Carbon finance sounds boring and technical and not much fun. However, it actually does a lot of good and can help fund critical environmental preservation projects as well as introduce clean and renewable technologies in both developed and developing countries.
|Royal oxen, cousins to the more common variety in the photo, offered their take on Cambodia's agricultural prospects.|
|Declining revenue of tuk-tuk drivers in Cambodia shows even the informal sector isn't insulated.|
The World Bank today launches its projection of a 1 percent contraction of the Cambodian economy. This is based on an analysis of available statistics and feedback from a range of economic actors. Yet, to most of my Cambodian friends, it remains hard to conceive.
It is true that "seeing" such a contraction will be difficult. Basically, what it means is that economic activity in 2009 will be pretty much the same as in 2008. So the fact that we continue to have traffic jams in Phnom Penh, see tourists at the Royal Palace, and hear construction machines in many residential areas is consistent with such a projection. What will change, though, is that incomes will not increase this year as fast as past years and it will also become more difficult for the 250,000 young people leaving school each year to find their first job. What also will be different is that with no growth in aggregate, there will be a proportion of those with a livelihood at the end of the year worse than at the beginning.
Despite a surge in joblessness and a regional drop of the forecasted GDP growth to 5.3 percent expected in 2009, developing East Asian and Pacific countries may be able to look to China for hope during the current global economic slowdown. That's according to the World Bank's April 2009 edition of the East Asia & Pacific Update, which was released today.
The latest half-yearly assessment of the region's economic health, aptly titled "Battling the Forces of Global Recession", says there have already been signs of China's economy bottoming out by mid-2009. China's possible subsequent recovery in 2010, concludes the report, could contribute to the entire region's stabilization, and perhaps recovery.
There are a number of ways to review the findings of the report on the World Bank's website. Head over to worldbank.org/eapupdate to view specific chapters or download the full report. For an intimate view of people who are being affected by the ongoing financial crisis in East Asian and Pacific countries – including Cambodia, Thailand, Mongolia and the Philippines – check out "Faces of the Crisis". You can also view hi-res graphs from the report here.
Also, check back here in the next day or so for blog posts written by World Bank economists based in Cambodia and Lao PDR.
UPDATE: For country-specific expert perspectives on the new World Bank repot, check out blog posts from World Bank economists based in Cambodia and Laos. Stéphane Guimbert considers what contraction might look like in Cambodia. And Katia Vostroknutova takes a look at Laos' economy, which is less affected by crisis, but faces the increasing challenge of sustaining growth during the crisis.
|The global slowdown is hurting Cambodia's tourism industry, with fewer visitors in late 2008 than in the same period of 2007. Image credit: flydime at Flickr under a Creative Commons license.|
It's been a couple of months since the World Bank prepared the "perfect storm" report on the recent economic developments in East Asia. Our view at the time was that the crisis would reveal some of Cambodia's economic vulnerabilities – i.e. its lack of export diversification and its extreme reliance on foreign investment for growth. I think that this is an important lesson from our recent analysis on growth in Cambodia (more on this later).
Our projections for 2009 at the time were just below 5 percent GDP growth. This is consistent with the projections of the Government, the IMF, the Asian Development Bank, and an International Labor Organization (ILO) report on the impact of the crisis released yesterday. The Economist Intelligence Unit has a more pessimistic projection of 1 percent.
So who is right?
Well, the bad news continues across the East Asia and Pacific region. The Financial Times just ran a long article on the "speed and ferocity of the region's economic downturn." The piece highlighted that the fast downturn was a result of Asia's over-reliance on export-led growth over the past decade. This follows the IMF's slashed growth forecasts for the large East Asian economies. It projected only 5.5 percent growth across developing Asia for 2009, which sounds great for most economies these days, but it is way off of the 7.8 percent posted last year.
The IMF is expecting only 6.7 percent growth in China, which is 1.8 percent less than what they forecast only in October. This contrasts sharply with the view of the World Bank's Chief Economist, Justin Lin, who just two weeks ago said he thought China could achieve the target rate of growth – 8 percent – this year because of fiscal stimulus spending.
There has recently been some big news regarding treatment of malaria. First the good news.