As the number of unemployed climb day by day and with limited employment opportunities, mounting debts and lack of economic opportunities, Cambodia risks being left behind by its bigger Asean partners.
Bigger nations within Asean such as Singapore, Malaysia, Vietnam have announced measures to re-open their battered economies and businesses with various control measures in place.
However, the same cannot be said for Cambodia as the Ministry of Health is reportedly against suggestions to open up businesses and various sectors for fear for new Covid-19 cases, despite having relatively low numbers of infections and high numbers in people tested per million.
Cambodia risk being sidelined along with Lao PDR and Myanmar by other economies as they open up.
Analysts say that Cambodia must coordinate her efforts and measures with its neighbours so that the entire region can be opened up in sync. Failure to do so and adopting its own measures, no matter how necessary it may appear, could potentially be more devastating than the virus itself.
“Air travel must be encouraged and coordinated, especially inter-Asean travel and flights should be resumed, even if it is limited in number. Businesses such as cinemas, gymnasiums, spa, and others must be allowed to resume.
“Even casinos should be allowed to re-open as these sectors employ tens of thousands of workers who are already facing a squeeze in their wages and soon may be out of jobs if the closure persists with no clear timeline as to when they can be reopened,” a business and tax analyst who declined to be named said.
Another analyst who has often been very vocal in promoting Cambodia as an investment destination said that the current situation in Cambodia is akin to that of a chicken and egg.
“Detractors may argue that why should these businesses be allowed to open when there are no incoming flights to bring foreign travelers who normally patronize casinos and hotels. But then again, how or why should patrons come when they are aware that these establishments are shuttered?
“The formal and informal employment in these sectors runs into more than 100,000 people who have families to feed and loans to pay and being starved out of their income and livelihood for fear of the virus and the supposed second wave is inexplicable, especially if the Ministry of Health is not transparent with its reporting and plans,” the Thai based analyst said.
Investments and business depend on air travel which has already taken a big hit with little respite I sight. Small and medium scale businesses have shut down and cancellations and postponements of public activities will drastically reduce consumer spending in and across countries and bring the volume of spending down.
According to The Wire, It is important to see that the COVID-19 disruptive shock on the global economy as both a supply and demand-side shock. The intersectionality between these two need to be better understood for an effective policy design to be worked out and executed in response.
Why so? If one goes to a cinema theatre, one buys not only a movie ticket to watch a film but also spends money on some popcorn or snacks, or on a meal before or while being at the cinema. Similarly, if a restaurant stops receiving customers (who decide to stay home and eat) is more than likely to shut shop and let go of people it hired for work, the multiplier effect of consumer spending on business investment-employment generation gets affected.
The difficulty in Cambodia is that there are tens of thousands of workers in the informal sector who by virtue of their status, do not qualify to receive state assistance or subsidies. What happens to this sector which runs across the country in almost every sector?
Time will tell.
- Tags: COVID-19 in Cambodia