DAP: The breaking news in Cambodia: “Fourteenth Human Case of Avian Influenza H5N1 in Cambodia” plus 3 more

Cambodia's gross domestic product (GDP) is set to expand by 6.5% in 2011 and 6.8% in 2012, but the country needs to address several major development challenges if it is to achieve poverty reduction goals and sustainable growth, the Asian Development Bank (ADB) says in its new macroeconomic analysis of Cambodia's economy on Wednesday.

The Asian Development Outlook (ADO) 2011, ADB's flagship annual economic publication released today, says a rebound in tourism and clothing exports, and steady agricultural sector growth, will combine to drive growth in 2011.In 2010 the economy grew 6.3% .

Agriculture is estimated to expand 4.3% in 2011, thanks to continuing investment in irrigation and broader access to fertilizers and high-yield seeds. Growth in industry is projected at around 10.8% based on positive indications for future garment orders from the US and EU. In the EU case, this is partly due to relaxed rules of origin requirements on imports of Cambodian clothing. Services growth is forecast at around 5%.

Higher tourism receipts will contribute to a surplus in services trade. The current account deficit is projected to narrow to 10.7% in 2011 and 10.2% in 2012. Gross international reserves are projected to grow to $2.84 billion in 2011, covering about 4.4 months of imports of goods.

"The continued recovery of exports and tourism in 2011 is expected to help Cambodia sustain its return to a longer-term growth path of 6-7%. However, the pressure is now on to intensify efforts at meeting the long-standing challenges of accelerating economic diversification and improving the general investment climate," says ADB Senior Country Economist Peter Brimble.

Inflation is forecast to average 5.5% this year, up from 4% in 2010. Risks to the forecasts,the report says, center on external events such as unexpected global economic weakness or higher than assumed oil prices, which could hurt prospects for Cambodia's tourism and clothing exports and push up inflation. The budget deficit is set to increase marginally to 6.2% of GDP in 2011.

The ADO 2011 warns that lack of progress on fiscal consolidation, combined with low tax revenue and the absence of government debt securities, may eventually lead to problems in funding the fiscal deficit.

"This will require continued prudent handling of monetary policies and government expenditures, combined with intensified efforts to build capital markets and to broaden the tax base and increase the low levels of revenue collection," says Mr. Brimble.

The ADO highlighted the government's recent rice policy and endorses the need to promote rice production and milled rice exports in order to ease Cambodia's reliance on clothing markets in the US and Europe. Improved rural-urban links are also called for to ensure an inclusive growth process and to support the entry of Cambodia's farming sector into national, regional and global markets.

The ADO stresses the potential benefits of enhanced connectivity with regional neighbors Thailand, Lao PDR, and Viet Nam, and emphasizes the need to improve the competitiveness of the garment, agriculture, and tourism sectors by reducing the high cost of transport, energy, and related infrastructure, raising the quality of existing products and services, and developing skills to add value to products.

"Regional cooperation will be an increasingly important contributor to Cambodia's future growth in all sectors," stressed Mr. Brimble. "And to harness this potential, the country needs to continuously work to cut transport and logistics costs, streamline bureaucratic procedures at the ports and border crossings, and reduce unofficial fees."

Cambodia's gross domestic product (GDP) is set to expand by 6.5% in 2011 and 6.8% in 2012, but the country needs to address several major development challenges if it is to achieve poverty reduction goals and sustainable growth, the Asian Development Bank (ADB) says in its new macroeconomic analysis of Cambodia's economy on Wednesday.

The Asian Development Outlook (ADO) 2011, ADB's flagship annual economic publication released today, says a rebound in tourism and clothing exports, and steady agricultural sector growth, will combine to drive growth in 2011.In 2010 the economy grew 6.3% .

Agriculture is estimated to expand 4.3% in 2011, thanks to continuing investment in irrigation and broader access to fertilizers and high-yield seeds. Growth in industry is projected at around 10.8% based on positive indications for future garment orders from the US and EU. In the EU case, this is partly due to relaxed rules of origin requirements on imports of Cambodian clothing. Services growth is forecast at around 5%.

Higher tourism receipts will contribute to a surplus in services trade. The current account deficit is projected to narrow to 10.7% in 2011 and 10.2% in 2012. Gross international reserves are projected to grow to $2.84 billion in 2011, covering about 4.4 months of imports of goods.

"The continued recovery of exports and tourism in 2011 is expected to help Cambodia sustain its return to a longer-term growth path of 6-7%. However, the pressure is now on to intensify efforts at meeting the long-standing challenges of accelerating economic diversification and improving the general investment climate," says ADB Senior Country Economist Peter Brimble.

Inflation is forecast to average 5.5% this year, up from 4% in 2010. Risks to the forecasts,the report says, center on external events such as unexpected global economic weakness or higher than assumed oil prices, which could hurt prospects for Cambodia's tourism and clothing exports and push up inflation. The budget deficit is set to increase marginally to 6.2% of GDP in 2011.

The ADO 2011 warns that lack of progress on fiscal consolidation, combined with low tax revenue and the absence of government debt securities, may eventually lead to problems in funding the fiscal deficit.

"This will require continued prudent handling of monetary policies and government expenditures, combined with intensified efforts to build capital markets and to broaden the tax base and increase the low levels of revenue collection," says Mr. Brimble.

The ADO highlighted the government's recent rice policy and endorses the need to promote rice production and milled rice exports in order to ease Cambodia's reliance on clothing markets in the US and Europe. Improved rural-urban links are also called for to ensure an inclusive growth process and to support the entry of Cambodia's farming sector into national, regional and global markets.

The ADO stresses the potential benefits of enhanced connectivity with regional neighbors Thailand, Lao PDR, and Viet Nam, and emphasizes the need to improve the competitiveness of the garment, agriculture, and tourism sectors by reducing the high cost of transport, energy, and related infrastructure, raising the quality of existing products and services, and developing skills to add value to products.

"Regional cooperation will be an increasingly important contributor to Cambodia's future growth in all sectors," stressed Mr. Brimble. "And to harness this potential, the country needs to continuously work to cut transport and logistics costs, streamline bureaucratic procedures at the ports and border crossings, and reduce unofficial fees."

Cambodian delegation led by Deputy Prime Minister and foreign minister Hor Nam Hong Wednesday left here to attend the meetings of general border committee (GBC) and Joint Border committee (JBC) in Indonesia from 7-8 April, according to the invitation from Indonesia, which chairs ASEAN.

"I am very disappointed with Thai behaviors. Thai side has still proposed to resume bilateral talks while Indonesia calls for the meetings. It looks like crazy acts," Hor Nam Hong told reporters at the Phnom Penh airport ahead of flight departure. "Thai side has always said untruthfully and always been flexible. And sometimes, it said like palm and back part of hand," he stresses.

Previously, Samdech PM Hun Sen said that Cambodia could not slap Indonesia as chair of ASEAN and respected UN Security Council's decision which handed over the power to ASEAN to deal the matter. So, we have to stop talking about the bilateral talks anymore. Thai has never ratified the three diplomatic notes which agreed by foreign ministers' meetings. "I have plans to raise the border issues at the upcoming ASEAN summit," Samdech stresses.

Thai side has delayed to approve the notes for several times, and delayed the deployment of the Indonesian observers to monitor the ceasefire at the border issues. Thailand and Cambodia agreed on Feb 22 to allow the Indonesian observers to deploy their officials as Cambodia announced it will warmly welcome and facilitate all works.

"The Preah Vihear temple will be first place for deployment of Indonesian observers, Hor stresses.  "Cambodia has prepared all things including legal documents to international courts of Justice, and border self- defense," Hor said. He added: Cambodia has never cared about Thai side.  Thais side goes to attend the meeting or not. This is matter of Thailand.  But Cambodian side must go according to the invitation from Indonesia, who chairs ASEAN and UN Security Council's decision allowed the ASEAN to mediate and help.  Thai used own map to occupy areas near 11^th Khmer Preah Vihear temple, and other border areas.

"Today I lead our delegation to. We go to Bogor in Indonesia according to the call –on meeting from Indonesia on border issues and Indonesia n observers" Hor said.  Thailand- Cambodia agreed to allow the Indonesian observers to monitor ceasefire but now it is over a month.

Cambodian delegation accompanied by Gen. Hun Manet, deputy commander in chief, Neang Phat, secretary of state of defense ministry, Var Kim Hong, head of border committee of Cambodia, and senior governmental officials. Thai troops opened fire at Cambodian troops at the border areas near the temple on Feb 4-7 which caused the hundreds of families to flee villages for safety. Tea Banh said that he had never contacted directly to Thai defense minister. "Military attaché of Thai embassy asked us to resume the bilateral talk on GBC. I told them back. We could not do so," Tea Banh told reporters at the airport.

Thai side plans to use the temple and border issues to control the Tamoan Temples, and take benefit from offshore oil and gas. Thai side has used the border issues to deal internal political matter in the country and also will use it to topple for the next general election. In 1962, the Hague court ruled the verdict that the temple belonged Cambodia and its troops removed from the temple after occupying in 1954.  Unesco also called for the meeting on the damage of the temple in fresh fighting in early Feb.