PM: Cambodian economy in good shape despite global financial crisis

Special Report:Global Financial Crisis

PHNOM PENH, Feb. 5 (Chinese media) -- The Cambodian economy is in good shape, though it has been affected by the global financial crisis, Prime Minister Hun Sen told the Third Cambodia Economic Forum hereon Thursday.

"We have succeeded in securing peace, political stability, security and social order, while promoting macro-economic stability and international integration. We have been successful in developing our infrastructures as well as improving governance structure," he said.

The economic growth has been robust, averaging at 9.4 percent during the last decade and 10.2 percent in 2007, he said, adding that this helped reduce poverty by one percent per annum from 47 percent in 1994 to 30 percent in 2007.

"Despite the global economic downturn, the Cambodian economy is estimated to grow by seven percent in 2008 and the government will try to maintain a six percent growth in 2009," he said.

Cambodia's banking system remains strong in general, well capitalized and highly liquid, he said, adding that bank loans and deposits continued to grow in 2008, reflecting public confidence in the banking system.

"Our international reserves position has been favorable and was doubled during the last two and half years, from one billion U.S. dollars years ago to two billion U.S. dollars in 2008," he said.

Meanwhile, the progress in agriculture has been historically impressive and "we managed to increase rice yield up to 2.65 tons per hectare in 2008", from 2.5 tons per hectare in 2005, he said.

"There is still room for yields improvement by making investment in physical infrastructures, especially irrigation system, increasing agriculture productivity, and promoting agricultural diversification," he added.

In addition, the garment sector is now in good standing to compete in the world market, with its improved labor standards, he said.

"By further strengthening this competitiveness together with the government's on-going measures to implement trade facilitation and promote investment, we will be able to further enhance the attractiveness and competitive advantage of Cambodia in term of promoting and diversifying exports," he added.

Also, tourism is a great potential for development and remains generally strong, he said.

Hence the building of more physical infrastructure, improving legal framework and institutions capacity, developing human resources, tourism market diversification as well as the promotion of attractive tourism package based on the need to maintain strong political stability, safety, peace and social order will open more opportunities for this sector, he added.

The Third Cambodia Economic Forum was organized by the Supreme National Economic Council (SNEC) with the assistance of the United Nations Development Program (UNDP) to focus on competitiveness enhancement and poverty reduction in face of the current global economic crisis.