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Logo of Phnom Penh Post newspaper Phnom Penh Post - Investors question PM's anti-corruption initiative

Investors question PM's anti-corruption initiative

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

(port)."

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

frozen.

"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

announced initiative.

"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

21 declaration.

"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

Minister's initiative.

"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."

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