It Is Time to Value the Riel and Stop Trading with Foreign Currencies at the Markets in Cambodia

It Is Time to Value the Riel and Stop Trading with Foreign Currencies at the Markets in Cambodia

The Mirror, Vol. 14, No. 665

“Earlier on, Sam Rainsy Party parliamentarians had frequently demanded that the National Assembly should promote the use of the Riel, and now there is a plan by the government for the de-dollarization of the economy towards the use of the Riel in general, which is welcomed immediately by the opposition party.

“A Sam Rainsy Party parliamentarian, Mr. Yim Sovann, welcomed this plan on Friday, 21 May 2010, saying, ‘This is what we have demanded for a long time, to value our national currency and to prevent inflation by using the Riel.’ Mr. Yim Sovann told Moneaksekar Khmer, ‘During sessions of the parliament, I had often raised this issues of using the Riel in our Cambodian economy, to both enhance our national prestige and to promote the Riel in order to effectively maintain macro-economic stability.’

“Mr. Yim Sovann said so after a Secretary of State of the Ministry of Economy and Finance had mentioned, during a meeting on 20 May 2010, a plan of the government to de-dollarize the economy by using the Riel, considering also economic and social observations of the UNDP in Asia and the Pacific. Mr. Hang Chuonarong said that Cambodia wants to de-dollarize towards the use of the Riel. However, the Secretary of State said, ‘We want to change, but we are not sure from which step to start.’

“There is the same insight like what the opposition party had said, that only the use of the Cambodian currency can help Cambodia to maintain economic stability and its prestige. A millionaire and senator from the Cambodian People’s Party, Mr. Kong Triv, stated in support of the initiative that Cambodia should use the Riel to show its integrity at the international arena.

“Anyway, this initiative was intensively debated on Thursday, 20 May 2010. Most participants wanted Cambodia to take effective actions to ensure the use of its currency. For years, Cambodia had been criticized for allowing the free use of foreign currencies, including the US Dollar, which is being lively traded in the markets of Cambodia – and that devalues the Riel.

“Mr. Yim Sovann said that dollar notes are used for buying and selling, including even such simple daily vegetable products like water convolvulus [3], and this partly devalues its own currency – something no other countries do as Cambodia does. Neighboring countries like Thailand and Vietnam established their central banks for exchanging foreign currencies into their countries’ currencies. Everywhere in Yuon [Vietnam], the Dong is used. He added that tourists as well as investors exchange Dollar notes or their countries’ currencies when they leave Cambodia [for Thailand of Vietnam].

“As for foreign currencies used in Cambodia, it is not only the US Dollar. In some provinces of Cambodia bordering Siam [Thailand] and Yuon, their currencies are also invading . For example, if one want to go to Bavet in Svay Rieng or to Phnom Din district in Takeo, one needs to exchange Riels and Dollars for Dongs in advance. And if one wants to go to Oddar Meanchey or to Koh Kong, one needs to exchange money to have Thai Baht, because at those places, Riel notes are not used in general, and some common vendors do not even know Khmer Riel notes well.

“The most important problem is that earlier on as well as recently, it had been reported that the Koh Kong Water Supply and Electricity Authority – exclusively controlled by a local millionaire and senator from the Cambodian People’s Party, Ly Yong Phat, known to hold a Siamese identification card – officially decided to order the citizens in the town to settle their electricity bills with Thai Baht. This seems to show to have indirectly cut-off the province of Koh Kong from Cambodia and attached it to Siam.

“This bad decision, that leads to the devaluation of one’s own currency, seems to be a part of the devaluation of the national identity, and it is seen to originate from the Cambodian government itself, as most bidding and expense-income projects of the state are settled by using US Dollars rather than Riels. Therefore, the Cambodian People’s Party government has to be awake and stop devaluing its own currency. If it prints Riel notes, but does not use them broadly in the country, it is useless to print them and to waste national resources on it. In fact, it is not a good practice when a nation does not support its own country, but values the currencies of other nations.

“At present, the Riel of Cambodia is not used broadly to settle the account of important products – which is very dangerous for Cambodia. Thus, the government should reconsider the demands mentioned above by the opposition party and in a timely way introduce new strategies to guarantee the potential of the Riel in the markets.” Moneaksekar Khmer, Vol.17, #3886, 22-23.5.2010

This article was first published by The Mirror, [4] Vol. 14, No. 665 - Saturday, 22.5.2010
Have a look at the last editorial - you can access it directly from the main page of The Mirror. [4]

Norbert Klein is the Editor of The Mirror [5] – The Mirror is a daily comprehensive summary and translation of the major Khmer language press - More about The Mirror [6]