Cambodian Recession 2020/2021 ?
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Cambodian Recession 2020/2021 ?
Cambodian Recession ?
Is Cambodia about to experience its first economic downturn, or recession, in decades ?
With 2020's various challenges and global crises it is a valid question.
Tourism accounts for roughly 33% of Cambodia's GDP. But now nobody can, or wants, to come. Visa fees are drastically down, Angkor Wat ticket sales are down, hotel occupancy is at a record low.
The garment and shoe sector accounts for roughly 18% of its GDP, and about 80% of its export earnings. This was already slowing down and reducing over the past few years due to unionization causing spiralling costs and overheads making it too expensive to manufacture here. Coupled with the EUs threats to pull the EBA status of Cambodian Garments. But now it is reaching an untenable level as head offices and home markets themselves are also starting to struggle. Several other markets can easily produce the same goods at a much reduced price.
Logistics companies moving products, and people, in and out of the country are suffering as goods are not moving in the same volumes as before, and people are mostly only moving out of the county. Supply lines have remained mostly stable for regional imports, but some shortages have already been seen in local markets, along with sporadic gluts of domestic produce at much reduced prices.
Private schools, universities, institutes, training courses, are all struggling to make headway into workable online solutions, but a lot of customers will be hard to convince when other comes to the end of the current period that it is worth paying the full Bricks and Mortar fee for such services.
Banking and MFI loans have already surpassed the country's annual GDP (2019), and the private loan sector is estimated to be up to twice that according to some reports, the potential for bad debts has never been so high.
All of these sectors are also supported by a large number of non-sector specific companies - think of every computer or laptop in an office, garment factory, hotel, or airport. Think of every piece of paper purchased to print out something at any office in those companies, or indeed any standard piece of office stationery; pens, post-it-notes, or spiral notepads. Think of all those employees buying breakfast, lunch, or just a coffee near their offices everyday. The petrol that they use to get to their offices, the wear and tear, servicing and depreciation of the cars or motor that they use to commute daily. The business lunches, dinners, coffeeshop meetings, beers after work ...
Cambodia has, thankfully, been bypassed by the massive CoVid death rates of many western countries, but the medium to longterm effects on the country are yet to come.
Food security is barely covered with just domestic rice and noodles. Every piece of imported fruit, vegetables, or Vietnamese pork means that some portion of that money leaves Cambodia and goes to a different market economy.
NGOs stopped being a relevant source of cash for the economy a while ago. China has picked up a lot of the slack, but mostly with softloans, and their hard investment has ground quickly to a halt.
Hospitality, F&B, et cetera are struggling - already we have too many outlets and not enough customers, and with even less customers available in the short to medium term things will only get tougher, and we will see more and more of them closing down and not reopening.
As a country, Cambodia has only known double digit, or near double digit, economic growth for the last two or three decades, it is not prepared for an economic downturn, its people here have no experience of one, no idea even what one is, let alone how to weather one.
For years people like myself have been saying that the Cambodian economy needs more diversity, unfortunately this has been very slow to happen, and has only been taken up on a low level, with no national plan or oversight to actively pursue this as a clear strategy for sustainable economic growth.
The heavy dollarisation of the Cambodian has to date afforded some protection - while the US dollar is strong, but that may change at any point, especially with the US increasingly facing its own issues, and a US election just a few months away.
There is a very real chance that by the end of the year, and into 2021, Cambodia will be facing one of its hardest economic times in living memory.
Is Cambodia about to experience its first economic downturn, or recession, in decades ?
With 2020's various challenges and global crises it is a valid question.
Tourism accounts for roughly 33% of Cambodia's GDP. But now nobody can, or wants, to come. Visa fees are drastically down, Angkor Wat ticket sales are down, hotel occupancy is at a record low.
The garment and shoe sector accounts for roughly 18% of its GDP, and about 80% of its export earnings. This was already slowing down and reducing over the past few years due to unionization causing spiralling costs and overheads making it too expensive to manufacture here. Coupled with the EUs threats to pull the EBA status of Cambodian Garments. But now it is reaching an untenable level as head offices and home markets themselves are also starting to struggle. Several other markets can easily produce the same goods at a much reduced price.
Logistics companies moving products, and people, in and out of the country are suffering as goods are not moving in the same volumes as before, and people are mostly only moving out of the county. Supply lines have remained mostly stable for regional imports, but some shortages have already been seen in local markets, along with sporadic gluts of domestic produce at much reduced prices.
Private schools, universities, institutes, training courses, are all struggling to make headway into workable online solutions, but a lot of customers will be hard to convince when other comes to the end of the current period that it is worth paying the full Bricks and Mortar fee for such services.
Banking and MFI loans have already surpassed the country's annual GDP (2019), and the private loan sector is estimated to be up to twice that according to some reports, the potential for bad debts has never been so high.
All of these sectors are also supported by a large number of non-sector specific companies - think of every computer or laptop in an office, garment factory, hotel, or airport. Think of every piece of paper purchased to print out something at any office in those companies, or indeed any standard piece of office stationery; pens, post-it-notes, or spiral notepads. Think of all those employees buying breakfast, lunch, or just a coffee near their offices everyday. The petrol that they use to get to their offices, the wear and tear, servicing and depreciation of the cars or motor that they use to commute daily. The business lunches, dinners, coffeeshop meetings, beers after work ...
Cambodia has, thankfully, been bypassed by the massive CoVid death rates of many western countries, but the medium to longterm effects on the country are yet to come.
Food security is barely covered with just domestic rice and noodles. Every piece of imported fruit, vegetables, or Vietnamese pork means that some portion of that money leaves Cambodia and goes to a different market economy.
NGOs stopped being a relevant source of cash for the economy a while ago. China has picked up a lot of the slack, but mostly with softloans, and their hard investment has ground quickly to a halt.
Hospitality, F&B, et cetera are struggling - already we have too many outlets and not enough customers, and with even less customers available in the short to medium term things will only get tougher, and we will see more and more of them closing down and not reopening.
As a country, Cambodia has only known double digit, or near double digit, economic growth for the last two or three decades, it is not prepared for an economic downturn, its people here have no experience of one, no idea even what one is, let alone how to weather one.
For years people like myself have been saying that the Cambodian economy needs more diversity, unfortunately this has been very slow to happen, and has only been taken up on a low level, with no national plan or oversight to actively pursue this as a clear strategy for sustainable economic growth.
The heavy dollarisation of the Cambodian has to date afforded some protection - while the US dollar is strong, but that may change at any point, especially with the US increasingly facing its own issues, and a US election just a few months away.
There is a very real chance that by the end of the year, and into 2021, Cambodia will be facing one of its hardest economic times in living memory.
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"We, the sons of John Company, have arrived"
- Felgerkarb
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Yup, we both warned about how the economy here has no firm foundation and was unsustainable should something cause negative growth....and here we are.
We, of course, never knew it would be COVID, nobody did...but we did warn of some black swan scenarios and nobody listened.
I haven't seen a client prepared to do any real business in 6 months...a lot of potential speculation on buying up foreclosures is about it...and there is hardly any experience in that area here.
The days of "free money" here are over.
We, of course, never knew it would be COVID, nobody did...but we did warn of some black swan scenarios and nobody listened.
I haven't seen a client prepared to do any real business in 6 months...a lot of potential speculation on buying up foreclosures is about it...and there is hardly any experience in that area here.
The days of "free money" here are over.
====================
Why are the gods such vicious cunts?
Where is the god of tits and wine?
Why are the gods such vicious cunts?
Where is the god of tits and wine?
To echo what Horace said it's the whole bastard world and nobody was or could have been prepared for this.
As I watched an old lady who clearly hadn't been out selling for a while out selling stuff just now it struck me how readily the, older generation at least, re-adapt to hardship.
Meanwhile if you're a cunt like me the time to spring may be soon upon us.
As I watched an old lady who clearly hadn't been out selling for a while out selling stuff just now it struck me how readily the, older generation at least, re-adapt to hardship.
Meanwhile if you're a cunt like me the time to spring may be soon upon us.
- horace
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Countries have to open up borders or they will become dictatorships with increased separation between the haves n have nots. At the same time they must have a plan to contain any outbreaks of covid19 and the more we learn about this disease the more we understand that it is not one virus strain but many , of which some are just plain evil causing strokes and organ failures. Does Cambodia have a plan or is it gonna turn into a N Korea and keep itself shut off from the rest of the world because of its fear of the virus?
k440, something to do when you're pissed.
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I've said it for a while Cambodia needs to open up its postal system and subsidise it so that its not horrendously expensive to post stuff abroad.
I could / would set up companies over night (alas if that was possible in Cambodia) and make a killing even in this economic climate but alas posting items to consumers is too expensive in Cambodia.
I could / would set up companies over night (alas if that was possible in Cambodia) and make a killing even in this economic climate but alas posting items to consumers is too expensive in Cambodia.
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- Felgerkarb
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Ya, it is the whole world, but our world is here, and it could have been better. The 2008 bust was a warning that was ignored in the euphoria of the flood of Chinese money that followed later. Maybe that tap will turn up again, but a stronger local economy must develop for any sustainability...something many have been saying for at least 15 years.RobW wrote: ↑Sat Jul 18, 2020 6:09 pmTo echo what Horace said it's the whole bastard world and nobody was or could have been prepared for this.
As I watched an old lady who clearly hadn't been out selling for a while out selling stuff just now it struck me how readily the, older generation at least, re-adapt to hardship.
Meanwhile if you're a cunt like me the time to spring may be soon upon us.
====================
Why are the gods such vicious cunts?
Where is the god of tits and wine?
Why are the gods such vicious cunts?
Where is the god of tits and wine?
Without wishing you to give away your entire business plan, what for example?Go Programmer wrote: ↑Sat Jul 18, 2020 6:44 pmI've said it for a while Cambodia needs to open up its postal system and subsidise it so that its not horrendously expensive to post stuff abroad.
I could / would set up companies over night (alas if that was possible in Cambodia) and make a killing even in this economic climate but alas posting items to consumers is too expensive in Cambodia.
I can't think of a thing that could be done, even with subsidised post - a silly idea - that couldn't be sourced and exported more cheaply/profitably from one town, Yiwu, in China.
It's a huge shit sandwich and we're all going to have to take a bite
Come over to the cunt-side, soldier. We're putting together a vulture fund.Felgerkarb wrote: ↑Sat Jul 18, 2020 6:47 pmYa, it is the whole world, but our world is here, and it could have been better. The 2008 bust was a warning that was ignored in the euphoria of the flood of Chinese money that followed later. Maybe that tap will turn up again, but a stronger local economy must develop for any sustainability...something many have been saying for at least 15 years.RobW wrote: ↑Sat Jul 18, 2020 6:09 pmTo echo what Horace said it's the whole bastard world and nobody was or could have been prepared for this.
As I watched an old lady who clearly hadn't been out selling for a while out selling stuff just now it struck me how readily the, older generation at least, re-adapt to hardship.
Meanwhile if you're a cunt like me the time to spring may be soon upon us.
1
1
The family here is only using 1/3 of their farmland. If prices on vegetables goes up, it might be a solution for some from the hospitality industry to return home. Not sure about the exact current import/export stats here, but people still need shoes and t-shirts out there. Aeon mall seem back to busy, many Chinese and local paying customers, produce is fresh and prices haven't changed.
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Depends on how you classify a recession.
To me it's not a recession until your internet is cut off, and you have to wank off to the sign language interpreter chick on Apsara TV.
To me it's not a recession until your internet is cut off, and you have to wank off to the sign language interpreter chick on Apsara TV.
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"Now, then, in order to understand white supremacy we must dismiss the notion that white people can give anybody their freedom." Stokely Carmichael
- horace
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Exactly, people must adapt, just the same as governments.citizenK wrote: ↑Sat Jul 18, 2020 7:10 pmThe family here is only using 1/3 of their farmland. If prices on vegetables goes up, it might be a solution for some from the hospitality industry to return home. Not sure about the exact current import/export stats here, but people still need shoes and t-shirts out there. Aeon mall seem back to busy, many Chinese and local paying customers, produce is fresh and prices haven't changed.
k440, something to do when you're pissed.
- Felgerkarb
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Well, she is pretty hot...
====================
Why are the gods such vicious cunts?
Where is the god of tits and wine?
Why are the gods such vicious cunts?
Where is the god of tits and wine?
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