Greek Crisis Holds Lessons for Cambodia

Euro currency pictured in the regional central bank in Bremen, Germany. Photo: AP

Ros Sothea, VOA Khmer
Phnom Penh
Tuesday, 25 May 2010

While Cambodia may never experience an economic crisis like the one in Greece that rattled world markets, economists here say the experience holds valuable lessons in the importance of increased annual revenue and reduced debts and deficits.

Before a $146 billion monetary package from neighboring European countries and the International Monetary Fund last week, Greece was facing a particularly high budget deficit of 12.7 percent, in part because its national tax collection is weak and corruption there is rooted.

Greece borrowed from other countries to cover its annual government expenditures—something that almost all countries do. But by 2010, Greece’s debt had reached $400 billion, and its weak tax collection was exacerbated by the global economic crisis.

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