A World Bank sponsored business seminar quickly lost its demure and academic tone

when participants were asked what they found were the major problems in doing business

in Cambodia.

Participants at Wednesday's seminar became markedly more animated when they were

given a chance to discuss kidnappings and corruption rather than infrastructure or

economic topics.

The seminar, which was jointly sponsored by the World Bank and the Association of

Cambodian Local Economic Development Agencies (ACLEDA), was designed to elicit feedback

on the preliminary findings of a World Bank survey conducted last October on "Constraints

Affecting Private Business in Cambodia".

The survey sample consisted of 200 businesses from across Cambodia, ranging from

"small" businesses with as few as three employees to "large"

businesses of more than 50 employees.

Many of the survey's preliminary findings regarding the impact of the Kingdom's chronic

infrastructure limitations on business operations were predictable - only 36% of

survey respondents had phone service and 1/3 lacked electrical power.

However discussions on those topics were left behind when the seminar's presenter,

Andrew H.W. Stone, Senior Specialist of Private Enterprise Development for the World

Bank, asked the dozen assorted business people in attendance for their opinions on

the major problems they face in doing business.

"Kidnapping threats," one man said immediately, evoking a murmur of agreement

from fellow participants.

According to a female participant, smaller Khmer businesses were particularly vulnerable

to kidnappings by well organized gangs.

"It's the small firms that have the biggest risks (of kidnapping)," the

woman explained. "They don't have the bodyguards with them everywhere they go."

The woman alleged that kidnapping rings work in collusion with government officials

in the selection of potential kidnap victims.

"Kidnappers have very accurate sources," she said. "They know exactly

how much [victims] have in their bank accounts, so [government officials] must be

involved."

Participants also agreed that the problem of government corruption is worsening rather

than decreasing.

One participant, describing the near-institutionalized practice of paying small bribes

to government officials for processing essential paperwork, said corrupt officials

appeared "hungrier" than in earlier years.

"We're having to pay more than before," the participant complained. "Ten

dollars used to be enough [for most transactions] but now they want more."

The increasing monetary demands from corrupt civil servants were suggested by one

seminar participant as harmful to the international competitiveness of Cambodian

companies.

"That's why the prices [of some goods] in Cambodia are much higher than in Vietnam

or Thailand," she said.

The preliminary findings of the World Bank survey indicate that private business

in Cambodia put little faith in the judicial branch of government interceding to

alleviate their concerns regarding corruption and personal safety.

A survey question asking respondents to rate how "quick, honest, fair and impartial"

they considered the judicial system evoked the responses "never" "seldom"

or "sometimes" from a full 82% of respondents.

Stone stressed that the survey findings divulged during the seminar were strictly

preliminary and deferred any comment until the final version of the survey results

are released later this year.