Friday, July 15, 2005

Opposition Party Proposes Short Term Measures to Control Inflation

Cambodian Opposition parliamentarians urge the Government to take the following measures to bring inflation back to a liveable level. They will offer at least a short term relief to the majority of the population.

1. Reducing petrol tax to parity with those in neighbouring countries. The reduction of tax per litre at the pump will not necessary decrease the overall tax collections. Many studies and experiences support a contention that the tax rate reduction in effect improves the revenue for the government.
2. Giving a clear message to the market that the authorities, with cooperation of World Food Program and donor countries, are able to secure sufficient food supplies. This should help slow down hoarding or private stock piling of foodstuff that can only fuel expectations or speculations that drive the inflation up further.
3. Conducting a national campaign to encourage consumption of substitutes to those commodities with fast rising prices, and appeal to suppliers not to artificially create food shortage for profiteering.
4. There is a need to do more to stabilise the exchange rate so that the poor who use the riel currency will have some relief from the rising price of imported foodstuff.

Also consideration should be given to a prospect of further increase in the price of crude oil; and we have to be prepared for the impact of such outcome.

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