In a recent few days, the government issued a regulation calling for the reduction of electricity consumption in its government offices. This aims to reduce the budget expenses which are not useful while the government budget is increasing from time to time. Noteworthy is that in this year, the government had decided to increase salary of government staff by 20% and the salary for teachers is also increased with a special status. In addition, allowance for spouse and children of government officers is also increased 100% this year. So, you can see that the current expenditure of the government shall be increased.

Another important thing is the high increase in government capital expenditure in infrastructure, an engine of economic growth as set as policy of the government for years. You could see now infrastructure condition has been improved. The expense for this item is from government own budget and foreign aids/loans. Because of such government policy and performance, there is a huge amount of government budget be spent. Considering this, there must be a restriction of government expense, as example the reduction of electricity consumption.

Electricity consumption is now increasing as the private sectors, including garment factories, starting use the state’s electricity, while the fuel price hikes. Before, factories use their electricity machine to supply electricity within their offices. Now, they turn to consume state electricity. Because of this factor, electricity consumption has increased 30%. The higher demand in electricity consumption has made the government to buy electricity from neighboring countries and facilitate foreign investment in electricity production made from water resources.

So now you can see that domestic supply is less than domestic demand. This can reflect to other important commodities, as example fuel, cars, vehicles, vegetables, etc. Thus, more or less, you will see that the price of goods and services will increase from time to time. The increase will be spurred by the economic growth in recent years by two digit of GDP.

The high price of goods and services by economic definition shall reduce demands. However, I do not see this become a realities because Cambodian people still have high demand. The fuel price increases, and demand for motorcycles and cars increase. That is because people earn money from selling their lands. The land price increases, people get money, and they buy luxurious goods such as cars, motorcycles, and others.

One more important thing I would like to share with you is about the higher land price. The land price is higher every day and more and more people are coming into this real estate transaction. It shows the higher demand in land while the land price is increasing. The more demand in land, the higher the price of land.

So now, do you see economic definition may not be applied in Cambodia. Why people do not reduce their demands or consumption, while the price increases? The government reduce consumption of electricity because the government needs more money to do other things which benefits the government officers and for infrastructure development. I would like to leave this question for you to share with me.