In economics, inflation or price inflation refers to a general rise in the level of prices of goods and services over a period of time. The term “inflation” originally referred to increases in the money supply (monetary inflation); however, debates regarding cause and effect have led to its primary use today in describing price inflation. Inflation can also be described as a decline in the real value of money—a loss of purchasing power. When the general level of prices rises, each unit of currency buys fewer goods and services. Price inflation is usually measured by calculating the inflation rate, which is the percentage change in a price index, such as the consumer price index.
Because of inflation many poor children are forced to quit school. Before the inflation, they could earn barely enough for a living and could hardly afford to enable their children to go to school. Soaring prices triggered a lot of discussion and concerns among public, policy circles and development partners. Based on the study given by CDRI—the Cambodia’s Leading Independent Policy Development Research Institute—food expenditure/consumption accounts for about 70% of the total household expenditure for the 40% population, who are relatively poor or absolutely very poor according to the CSES 2004 . “Cereals” contributed 70% of total calorie intake by rural residents, but accounted for only 35% share of the household total food expenditure as they were relatively cheap. The current picture would be much different since the prices of cereals have risen at the highest rate. The other remarkable food items are fish, meat, poultry and vegetables.
The recent survey from CDRI shows that poor food households had the highest school dropout rate of children. It is reported that in January 2008, only about 7% of the children of the questioned households quitted school but it had increased noticeably. In June 2008, the percentage of children who dropped out of school was around 14% which is doubled. Previously, household could hardly manage to survive and send their children to school. But the earning they made was not enough to fit the current double price rising, which forces them to work twice as much. The shape increase of food prices forces them to increase labor force. Because they are lack of labor force, they have to no doubt force their children to quit school. Another thing to be mentioned is the dept. They will have to borrow money from others before their harvesting. Then after their harvesting, they will have to sell most of the rice they gathered even for a lowest price to pay the dept. When all the rice is sold and used, they will have to work for others to earn a living and that is the time assistance from their children is needed; particularly, for those who have less or no land will absolutely force their children to quit school to be part of their labor.
If loan providers could give them with less interest or without interest, their situation would be recovered. After their harvesting, they may have to wait until their rice can be sold for a higher price because they don’t need to worry about paying the increasing interest for their dept. To ease all above mentioned, government as well as donors should think about providing them with loan of small or without interest so that they will gain more benefit from their rice production. Then they will have enough money to support their family and enable their children to go to school again.