Friday, November 4, 2011

PM weighs in on China debt debate

 
Prime Minister Hun Sen yesterday added his two cents to the ongoing debate on what Cambodia’s debt to China actually is, declaring it stands at only US$2 billion.

At a ground-breaking ceremony marking the beginning of construction on Phnom Penh’s Cambodia-China Friendship Bridge, the premier rejected estimates he claimed unspecified opposition parties had made that the debt stood at $6 billion.

The premier’s $2 billion figure included a $500 million loan he recently secured during a 10-day visit to the burgeoning superpower.

“I met with Chinese Prime Minister Wen Jiabao and had a fruitful negotiation, and I requested to the premier to help support the 2012 budget for seven projects which [total] approximately US$500 million,” he said.

“We need [to borrow] US$500 million per year from China to support a secure budget, and there is no country in the world that does not owe debt,” he added.

Last month, senior ruling party lawmaker Cheam Yeap said Cambodia owed China about $4 billion out of a total $7 billion the Kingdom owes in total foreign debt.

Sam Rainsy Party spokesman Yim Sovann said yesterday he thought that figure was closer to the mark but cautioned it was unreliable because the government provides scant information about state finances.

He said instead of endlessly borrowing money from foreign countries, the government should try and eliminate widespread corruption in the collection of taxation.

“If you look at the tax collection rate as a percentage of GDP, it’s about 12 percent, and if you look at our neighbouring countries [Vietnam and Thailand], it’s about 20 percent,” he said.

“[Value Added Tax] is very high, 10 percent in Cambodia. In Thailand, it’s only 7 percent, in Vietnam, only 7 percent, but the tax collection [in Cambodia] is very low, that means corruption.”

Hun Sen also took yesterday’s media opportunity to blast comparisons made between him and deposed Libyan dictator Muammar Gaddafi – which have appeared as cartoons on the opposition-affiliated news blog KI-Media.

“Do not consider Hun Sen will have the same fate as Gaddafi,” he warned, after wishing a safe re-entry to the unmanned Chinese spacecraft Shenzhou-8, which blasted off on November 1.