NBC’s Director-General has said that agriculture could potentially contribute to Cambodia’s economic growth as the workforce in the sector continues to increase while productivity remains high.
In a phone interview on CNBC’s Street Signs Asia about shedding light on Cambodia’s measures to address COVID-19 last week, Chea Serey, director general of the National Bank of Cambodia (NBC), said that regarding the virus, the impact on the workforce in Cambodia remains small because of the measures taken promptly by the government to curb its impact.
Moreover, she said the sector that will contribute to Cambodia’s economic growth could potentially be agriculture because the workforce in this sector is continuing to increase while productivity remains high.Chea noted agriculture, a long-overlooked sector, will be a big hit during this time. Everyone eats regardless of the economic cycle and returning migrant workers will hopefully contribute more to this industry pillar. The government’s action in balancing public health and the livelihoods of those mostly in the informal sector has been commendable.
She added that the banks were told to prepare and the government would also prepare measures to cope with the loss of jobs for factory workers, so the NBC was prepared for that, but it did not expect the hit on the tourism sector. “As you may know, the government has put in place a $2 billion stimulus package to try to revive the economy,” said Chea.
The NBC chief added that the central bank also had cut reserve requirements from 12.5 percent on US dollar deposits to 7 percent and for riels from 8 to 7 percent to give banks more liquidity. “We have also asked banks to restructure their loan portfolios,” said Chea.“Now, looking at the situation we are in, I think the banking system is well-capitalised, with the liquidity situation elsewhere at the end of the year. After that we will see what more can be done,” she added.
Chea noted that the economic recovery of China is a good sign for Cambodia and, in addition to this, what we have also foreseen is that the migrant workers from Thailand are low-skilled people.
“I think the agriculture sector would be a great benefit for them when they come back to the country. I have always promoted the agriculture sector because everyone will need to eat regardless of the economic cycle. It is one of the main pillars of the economy,” she added.
Hong Vannak, a business researcher at the Royal Academy of Cambodia and one of several experts in the region, told Khmer Times that if we take a look at the situation, agriculture plays a crucial role in boosting the Kingdom’s economy, especially during the hard blow from the Coronavirus pandemic. Therefore, the govern- ment has to establish a priority sector to push the economy.
“The government’s policy is out there, but the actual implementation has yet to be completed compre- hensively in the agriculture sector, either by the government, private sector or farmers. Mostly, we just hear theories,” he added.
“If we take the agriculture as the base for pushing the economy,
we must make sure that they [government bodies] have detailed plans, policies and mechanisms from the theoretical to actual implementation and must respond to the current situation, especially for the Cambodian migrant workers returning from Thailand who do not have jobs,” Hong said.
“First there must be public policy and then financing to support farmers from the public and private sectors and ensure good prices in the market for farmers,” he added.
Hong said that the Ministry of Agriculture is to lead a special meeting with relevant stakeholders, the private sector, financial institutions and communities
to resolve these issues to boost agriculture to develop the economy and ensure local employment.
“We have to define a clear policy and the Ministry of Agriculture must lead this policy aggressively and collaborate with the relevant stakeholders and authorities how to determine the potential products, the total area of cultivated land and market demand,” he added.
Srey Vuthy, spokesman for the Ministry of Agriculture, Forestry and Fisheries, told Khmer Times that, by the end of this week, the ministry will arrange the meeting to check and make an assessment of the measures the ministry has rolled out.
Srey added that the agriculture sector offers huge opportunities and potential to help the economy especially while Cambodia is facing the Coronavirus pandemic. He added that Cambodian migrant workers from Thailand will join the upcoming rainy season agriculture production with the locals in different communities.
“To push this work, the ministry has issued guidelines to the relevant agriculture departments, experts and provincial agriculture departments to push growing crops, raising livestock and aquatic farming that is suitable for their locations,” Srey said. “Agricultural production will actively start when the early rainy season starts,” he noted.