Usually a political business cycle means a greater distribution of the largesse, leading up to the election. But in Cambodia it means a greater insecurity of property rights and thus a contraction of economic activity:
The frenzied lead-up to national elections may have shaken consumer confidence as business owners and spenders worry over the heightening contest between the ruling Cambodian People’s Party and the opposition Cambodia National Rescue Party.
With a comparably less violent pre-election period, however, the declines have not been as bad as in previous years.
Seng Limkunthea, the 35-year-old owner of Seng Sok Heng construction and machinery materials near Chroy Changvar Bridge, said she has observed a 50 per cent decline in business over the past few weeks.
“People want to hold on to money during the period, because they think that if something happens, they won’t have money in their hands,” Limkunthea said.
“Some buyers just delay their buying, because they are afraid,” she said, adding that she was surprised to see the drop, given the level of stability now.
“I believe that the situation will return to normal after the election, in about one month,” she said, adding, “what are we afraid of?”