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Cambodia’s political and economic response to COVID-19

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KADAL, CAMBODIA- Foundations delivered more than 100 aid packages including rice, face masks and cash to Vietnamese-Cambodian families affected by COVID-19 in Kadal province, Cambodia, 16 April 2020 (Reuters via Nguyn V Hùng/VNA/ Latin America News Agency).

In Brief

The COVID-19 pandemic is a crisis like no other. It has disrupted social and economic activities worldwide — causing a global recession and government defaults among developing nations. Countries in Southeast Asia are being severely impacted. In Cambodia, when the first confirmed case of COVID-19 was reported in late January, the disease became a major social, political and economic risk. As of 8 May, there have been 122 reported cases. The daily infection count has slowed since the beginning of April. It appears that the curve has flattened. But is it for good?

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A crisis can make or break a leader. Faced with a pandemic crisis, the government’s ability to respond quickly and effectively to emerging social risks, political challenges and economic difficulties is being assessed.

After the government approved the draft of the Law in the State of Emergency on 31 March, the National Assembly approved it on 9 April. The draft was reviewed by the Senate and approved on 17 April. But is it necessary for Cambodia to have such a law?

The proposed law has drawn criticism from civil society groups over fears that government restrictions on civil and political liberties, human rights and media freedom violate the rule of law. Some have called the move a recipe for dictatorship as it gives the government sweeping powers to arrest and imprison people for up to 10 years and a monetary fine of up to 1 billion riel (approximately US$245,000). But to many, the law allows the government to mobilise resources and take necessary response measures to ‘protect public order, security, people’s interests, lives, health, property and the environment’.

According to the government, having the emergency law is a necessary to enforce a state of emergency, despite Article 22 of the nation’s Constitution. The likelihood of declaring the law, as Prime Minister Hun Sen claimed, is barely ‘0.1 per cent’.

Yet, over the past two months, the government’s crackdown on fake news and misinformation — on social media, in particular — has led to the arrest of reporters and journalists on allegations of inciting social unrest and promoting misinformation. Numerous condemnations of state crackdowns on civil rights have been denied by the government.

There have also been travel restrictions, including a one-month inbound travel restriction for foreigners and one-week domestic travel restriction announced days before the cancelled Khmer New Year (KNY) over 13–16 April. The cancellations of the KNY holidays was, according to the government, to prevent the risk of cluster infections from large gatherings. Some have questioned a further measure by the Ministry of Labour and Vocational Training announced on 9 April that asked garment workers not to take leave during the KNY holidays — warning that they would not receive paid leave pay, but instead receive a 14-day quarantine period. Yet, leaders of 17 labour unions welcomed the move and urged workers and factories to cooperate in the fight against the pandemic.

As the pandemic depresses Cambodia’s export-oriented sectors and small and medium enterprises (SMEs), the Cambodian economy is faltering. Tourism — which contributed nearly 33 per cent of gross domestic product in 2018 — has sharply declined, with a decline in tourist numbers of about 80 per cent over February–March. With the US and European economies are being shaken by COVID-19, the demand for Cambodian exports has shrunk. The downward effects have seen 91 garment factory suspensions, with around 61,500 workers affected so far. Ministry of Labour spokesperson Heng Sour said on 27 April that a total of 130 factories have applied for operational suspensions and as many as 100,000 garment workers would be losing their jobs to the pandemic. Some have feared that up to 500,000 jobs in the garment and footwear sectors could be affected as orders are cancelled.

The Cambodian government announced that it will pay US$40 (roughly 20 per cent of the US$190 monthly minimum wage) — to laid-off garment workers with another US$30 to be paid by factory owners. While the government has announced a 6-month stimulus package of US$800 million beginning in April to rescue affected businesses and a total of US$2 billion if the pandemic lasts a year or longer, no one is certain to what extent the economic stimulus packages will be able to speed up economic recovery.

Cambodia’s own limited budget will not be sufficient to execute large-scale response measures. The government has relied on US$20 million of World Bank credit, as well as donations of medical supplies and protective equipment from China, Japan and Vietnam, with Germany, Russia, the United States, and the European Union also pledging support to fight the spread of the virus. The World Health Organization has advised Cambodia to scale up preparedness and response capabilities in case of a massive outbreak.

Following Prime Minister Hun Sen’s announcement on 1 April to donate seven-months worth of his salary (around US$17,000), other officials have followed suit. On 14 April, a special ASEAN+3 summit on COVID-19 was also conducted via videoconference. In a joint statement, it called for cooperation on early-warning systems for pandemics and disease outbreaks, the securing of adequate financing and the exchanging of best practices in the joint fight against COVID-19. This pandemic is proving itself to be a hard test of national leadership and international solidarity.

Kimlong Chheng is Director of the Centre for Governance Innovation and Democracy at the Asian Vision Institute, Phnom Penh. He holds a PhD in Economics from the Crawford School of Public Policy, The Australian National University.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.

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