T HE Council of Ministers has passed a draft investment law put forward by the

Cambodia Development Council and the bill will now be sent to the National

Assembly for approval.

Gen Tol Las, secretary general of the National

Assembly, said he had not yet received the law and the earliest it is likely to

be approved by lawmarkers is in the third week of July at an extraordinary

session.

The adoption of the CDC draft ends months of government

political infighting over the law, with numerous competing version being

circulated.

However, despite an investment law now finally nearing

approval, both Finance Minister Sam Rainsy and a well-connected expat

businessman cautioned that it was unlikely to spark a new economic dawn for

thecountry.

Rainsy told the Post: "The law is necessary but not in

itself sufficient to stimulate investment."

He said that problems of

security, poor infrastructure, high land prices and an inadequate legal frame

work must be tackled as well before Cambodia becomes a really attractive

investment prospect.

There have been no new investment applications this

year, as businessmen have reserved judgement pending seeing the final shape of

the investment legilsation.

But the businessman, who declined to be

named, warned that investors will still be unlikely to come down off the fence.

He said: "The million dollar question is about whether the government is

perceived to be stable or not."

A copy of the draft approved by the

Council of Ministers was obtained by the Post. It has substantial incentives for

investors, including a profits tax of only 9 percent and large categories for

100 percent exemptions from import duties.

Investors are required to

register new projects with the CDC - described as a "one-stop shop" - and are

guaranteed a decision within 45 days. If no decision is forthcoming, after 45

days the project is considered approved.

While foreign ownership of land

is outlawed by the constitution, the CDC draft allows investors to rent land for

up to 70 year periods.

The businessman criticized the draft for not

specifying laying down criteria the CDC would judge whether to pass an

application or not. The lack of clarity on that point he said left a large

loophole which could be exploited by the corrupt.

But he added:

"Over-shadowing all criticism that could made of the draft is the fact a piece

of legislation has finally been adopted that is the main thing."

Sources

said that devious political maneuvres resulted in the draft drawn up by the

Finance Ministry never reaching the Council of Ministers for

consideration.

However, publicly Rainsy was not critical, saying he had

been at the meeting when the draft was passed, adding: "It is a compromise which

takes in everybody's point of view."

Earlier an independent Western

analyst criticized the CDC draft as "almost duplicating all the worst provisions

of [Thailand's] Board of Investment law." CDC representatives were unavailable

for comment.