PRIME Minister Hun Sen surprised participants at a Dec 21 Government-Private
Investment Sector Forum by decrying the corrosive effect of official corruption
on efforts to expand the Kingdom's foreign investment base.
investors have been turned into beggars ... by ministries that demand $1,000,
$2,000 and sometimes $10,000 to approve investments," the Prime Minister
complained during a two-hour speech. "The real enemy [of increasing foreign
investment] is corruption."
The Forum, held at the Intercontinental Hotel
and attended by approximately 200 government and private sector representatives,
was a follow-up to the Kingdom's first conference on investment organized by the
Cambodian Institute for Cooperation and Peace on Dec 2-3.
Hun Sen singled
out Customs and Camcontrol officials at Sihanoukville Port and Pochentong
Airport for instituting arbitrary and illegal charges for export
"Customs officials routinely start work at 3:00 pm and finish
at 5:00 pm, and in some places [investors] spend $2,000-$4,000 for [clearance to
ship] a container," he said. Customs and Camcontrol officials "no longer have
the right to be 'King of Pochentong' and 'King of Sihanoukville'."
Sen further promised to reduce red tape and opportunities for bribery by
eliminating Economic Police approval for export clearance and by threatening to
fire Customs and Camcontrol officials unable or unwilling to approve export
shipments in one workday.
Pointing to Ministry of Finance statistics
indicating that only $2.5 billion out of a promised $8 billion of foreign
investment between 1994 and 1999 had been realized, Hun Sen called for a "new
relationship" between government and foreign investors.
A key component
of that "new relationship" was Hun Sen's announcement of a new "one-stop" policy
for foreign investment into the Kingdom, giving the Council for the Development
of Cambodia (CDC) sole responsibility for approving foreign investment
In addition, the Prime Minister promised that foreign
investment applications would be processed and approved by CDC within a maximum
of 28 days, a far cry from what Hun Sen described as the current "45 days,
sometimes multiplied by five" experienced by foreign investors.
"new relationship" between the private sector and the Royal Government, Hun Sen
warned of a zero-tolerance policy against corruption by both government
officials and foreign investors.
"If somebody wants to squeeze you for
money, I can find them, just tell me," Hun Sen told the assembled crowd, which
burst into spontaneous applause twice during his speech. "But don't give
[government officials] any bribes because those who give or receive bribes are
The Prime Minister concluded his two-hour speech by calling
for biennial meetings between himself and representatives of the private sector
similar to the quarterly meetings between the government and international
"Now I consider investors as my boss," he joked. "Before
you were the beggars, but not anymore ... you are the boss and CDC is your
Although allotted time for feedback from private sector
representatives was limited, the response of the Chairman of the Garment Factory
Association reflected the mood of the participants.
answered 90% of my concerns," he enthused.
Meanwhile, in an effort to
counter the Prime Minister's speech to foreign investors on Dec 21, opposition
leader Sam Rainsy delivered his own critique of the government's economic
performance in a speech entitled "Real Measures to Alleviate Poverty in
Cambodia" at the Royal Phnom Penh Hotel on Dec 22.
Rainsy attempted to
convene at the Senate building but was prevented from doing so. Senate Second
Vice President Nhek Bun Chhay refused the request to use the Senate saying that
the application had not been submitted early enough.
Rainsy spoke for
about two hours to a crowd of diplomats and journalists on Cambodia's "economic
mismanagement" by corrupt officials who serve to pervert the state's "natural
Drawing comparisons with neighboring Thailand, Rainsy
described Cambodia's $260 GDP per capita as "ten times less than the Thai
[figure] ... Thirty years ago Thailand and Cambodia [had] about the same
[economic indicators]," he added.
Rainsy labeled recent government fiscal
stimulus initiatives, including the provision of tax incentives for foreign
businesses and the country's new value added tax (VAT), as "cosmetic",
ill-conceived revenue raisers that did little to illuminate the economic
horizons of unemployed Cambodians.
Hun Sen's "New Deal"
- A promised crackdown on corrupt Customs and Camcontrol
- The immediate introduction of a "One-Stop" process for
foreign investment applications and visa applications for foreign
- Investment approval within a guaranteed 28-day
- One-day export approval by Customs/Camcontrol
- Elimination of Economic Police approval from export
- Application of Art. 27 and Art 28 of the Immigration Law
permitting investors to acquire resident visas and/or naturalized Cambodian