Cambodia’s leading business chambers and associations have penned a joint letter this week, addressed to Kith Meng, President of Cambodia Chamber of Commerce (CCC) , and readdressed to the Minister of Finance, requesting coordination and support for intervening measures to ensure businesses can continue to operate during and post the COVID-19 pandemic.
The letter, dated April 24, outlines that without more support, widespread closure of businesses will occur and push many into “crushing debt and poverty”, undoing numerous years of prosperity and outstanding economic growth that Cambodia has achieved so far.
Cash flow has been identified as one of the biggest concerns for the private sector, as constraints on supply and demand has “decimated revenues and reserves”, resulting in many with the inability to pay salaries, rent, utilities and taxes causing a “huge knock-on effect throughout supply chains and the wider economy”.
Landlords have also been singled out to help struggling tenants by reducing rents and not “destroy the ability for a rapid recovery post the COVID-19 pandemic”.
A suggested response by the Cambodian Government is a preferential and collateral-free working capital local scheme, making loans available for up to three months of a company’s 2019 revenue or two years of a company’s salary expenses. Companies should commit to at least 50 percent of their employees on the payroll, while loan payments would not be necessary in the first year but would need to be paid, in full, within six years.
In addition, the private sector has requested the National Social Security Fund and Seniority Payment to be exempt for 2020 and 2021 in all sectors experiencing hardship and to also expand the National Bank of Cambodia’s loan restructuring programme to include all sectors in the economy.
Discussing the current situation, Sin Chanthy, president of the Cambodia Logistics Association (CLA), told Khmer Times that at present, freight and cargo transport has dropped from 100 containers per day to around 20 to 30 containers.
“If the situation continues without a solution, starting from May to July, the logistic companies will have to cut salaries by 50 percent, and will have redundancies if the situation gets worse,” Chanthy said.
“Government facilities need to run more efficiently for both the export and import procedures, they should also look at the fees for ports, electricity and water,” he added. However, currently, there are no construction materials or agriculture products and electronics to export or import; there is only processed food for daily consumption,” Chanthy added.
Lim Heng, vice president of the Cambodia Chamber of Commerce (CCC), said the president of the CCC, Kith Meng, met with the Deputy Prime Minister and Minister of Economy and Finance, Aun Pornmonirath, yesterday and will assist to find solutions for the government to help the private sector. “Now the government has accepted the request for help, we hope that they can solve it in time. So far, there have been no companies that have received preferential loans from any finance organisations. The banks are also waiting for a subsidy from the government,” Mr Heng added.