The government has been shaping its economic measures and strategies accordingly as the COVID-19 pandemic wreaks havoc on the global economy.
Permanent Secretary of State at the Ministry of Economy and Finance Vongsey Vissoth said at the press conference, regarding government measures in response to the impact of COVID-19, the pandemic has been unprecedented and caused widespread uncertainty.
“The pandemic has impacted the global economy. Therefore, governments have been making every effort to support and restore their national economy.”
“We have to live with COVID-19. We cannot wait until it ends,” said Vissoth.
“We have prepared measures and delivered an unprecedented response. We are spending a lot of money to maintain the economy, maintain jobs and facilitate its recovery,” he added.
He said the government has done well on three main points during the pandemic.
“Firstly, we have had the strong leadership of Prime Minister Hun Sen, followed by comprehensive and effective policies and measures which have been aided by the participation of the people of Cambodia,” he said.
According to the data from the Ministry of Economy and Finance, the government has spent $10 million on health, economy and social intervention as part of its master plan in the fight against the virus impacts.
Approximately $25 million has been spent on skills and vocational training and sponsorship for laid-off workers.
One hundred million dollars has been spent on aid for workers and $127 million has been spent on poor and vulnerable households.
A further $100 million has been allocated to a special fund with the Agriculture Rural Development Bank and SME Bank of Cambodia.
Finally, $200 million has been spent on credit guarantee funding and $300 million financing facilities.
“The government already prepared measures and formulated a strategy to reduce the impact of the EBA withdrawal. We began preparing in 2013. We have reformed our economy, public financing system and the management of revenue collection. However, we did not prepare the national budget specifically for COVID-19,” Vissoth added.
“We call the national budget the proactive budget and the withdrawal of the EBA has been our opportunity to reform. We have increased the stimulus budget to further our competitiveness, investment on infrastructure, including in logistics, electricity, trade facilitation, skill development, taxation and public services,” he said.
“We have a $600 million stimulus package allocated per year for the next three years,” he added.
Vissoth added the pandemic has yet to slow down. Therefore, the stimulus budget and offensive measures will be used to fight the impact of the virus.
“We have planned both for the offence and defence of our economy. While the global impacts of the pandemic have meant a drop in supply for our nation’s businesses and demand for our products, we must change our strategy to survival mode. In this mode, we will try to stimulate the economy while not allowing the people to die of hunger,” he said.
In the post-COVID-19 period, there are three main driving principles to prepare the strategy, said Vissoth.
He said the government will first identify the new normal, noting that the world after COVID-19 will be different. Vissoth added that the strategy is called Financial Economic Architecture, and will involve slow economic growth, fewer relation activities and more protectionism.
Secondly, he said the supply chain and technology will move from a global level to the regional level and people’s lifestyles will also change alongside new demand, such as in technology.
Thirdly, the government must focus on emerging trends which will give Cambodia the opportunity to move forward post virus, he said.
“Based on the new trends identified and on Cambodia’s strengths, the government will create a strategy,” he said.
He added Cambodia needs to develop its budget and human resources to restore the economy.