Minister of Economy and Finance Aun Pornmoniroth has called for the private sectors and government to work hand-in-hand in order to sustain the Kingdom’s economic growth as the Covid-19 pandemic grips worldwide economy, and disrupts production and global demand.
Pornmoniroth said shrinking regional and global growth, coupled with travel restrictions and limited effective measures implemented in response to the outbreak threaten the survival of businesses in the Kingdom’s key sectors.
“The government has always regarded the private sector as a key engine for economic growth and job creation. In the context of the Covid-19 spread, the government and the private sector are facing common challenges and must continue to promote social and economic sustainability,” he added.
Cambodia Chamber of Commerce vice-president Lim Heng commented that in response to the crisis, the government has taken a proactive approach to support affected sectors such as garments, tourism, and transport as well as small and medium-sized enterprises (SMEs). The government has issued three rounds of intervention measures to prop up the private sector such as tax exemptions aimed at pandemic-hit sectors which is a greater help during this tough time.
In mid-March, a fiscal stimulus plan of USD800 million to USD2 billion, equivalent to seven per cent of the gross domestic product (GDP), was announced to ease the overarching effects of the coronavirus for six months to a year.
Fully state-owned Small and Medium Enterprise Bank of Cambodia (SME Bank) launched with initial capital of USD100 million to provide financing for SMEs. The state-owned Agricultural and Rural Development Bank (ARDB) launched a USD 50 million fund to increase access to credit for SMEs in the local agricultural sector.
In April, Prime Minister Hun Sen announced that all workers suspended by the factories would receive USD70 per month. (USD 30 from the employer and USD 40 from the government).
Pornmoniroth said the government’s three rounds of support measures will help affected key-sector companies and factories preserve their business structure and continue operations. Private sector and government need to continue working closely together and prepare to seize new opportunities which may arise during or post-Covid-19. In additional, he mentioned that all input from the private sector will be taken into consideration for the next stimulus package.
A recent simulation done by Asian Development Bank (ADB) revealed that several months of travelling ban and a sharp decline in domestic demand due to the outbreak, Cambodia could face 1.15 per cent impact to its total GDP amounting to USD 283.3 million. If the outbreak pro-long for six months, up to USD 711.4 million could hived off the GDP.