In his opening remarks at a three-day (Jul. 26-28) UNTAC-sponsored Foreign Direct
Investment Policy in Cambodia Seminar, H.E. Sam Rainsy, Minister of Finance clearly
defined an agenda for the future of a Cambodian market economy.
"Programs [were] adopted [by the new provisional national government] earlier
this month on the economy, legal framework and related financial issues," said
Rainsy. The programs are oriented towards developing Cambodia as a "market-oriented
country-to make sure the market functions well [with regard to] foreign trade, foreign
exchange and foreign investment."
Rainsy continued: "[We] must make the clarification of a market economy not
a jungle economy. The difference is: the rule of law-existance of a legal framework.
The new government wants to establish law and a country where the rule of law is
ensured and elaborated through the democratic process."
"The role of the state is to guarantee the rule of law...the most important
role is as referee and balancer-respecter of law" to create a "free and
fair tradition." He continued "the key word with reference to foreign investment
is transparency" if Cambodia wants to be "respected by everybody."
Rainsy called for an end to corruption and the establishment of fair business practices.
Foreign investors prefer to pay taxes legally rather than "endless arbitrary
contributions to people and institutions not legally entitled" to collect.
"The State will fulfill its obligations, keep its word vis-a-vis foreign investors.
As a matter of fact, corruption is incompatible with free and fair competition."
To "win a contract through corruption will gain undue market share and undue
"Welcome all foreign investors to Cambodia," Rainsy said, but "some
do not really want to take part in development." They "assume some selfish
roles to the detriment of the country. Murderers [have] contributed to the country
goods which are a nuisance: smuggling cigarettes, beer and wine." He added,
we "hope that in the future, a new breed of investors will take part in the
development of Cambodia."
Rainsy called for an assurance that the "host country benefit from technical
skills. Capital, technology and technical skills are necessary for development."
But Rainsy warned that Cambodia must be wary of detrimental investments. For example,
"Some investors dispose of industrial chemical waste in Cambodia. Few countries
want to receive waste and firms are looking for a desert with only sand and stone.
Cambodia is not really a geographical desert but a legal desert."
Cambodia must guard against "abuse of power, signing of unfair contracts,"
said Rainsy. He added that past contracts will be reviewed in three categories:1)
fair contracts which will continue to operate; 2) contracts which need amendment
will change to suit the environment and working conditions; and 3) contracts which
need to be cancelled: do not bring anything to Cambodia and harm the country. He
said that Cambodia "must make [agreeents] more balanced for investors and host
Outlining Cambodia's potential in labor and industries such as tourism, Rainsy said
that Cambodia must "take advantage of all factors. All projects must be on a
mutually beneficial basis. Real partnerships must be made." Cambodia must concentrate
on value added to national production: creating jobs, training people and bringing
management skills to the country.
Cambodia is in great need of capital invesment with a "guaranteed jurisdiction
which is fair [to] protect intellectual property rights [and] free and fair practices."
With such a climate, "serious investors will be much more happy and confident
in coming to Cambodia." My message to investors is "Cambodia is expecting
them and will be welcoming them."