Representatives of the Kingdom's major foreign investors are disappointed at the
failure of Prime Minister Hun Sen to deliver on pledges made two months ago to improve
Cambodia's foreign investment climate.
Some fear that continued corruption will only further discourage overseas investment.
On Dec 21, 1999 Prime Minister Hun Sen promised participants of the Government-Private
Investment Sector Forum to take immediate measures to stamp out corrupt practices
and bureaucratic obstacles that he described as responsible for turning some of Cambodia's
foreign investors into "beggars."
Specifically, the Prime Minister accused Customs and Camcontrol officials at Cambodia's
major entry and exit points of levels of corruption and indolence that effectively
rendered certain officials "King of Pochentong (airport) [and] King of Sihanoukville
Two months later, the mood among investors who in December congratulated Hun Sen
for his commitment to a new relationship in which "I consider investors as my
boss" is considerably more downbeat.
"I'm not overjoyed," said Dominic Peterhaus, Chairman of the International
Business Club (IBC), regarding the fruits of Hun Sen's foreign investment initiatives.
According to Peterhaus, the consensus of the IBC's membership of 32 multinational
companies is that official attitudes and practices toward foreign investment remain
"So far nothing has changed," he said. "People [who administer the
process] have changed, but the process is the same."
Peterhaus's observations are echoed by Roger Tan, Secretary General of the Garment
Manufacturers Association of Cambodia.
"The intentions of the Prime Minister and the Cambodian government are sincere
and their plans are positive and welcome," Tan told the Post. "But the
reality is that the actual result isn't occurring in a way that would really encourage
new investment to come into Cambodia."
A foreign legal expert based in Phnom Penh, who asked not be identified, was more
direct in detailing the shortcomings of Hun Sen's foreign investment initiative.
"Things have actually gotten worse [since Dec 21]. The level of difficulty at
Customs has increased due to both slowness and corruption."
The legal expert identified both Customs and the Ministry of Commerce as areas where
corrupt practices have seen a definite upswing in the wake of the Prime Minister's
"Instead of being easier, procedures are now more difficult and costly ... These
[corrupt officials] are either afraid that the good times will stop [due to Hun Sen's
initiative] and so they're taking advantage of it, or they're convinced the good
days will never end."
However, such downbeat assessments of the Prime Minister's foreign investment drive
are by no means universal.
According to one air freight executive interviewed by the Post, results of the Prime
Minister's demand for faster processing of exports were seen within days of the Dec
"Freight that used to take more than thirty days to clear Customs is now being
done within three days," he said.
Kao Kim Hourn, Executive Director of the Cambodian Institute for Cooperation and
Peace which organized Cambodia's first international conference on foreign investment
in Dec 1999, cautioned investors not to be too hasty in their assessment of the Prime
"It's still too early to see the impact of the initiatives put forward by the
Prime Minister," Kim Hourn said. "But those facing difficulty with relation
to investment should raise the issue at the next investment forum."
Peterhaus indicated that the IBC was willing to see how the investment situation
developed over the next two months before "taking any strong action."
For some investors, however, the Prime Minister's initiatives were doomed from the
start in a country in which corruption defines the nature of private and public life.
"Corruption is too widespread in this country. ... Civil servants pay for their
jobs and have no choice but to make money from their positions guaranteeing the smooth
flow of documents and facilitating the movement of goods," said one jaded investor.
"I can't see how more meetings or another ten reports about the problem will
make any difference."