Cambodia government to reduce foreign debt

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Abc123
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Cambodia government to reduce foreign debt

Post by Abc123 » Tue Jan 16, 2018 9:22 pm

https://www.bangkokpost.com/news/asean/1396866/

The Cambodian government plans to reduce its foreign debt and raise capital through the issuance of bonds, a representative of the Ministry of Economy and Finance has unveiled.

“Increasing local borrowing instead of foreign borrowing will improve the country’s trade balance and current account,” the Khmer Times on Tuesday quoted Vong Seyvisoth, Secretary of State at the Ministry of Economy and Finance as saying.

It will also help the riel’s exchange rate remain stable, he said.

The official was speaking during a forum on the national budget for the year 2018 held on Monday.

Decreasing foreign debt will help balance the expenditure budget, improving the country’s current account. Meanwhile, issuing bonds will complement the rise in revenue from tax collection, which has increased significantly in the last few years, he said.

“Cambodia’s is preparing to adopt a new policy. We will reduce foreign borrowing while strengthening local borrowing,” Seyvisoth said.

“We are also developing the local bond market which will be online by 2019,” he said, adding that the government plans to issue bonds in the near future, and is now preparing the legal groundwork and infrastructures that would allow that to happen.

“Borrowing locally entails lower levels of risk than borrowing from abroad.

“When we borrow from abroad, we need to pay it back, which affects the current account and the balance of payments. When we borrow domestically, the money stays in the country.”

He noted, however, that Cambodia’s current debt-to-gross domestic product ratio is 32 or 33%, which is a healthy level of indebtedness, and should not preclude the country from continued borrowing.

According to the Ministry of Economy and Finance, Cambodia’s foreign debt stood at US$7.1 billion in 2017. In 2018, it will be $7.8 billion.

Public expenditure this year will amount to $6.4 billion, 18.75% of GDP, as indicated in the national budget for 2018. Government income is projected to reach $4.6 billion.

Chan Sophal, director of the Centre for Policy Studies, said the government’s new strategy was sound and will help increase public revenue, but added that the country can continue to borrow from abroad without putting the economy at risk.

“To ensure the efficiency of loans, we need to keep a closer eye on the projects that are being financed and make sure they are built according to plan and with the necessary quality standards.”

He also said that Cambodia is in a good position to increase its foreign debt without this posing a risk to the economy, adding that the country should continue to borrow from abroad to finance the construction of public infrastructure.

“We have been quite cautious with our borrowing,” he said. “Why don’t we just borrow a lot to help enrich the nation quickly? We don’t do this because we need space in case a crisis happens,” he said.

According to Ministry of Economy and Finance, the GDP will grow by 6.9% in 2018 due to robust performances of the agriculture, manufacturing, and service sectors. GDP per capita will be $1,569, according to official projections.

Due to robust economic growth, Cambodia is becoming less dependent on other countries in terms of raising capital, Seyvisoth said, noting that the country can now “survive and fully control its economy.”

In December, the Securities and Exchange Commission of Cambodia, the stock market regulator, approved the rules that will regulate the local bond market, together with three new financial tools that aim to boost trading on the local bourse.
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Re: Cambodia government to reduce foreign debt

Post by pczz » Tue Jan 16, 2018 11:03 pm

yes, well if a government bond is as safe as a lease on siem reap airport I am sure there will be plenty of takers
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Re: Cambodia government to reduce foreign debt

Post by Arget » Wed Jan 17, 2018 3:50 am

China will buy up all the bonds and then own Cambodia legally.

I wonder who suggest the bonds idea????????????

a bloodless invasion =@
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Re: Cambodia government to reduce foreign debt

Post by pczz » Wed Jan 17, 2018 9:36 am

Arget wrote:
Wed Jan 17, 2018 3:50 am
China will buy up all the bonds and then own Cambodia legally.

I wonder who suggest the bonds idea????????????

a bloodless invasion =@
They they already did with usa :stir:
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Re: Cambodia government to reduce foreign debt

Post by Kammekor » Wed Jan 17, 2018 10:02 am

Public expenditure this year will amount to $6.4 billion, 18.75% of GDP, as indicated in the national budget for 2018. Government income is projected to reach $4.6 billion.
Well, they overspend only 39%.... Quite cautious indeed....
According to the Ministry of Economy and Finance, Cambodia’s foreign debt stood at US$7.1 billion in 2017. In 2018, it will be $7.8 billion.
And I just wonder how you can overspend 1.8 billion while the debt will only rise 0.7 billion. Magic in the Ministry....
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Re: Cambodia government to reduce foreign debt

Post by Arget » Wed Jan 17, 2018 10:08 am

creative accounting Khmer style.................
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Re: Cambodia government to reduce foreign debt

Post by Kammekor » Wed Jan 17, 2018 10:11 am

Arget wrote:
Wed Jan 17, 2018 10:08 am
creative accounting Khmer style.................
If they are just as creative with their bonds people will love 'm like they loved in the Argentinean Peso in 2001.
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Re: Cambodia government to reduce foreign debt

Post by pczz » Wed Jan 17, 2018 10:43 am

Its not creative accounting. Cambodians do not have a clue about economics, look a the way they run their business. Accounts? books? profit and loss? cash flow? business plan = borrow money from family, open shop , make money, tell family no make money, no pay loan
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Re: Cambodia government to reduce foreign debt

Post by bolueeleh » Fri Jan 19, 2018 9:07 am

reducing aids from US, issuing own bonds, done.
next steps
1 - uncoupling riel from USD
2 - allowing trading in RMB
3 - allow easy listing of chinese companies on cambodia stock exchange

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the world has realised that political coercion tied in with economic aids does not work anymore, cause there are 2 big brothers now
Money is not the problem, the problem is no money
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