Camparison of Cambodia and thailand economic

The gross national product (GNP) per capita in Cambodia is US $ 1,266 per year. This figure has been arrived at by a new system of measuring, used by international organizations like the World Bank. Using the old method, the GNP of a country was initially calculated in the national currency and the resulting figure converted into US Dollars at exchange rates prevailing among banks. But who in the world wants Cambodian Riel? The new system of measuring works differently. Percapita GNP is not expressed in currency, but in buying potential. This means: the accumulated percapita GNP in Cambodia equals a buying potential sufficient for a certain amount of rice, meat, washing powder, etc. The US dollar figure expresses what the same basket of goods would cost in the US, or in worldwide average. While average percapita GNP in Cambodia is US $ 1,266, it is US $ 5,665 in Thailand; in Vietnam it is lower than in Cambodia, US $ 1,263. In Afghanistan it is even lower at US $ 760, and in Burma it's a meagre US $ 676 per year barely more than half of the Cambodian figure. This does not necessarily mean that the average Cambodian is economically better off than the average Vietnamese. For in Cambodia, a substantial part of percapita GNP is still spent for war material. Today's Cambodians also start business at a lower level of percapita property, and furthermore, a substantial part of accumulated GNP is destroyed again and again by actions of war. The distribution of income may also be less equal in Cambodia than in Vietnam. Fact is, the average Cambodian seems to be worse off than the average Vietnamese. A relevant point of reference here average life expectancy and medical provision rather than percapita GNP. Percapita GNP, however, is a reference point for the natural resources of a country. Cambodia need not be a poor country, as shown by percapita GNP created under strenuous conditions. Cambodia owns large forests of the most precious woods and the most productive gem mines of the world (except diamonds). Much of the country is a fertile plain nurtured by one of the most powerful rivers of Asia, the Mekong. In fact, Cambodia could be a rich country. Its preconditions are several times better than those of Ethiopia, Turkey, Peru, Egypt, Afghanistan or Iraq. Though, in the absence of sufficient political stability, the economic growth potential cannot be realized. Therefore, percapita GNP in Cambodia, based on buying potential, amounts to only US $ 1,266 per annum, while in Thailand it is US $ 5,665, in the Philippines US $ 2,440 and in China US $ 2,413. In comparison: percapita GNP, based on buying potential, is US $ 20,165 in Germany, and $ 22,595 in the US. Additional, editorially modified, material from Wikipedia: Final economic indicators for 2007 are not yet available. 2006 GDP was $7.265 billion (per capita GDP $513), with annual growth of 10.8%. Estimates for 2007 are for a GDP of $8.251 billion (per capita $571) and annual growth of 8.5%). Inflation for 2006 was 2.6%, and the current estimate for final 2007 inflation is 6.2%. Per capita income is rapidly increasing, but is low compared with other countries in the region. Most rural households depend on agriculture and its related sub-sectors. Rice, fish, timber, garments and rubber are Cambodia's major exports. The International Rice Research Institute (IRRI) reintroduced more than 750 traditional rice varieties to Cambodia from its rice seed bank in the Philippines (Jahn 2006,2007). These varieties had been collected in the 1960s. In 1987, the Australian government funded IRRI to assist Cambodia to improve its rice production. By 2000, Cambodia was once again self-sufficient in rice (Puckridge 2004, Fredenburg and Hill 1978). The recovery of Cambodia's economy slowed dramatically in 1997–98, due to the regional economic crisis, civil violence, and political infighting. Foreign investment and tourism also fell off drastically. Since then however, growth has been steady. In 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 5.0%. Despite severe flooding, GDP grew at 5.0% in 2000, 6.3% in 2001, and 5.2% in 2002. Tourism was Cambodia's fastest growing industry, with arrivals increasing from 219,000 in 1997 to 1,055,000 in 2004. During 2003 and 2004 the growth rate remained steady at 5.0%, while in 2004 inflation was at 1.7% and exports at $1.6 billion US dollars. As of 2005, GDP per capita in PPP terms was $2,200, which ranked 178th (out of 233) countries. The older population often lacks education, particularly in the countryside, which suffers from a lack of basic infrastructure. Fear of renewed political instability and corruption within the government discourage foreign investment and delay foreign aid, although there has been significant assistance from bilateral and multilateral donors. Donors pledged $504 m to the country in 2004, while the Asian Development Bank alone has provided $850m in loans, grants, and technical assistance. The tourism industry is the country's second-greatest source of hard currency after the textile industry. 50% of visitor arrivals are to Angkor, and most of the remainder to Phnom Penh. Other tourist destinations include Sihanoukville in the southeast which has several popular beaches, and the nearby area around Kampot including the Bokor Hill Station. Growth in developing East Asia is expected to be 8.6% in 2008 as a result of the unfolding financial turmoil in the US and the resulting global slowdown, says the World Bank’s latest six-monthly review of the East Asia and Pacific region’s economies. Although that is below 10.2% in 2007, it’s still very strong by international standard. In fact, according to the latest East Asia & Pacific Update, the region and especially China has increasingly become a “growth pole” in the world economy – acting as a counterweight to the slowing industrial economies. waiting for customers In Thailand, the challenge this year is to sustain the strong export growth and improve domestic demand. The slowdown of the global economy could make it difficult for Thai exports to repeat the robust performance of 2006 and 2007, while higher inflation could dampen domestic consumption. In its latest Thailand Economic Monitor, the World Bank also increased its forecast for Thailand’s 2008 GDP growth to 5% from the previous 4.6%, citing the expected recovery in domestic demand and the Thai Government’s short-term economic stimulus measures as the main factors. However, the Bank also warns that there are significant risks that this growth might not be achieved, particularly because of the uncertain global environment and the rise in food as well as energy prices. Economic growth in Thailand slowed to a seasonally adjusted 0.7 percent in the second quarter, well below economists' forecasts, as soaring costs and political instability curbed demand and investment. But the state planning agency raised its full-year growth forecast to 5.2 percent to 5.7 percent from the 4.5 percent to 5.5 percent predicted in May as a result of healthy exports in the first half and an expected boost from government stimulus measures. Analysts were skeptical about the new government forecast. Economists had estimated 1 percent growth in gross domestic product for the second quarter, and a Reuters poll in late July predicted 5 percent growth for the full year. "The underlying reasons for the slowdown were quite obviously the inflation situation as well as political uncertainty," Vishnu Varathan of Forecast Singapore said, referring to months of street protests against the government. "Both these factors weighing on consumption and investments. A key factor to note is that inflation has ravaged the economy, with the escalation in price pressures teetering on being alarming." Today in Business with Reuters European stocks fall after slide in Asia As oil prices plunge, OPEC faces production dilemma Britain worries as companies flee over tax rates The National Economic and Social Development Board said it expected inflation to hit a 10-year high of 6.5 percent to 7 percent in 2008, up from the 5.3 to 5.8 percent forecast in May, but below a 7.5 to 8.8 percent projection by the Bank of Thailand in July. Despite this forecast, some economists said they did not expect the Bank of Thailand raise interest rates on Wednesday. "As economic uncertainties have increased, the Bank of Thailand is likely to hold interest rates steady at its next meeting," said Charl Kengchon, at the Kasikorn Research Center. Growth was down sharply from the first quarter's 1.3 percent. Compared with the year-earlier quarter, GDP grew 5.3 percent, below the 5.7 percent forecast in a Reuters poll and below the revised 6.1 percent in the first quarter. The global economic slowdown could also hurt demand for Thai exports, said Usara Wilaipich of Standard Chartered Bank. "We expected growth to lose momentum in the second half," he said. "For the full year, we still expect the economy to grow 4.7 percent." Household spending and private investment have suffered as a result of higher energy and food prices. Commercial vehicle sales fell 5.7 percent from a year earlier after rising 7.5 percent in the first quarter. Factory construction slowed 10.8 percent in the second quarter from a year earlier after rising 5.9 percent in the first. Some analysts say that inflation may have peaked in July at a 10-year high of 9.2 percent and that price pressures may gradually ease thanks to falling oil prices and government measures. Year Gross Domestic Product US Dollar Exchange Inflation Index (2000=100) 1980 662,482 20.47 Baht 41 1985 1,056,496 27.15 Baht 53 1990 2,191,100 25.58 Baht 64 1995 4,186,212 24.91 Baht 81 2000 4,922,731 40.11 Baht 100 2005 6,924,273 41.02 Baht 111 A dispute between the Thai government and the country's central bank about economic policy has escalated. Thailand's finance minister said the central bank must focus on boosting economic growth rather than fighting inflation, something the bank opposes. Surapong Suebwonglee said central bank governor Tarisa Watanagase would not be sacked but urged a change of policy. The central bank has not ruled out more rate rises to tackle inflation, a move ministers think will hurt the economy. 'Rival directions' It raised rates from 3.25% to 3.5% last month, in response to a jump in consumer price inflation to more than 9%. Like many Asian countries, Thailand is struggling to cope with the economic and social effects of higher fuel and food costs. The government and the central bank have been on a collision course in recent weeks over the best remedy for Thailand's economic problems. Government and bank policies should be "pointing in the same direction" Mr Surapong said on Friday. However, he stopped short of endorsing calls from other members of the government for Mrs Tarisa to step down. "Policy differences won't lead to demotion of the central bank governor," he said. "But if that difference is so wide, one policy must stay and the other must go." The spotlight will now be on the central bank when it next meets to discuss interest rates at the end of the month. Deputy bank governor Atchana Waiquamdee said on Thursday that it would consult with ministers before making its decision but that the decision would rest with it alone. Inflationary pressures are causing headaches for central bankers across the region. South Korea raised rates to a seven-year high of 5.25% on Thursday but, a day later, figures showed producer prices at a 10-year high. Thai economic growth dropped to 5.3 per cent in the second quarter of 2008, official figures showed Monday, as political uncertainty, soaring inflation and weak domestic demand hit the kingdom. The National Economic and Social Development Board said gross domestic product (GDP) growth at an annual rate was down from a revised 6.1 per cent in the first quarter of the year. The board’s secretary general Amphon Kittiamphon said the decline was due to lower government spending and a slowdown in private sector investment. Despite that, the board forecast the Thai economy would likely grow between 5.2 and 5.7 per cent this year, up from its May projection of 4.5 and 5.5 per cent. “If the government pushes forward with its mega projects including infrastructure construction, as well as creating confidence among investors, our GDP in the last six months of this year is most likely to be no less than 5.2 per cent,” Amphon told reporters. Volatile global oil prices have already prompted Thailand’s central bank to lower its growth estimates for this year to 4.8-5.8 per cent. The finance ministry had initially projected 6.0 per cent. Inflation soared to a 10-year-high of 9.2 per cent in July due to high fuel and food prices. The Bank of Thailand has estimated that inflation will average 7.5 to 8.8 per cent this year. Analysts said the second-quarter slowdown likely indicated the Bank of Thailand will hike interest rates just once more this year from the current level of 3.5 per cent. Its rate-setting committee is due to meet on Wednesday. “(These economic conditions) will limit central bank tightening,” Standard Chartered economist Usara Wilaipich told Dow Jones Newswires. “Therefore, we expect only one more 25-basis-point hike from the Bank of Thailand and this should be the last rate hike for the rest of this year.” The central bank and the finance ministry have reportedly been at loggerheads over the interest rate and how to handle the inflation surge. The English-language Bangkok Post newspaper reported last week that revered King Bhumibol Adulyadej voiced support for central bank governor Tarisa Watanagase and praised her for steering the nation away from financial woes. Thailand’s government, which was formed in February, has been hit by street protests since May demanding the resignation of premier Samak Sundaravej. Rumours of a coup circulated in May and June, and the general uncertainty has helped push the Thai stock market down nearly 18 per cent since late May. A World Bank survey last week said political turmoil had dimmed Thailand’s appeal to investors, with more than 60 per cent saying uncertainty over government policies had weakened the investment climate in 2007. Thailand's economic growth slowed more than expected in the second quarter, increasing the likelihood the central bank will soon stop raising interest rates. Southeast Asia's second-biggest economy expanded 5.3 percent in the three months ended June 30 from a year earlier after a revised 6.1 percent gain in the first quarter, the government said today in Bangkok. Growth was forecast to be 5.8 percent, according to the median estimate of 10 economists surveyed by Bloomberg. The economy slowed for the first time in more than a year as higher exports of rice and rubber failed to offset a decline in domestic spending. Growth may ease further in the second half as protests and court cases against Prime Minister Samak Sundaravej's six-month-old government erode consumer confidence. "Investment has suffered, and given that political uncertainty is likely to linger, growth is likely to be depressed for quite some time,'' said Frederic Neumann, an economist at HSBC Global Markets in Hong Kong. ``One big risk for Thailand is that exports are likely to slow and in the face of weak domestic demand it is likely to lead to a sharp deceleration of economic growth.'' The Thai baht fell on speculation slower growth will damp overseas investors' demand for local assets. The currency slipped 0.6 percent to 34.11 per dollar as of 12:27 p.m. in Bangkok, according to data compiled by Bloomberg. Rate Rises May End Weaker growth means the Bank of Thailand may be on the verge of its last interest-rate increase this year, according to a Bloomberg survey. Governor Tarisa Watanagase is under pressure from the government to keep borrowing costs on hold to spur the economy. Bank of Thailand policy makers meet on Aug. 27. Thailand's central bank will raise its one-day repurchase rate by a quarter of a percentage point to 3.75 percent, the second increase in two months, according to eight of 13 economists surveyed by Bloomberg. The rest expect borrowing costs to be left unchanged. Of the eight predicting an increase this week, four say it will be the last for this year and the others forecast at least a further quarter-point rise. Lower fuel costs will start to slow inflation from October onwards, Finance Minister Surapong Suebwonglee said Aug. 15. "Inflation should be at a controllable level,'' Ampon Kittiampon, secretary general of the government's National Economic and Social Development Board, said today. ``It shouldn't exceed 6.5 percent to 7 percent for the whole year due to the government's measures and softening oil prices.'' Government Criticism The central bank last month raised its key rate by a quarter point to 3.5 percent, the first increase in two years, after inflation hit a decade-high 9.2 percent in July. The move has been criticized by members of the government including Deputy Finance Minister Suchart Thadathamrongvej, who said this month that Governor Tarisa should resign if the central bank's policy differs from the government's pro-growth position. The central bank and the finance ministry agree that Thailand's economic growth may ease in the second half as a global slowdown reduces demand for the nation's exports. "Private investment and spending may not recover quickly given higher oil prices and inflation,'' Ampon from the National Economic and Social Development Board said today. The board revised its full-year growth target to between 5.2 percent and 5.7 percent, from a range of 4.5 percent to 5.5 percent, because exports were stronger than expected in the first six months, Ampon said. 'Under Pressure' Exports from Thailand, which account for about 70 percent of gross domestic product, rose 26.3 percent in the second quarter from a year earlier. That was faster than the 22.9 percent pace recorded in the previous three-month period. "The overall growth momentum will come under pressure in the second half because of slowing external demand,'' said Song Seng-Wun, an economist at CIMB-GK Securities Ltd. in Singapore. `` Thailand will not be able to decouple from the rest of Asia and the world.'' Spending by local consumers and companies hasn't been that strong. An index of consumer confidence fell from April through June in line with surging oil costs, and protests and court cases against Samak's government. "When you have political turbulence, one thing you will see is corporates holding back investment,'' said Nicholas Bibby, an economist at Barclays Bank Plc in Singapore. Samak is under fire from protesters who say he is a stand-in for former premier Thaksin Shinawatra and want him to quit. Thousands of protesters marched to the British embassy in Bangkok on Aug. 19 to demand the extradition of Thaksin, who fled to the U.K. to avoid corruption charges. Consumption, Investment Slow Thailand's gross domestic product expanded a seasonally adjusted 0.7 percent in the second quarter from the previous three months, when it grew a revised 1.3 percent, according to today's statement. Private consumption rose 2.4 percent from a year earlier in the quarter, after gaining 2.6 percent in the first quarter. Total investment in the second quarter rose 1.9 percent from a year earlier, slowing from 5.4 percent in the previous three months. Manufacturing expanded 8 percent, from a revised 9.9 percent pace in the previous three months. Thailand's $245 billion economy may expand more than 5 percent in the second half of the year, said Ampon. The economy grew 5.7 percent in the first six months, he said. Economists in a Bloomberg survey expect growth of 5 percent this year and 5.2 percent in 2009. Source: bloomberg.com Europe