As Cambodia continues to
battle through a difficult year, peppered with the fallout from the COVID-19
pandemic, the Everything-but-Arms
partial withdrawal and disasters like the floods and a building
collapse, there appears to be a rainbow on the horizon of next year.
The promise of a vaccine
being available at least by April is expected to ease pressures on economies,
including the Kingdom’s. The election of Joe Biden as the next US president
also offers a glimmer of hope because he is expected to reverse some of the
policies of the current administration, perhaps including the easing of
sanctions imposed on Cambodia over perceived human rights violations.
Kin Phea, director-
general of International Relations Institute of Cambodia at the Royal Academy
of Cambodia, said he hoped things would turn for the better if a coronavirus
vaccine is available and COVID-19 no longer poses a threat.
“Then, tourists will
return to Cambodia and tourism will be restored,” he said.
He said that since Donald
Trump’s administration had caused problems with its allies and tense relations
with Cambodia, he believed Joe Biden’s presidency would ease such tensions and
it could also improve the situation in Cambodia.
However, he said he still
pinned his hope on the economic relation between Cambodia and China which could
help improve Cambodia’s economy.
“I think the trade
agreement with China will help,” Phea said.
Ath Thorn, President of
Coalition of Cambodian Apparel Workers Democratic Union (CCAWDU), said the
impact caused by EBA suspension and COVID-19 has been severe for workers in
Cambodia.
“The size of the
suspension of jobs is huge and the size of the closure of companies is also
huge and the loss of jobs is also huge,” he said.
Thorn said when the EBA
suspension started around 491 companies were suspended and some 290,000 workers
affected. Currently, he added that there are only 69 suspended companies,
affecting some 200,000 workers.
He said more than 130
companies have been closed, affecting nearly 50,000 workers.
For the tourism industry,
he said almost all hotels had been closed since February and March.
“Only around 20 or 30
percent of hotels are still open to serve local tourists,” he said.
Thorn said the transport
sector, including the Phnom Penh International Airport has also been affected
as some transport companies are suspended or closed down.
“Only the agricultural
sector has been least affected when COVID-19 started,” he said.
Nevertheless, Thorn said
he hoped the future would be brighter for Cambodia after a dark year.
“2020 has been the worst
year,” he said. “As I see, though COVID-19 may still be around next year half
of [the bad] situation may be mitigated. [The impact] from EBA is not too
serious as exports could be expanded to the US.”
“But, we cannot correctly
forecast if the second wave of [COVID-19] is too big and if US foreign policy
will change,” he concludes.
Sok Eysan, spokesman for
the Cambodian People’s Party (CPP), said Cambodia had a strategy on trade
diversification by dealing with all trade partners, including Western
countries.
“Recently, we have
exported hundreds of thousands of tonnes of rice to Vietnam,” he said, adding
that Cambodia also has trade agreements with China for thousands of different
agricultural and industrial products.
“We still export goods to
Europe, but we only pay more tax,” he said. “We still export rice to the EU.”
The spokesman said
Cambodia had seriously been affected by COVID-19 but not as bad as other
countries in Europe and North America.
“The US has already had
more than 10 million infections,” he said, “and more than 200,000 people have
already died, compared to Cambodia, where just over 300 people have been
infected and there have been no deaths.”
Eysan also said the EBA
suspension by the EU had not affected Cambodia much and that the government had
managed to deal with the issues.
“Let’s consider this
force majeure,” he emphasised, referring to COVID-19 and the flash floods in
Cambodia.
Though he was not sure
how serious the floods had affected Cambodia’s economy, the spokesman said the
government has distributed donations to people who have been affected by floods
nationwide in addition to fixing the damaged road infrastructures.
“In Pursat and Battambang
provinces, we have distributed rice seeds to thousands of families [whose rice
fields] have been damaged by floods so that they can continue rice farming and
restore our national economy,” he said.
Eysan said he was also
hopeful that everything would become normal again for Cambodia in the near
future.
“God always helps us,” he
said, “God always takes care of us. After one disaster, we are always able to
fix it.”
However, Moeun Tola,
Executive Director of the Centre for Alliance of Labour and Human Rights
(CENTRAL), disagreed with the positive prediction for 2021 and said the future
may still be bleak for Cambodia.
“For me, I still have not
seen the light, because of a few reasons,” he said.
First, he said, the
situation of COVID-19 was still hanging around and that the coronavirus had
already hit the second wave in Europe.
“We are not sure if
[transmission] in Cambodia will spread to the communities,” he said. “We are
still monitoring and the Health Ministry keeps alerting us all the time.”
Second, he said, the
world economy had been seriously affected by COVID-19, especially countries
that had bought products from Cambodia.
“Even if COVID-19 tames
down, I’m not sure European and American people will come in flocks to buy
clothes,” he said. “Therefore, they will prioritise their spending. They may not
spend money on shoes or clothes, because COVID-19 has affected the economy of
the world, the economy of a nation and the economy of a family.”
Tola said there would be
no orders of clothes from Cambodia if nobody will buy them.
Third, he said among three
markets, including Europe, the US and China, the market in China seemed to have
dropped in buying Cambodian products.
“The Chinese market does
not buy clothes, but they buy agricultural products like mangoes and bananas,”
Tola said. “But, it has also decreased during COVID-19.”
Meanwhile, he said
democracy and human rights would remain an issue for the US and Europe and that
the export of products from Cambodia would still be tied to the two issues.
Sophal Ear, associate
professor of Diplomacy and World Affairs at Occidental College in Los Angeles,
said the suspension of 20 percent of Cambodia’s EBA exports to the EU would
have been significant, but that it was little compared to COVID-19 devastating
Cambodia’s economy.
“The impact [of the EBA
suspension] has not been nearly as severe as COVID-19,” he said, “It’s made a
bad situation worse.”
Sophal said tourism has
basically been devastated due to COVID-19 and it has been compounded by the
loss of EBA status.
“The only silver lining
seems to be bicycles because people are riding more bikes during COVID-19, so
Cambodia hit production of 1.5 million bikes,” he explained. “But, how many of
that is truly manufactured in Cambodia as opposed to transshipped under a Made
in Cambodia label?”
Regarding the recent
flash floods, Sophal said it had been bad for the non-export domestic economy
as people lost assets like homes and possessions in addition to the road and
infrastructure damage.
“This is like your
savings account being drained. People in the affected flood areas suffered the
most,” he said, “But transportation networks too, so anything requiring those
roads.”
In terms of economic
impacts, Sophal said the overall toll is -5.5 percent GDP, but that it has been
revised downward to -4%.
“So by that number,
assuming $27 billion, that’s $1.08 billion lost,” he said.
Sophal, who is also the
author of Aid Dependence in Cambodia, said the international community could
help by promoting more diversification in the Cambodian economy, including
liberalisation and less gatekeeping by big businesses in Cambodia.
“Diversification is just
good strategy even if, right now, China’s economy is the only one growing,” he
said. “The problem [is that] China doesn’t buy bikes from Cambodia. China needs
to buy what Cambodia makes.”
Nevertheless, as the
president of CCAWDU and the CPP spokesman have mentioned, 2021 for Cambodia can
be as promising as the Khmer saying goes: “After the rain, the sky will be
clear.”