Cambodian Prime Minister Hun Sen on Tuesday said the government had set aside between $800 million to $2 billion to cushion the economic blows from the COVID-19 pandemic.
“The government allocates funds based on two scenarios of COVID-19. There will be $800 million for a period of six months and $2 billion if the outbreak lasts a year and longer,” said Hun Sen.
Last week, the Cambodian government announced an allocation of $30 million to finance Cambodia’s screening and monitoring efforts. It also reduced capital expenditures by 50 percent at all ministries and state institutions.
Meas Sok Sensan, a spokesperson of the Ministry of Economy and Finance, said the government had sufficient reserves from healthy economic growth over the years. He added that the reserves would be used to pay workers affected by factory suspensions and for tax breaks for tourism businesses.
“The government has collected higher-than-expected tax revenues over the last five years,” he said. “So, the last five years have seen us save some money that we could use to cope with crises.”
The prime minister’s capital injection appeared to match projections made by the Asian Development Bank on Tuesday for all countries it funds.
The estimates showed the best-case scenario, two months of the outbreak, would cause $283 million in GDP loss. On the other hand, six more months of the viral pandemic would see a $711 million decline in GDP.
A moderate-case loss of $391 million would result in a 1.59 percent drop in GDP growth. By contrast, a hypothetical worst-case scenario, where the outbreak would last more than six months, would see nearly $1 billion in GDP loss.
The development bank factored in drops in Chinese and other tourist arrivals, as well as a fall in income, mainly from Chinese tourists.
The forecasts were made vis-à-vis similar losses during the SARS outbreak and drop in tourism from various travel bans and restrictions across the world.
San Chey, executive director of the Cambodian Social Accountability Alliance, recognized the government’s good intention in allocating emergency funds for the COVID-19 outbreak.
However, he argued that the administration needed an ironclad plan to prevent wastage and scandals linked to the allocated money.
“To prevent any bad scandals with the budget, we have to think of the spending and prepare a specific plan to prevent any irregularities that may occur,” he said.
Angkor Wat. Picture credit: Dean Moriarty from Pixabay
