent increase in the third quarter. For
the year, the index increased 19.69 percent in 2008, up from a 5.85
percent increase in 2007 and 4.71 percent in 2006, according to the
December price index report.

A separate commodities report by the Ministry of Commerce's Trade
Promotion Department recorded lower prices almost across the board.

Steel prices were down the most at 89.56 percent, according to the
January 6 report.
Some agricultural goods increased sharply, according to the report.

Bananas were up 30 percent, pineapples 25 percent, oranges 15 percent
and cucumbers 14 percent.
Global inflation has been dropping, largely due to falling oil prices
and a slower economy.

Spending down as land sales fall

Wednesday, 10 December 2008
Written by Soeun Say
The Phnom Penh Post

Businesses feeling crunch as fewer land sales mean fewer new rich with
money to burn

THE end of Cambodia's property boom is increasingly being being felt
across the economy as a downturn in land sales means fewer newly-rich
Cambodians hit the capital with money to spend.

Sam An, 43, who runs a private automobile dealership on Phnom Penh's
Monivong Boulevard, said his sales have declined by up to 50 percent
over the last six months from a peak during the building boom of 2006,
2007 and the early part of 2008.

"Many of our buyers made a lot of money from selling land and came to
buy cars here," he said. "Now they are so quiet."

Sok Narin, 28, said he used to make a handsome profit from selling
Suzuki motorbikes from his private dealership in 7 Makara district to
people arriving from the provinces with cash in hand.

"At this time last year I sold between four and five motorbikes per day,
but now my business is very quiet," he said. "I think that this is
because the property market is not good."

Cambodia's sole Toyota distributor, TTHK Co Ltd, told the Post last
month that it has sold only 1,200 vehicles this year, well short of the
2,000 previously anticipated, after sales plummeted almost 50 percent
since May.

RM Asia Co Ltd, the country's second-largest automobile importer, said
sales of Ford vehicles have declined about 10 percent within the last
few months.

Va Teang, 35, who owns a gold shop at Pochentong Market in Phnom Penh,
said her income has dropped 50 percent because of the real estate market
slowdown.

Mel Trea, 72, a farmer-turned-land speculator from Prakar village in the
outskirts of Phnom Penh, said the land boom had made him rich over the
past five years.

"I never thought that I would have a great chance like this," he said.

"I earned a lot of money from land I sold during 2006 and 2007 when the
land was fetching very high prices. If I had bought land for $1,000 per
hectare I sold it at $10,000 per hectare; if I bought at $10,000 I sold
at $100,000."

With the proceeds, he built a villa for his family and bought cars and
motorcycles. With few buyers around, his wealth is locked up in his
remaining land bank and his spending money has dried up.

"Now, the property market is very quiet," he said. "It's not like the
last few years when I was very busy speculating."

Kang Chandararot, president of the Cambodia Institute of Development
Study, said it was inevitable that the slowdown in real estate sales
would be felt throughout the economy.

"The world economic crisis has already affected the real estate market
in Cambodia," he said. "If the real estate market collapses, it can make
life difficult for other people doing businesses in Cambodia, especially
car and motorbike sellers."

Ngy Tayi, undersecretary of state at the Ministry of Economy and Finance
said the government was considering how it could intervene to boost the
sector.

"I can't give you an answer as to what we will do, but I can say the
government is discussing the issue and considering helping them in the
near future," he said.