SAM Rainsy warned Sihanouk-ville land speculators that Prince Ranarridh has
agreed to destroy walls around their plots of land, and return the land to the
The Finance Minister was speaking to reporters and
guests at the Foreign Correspondents' Club of Cambodia, on June 30 and his
comments were made in the context of a broader description of the overall
difficulties facing Cambodia as it tries to attract foreign investors, in spite
of the release of an investment law draft from the Council of Ministers.
One problem in Cambodia is land speculation, Rainsy
Sam Rainsy said: "We have to create industrial zones in the
region of Sihanoukville, but there is problem with land shortage because big
plots of land have been illegally appropriated by big traders, who illegally
bought those lands from the military and from provincial authorities.
I am very happy that our First Prime Minister, Norodom Ranariddh has said that
he doesn't care about the previous deals in the region of Sihanoukville.
"He will take a bulldozer, and he will destroy, he will push down all
those fences around those big plots of land to the sea, because they are
mountains, they are hills, they are a big portion of Cambodia, where some
businessmen have said that this is my property.
"Our First Prime Minister
said: 'I don't care, this is the property of the state, we will cancel all the
bad deals which have been made in Sihanoukville.'
" I think that this is
a very good encouragement to foreign investors."
Sam Rainsy said one
deterrent for prospective investors is the lack of cheap land. Land prices are
five times the price they should be, he said.
"I have an American
company, they want to build a factory to produce industrial jewelry. They say
why do I need to go to Cambodia? In Mexico, next door to the United States the
land is cheaper than in Cambodia, and Cambodia is a small
Rainsy said: "Speculation and money laundering explain why land
prices are so high in Cambodia.
"Following the so-called privatization of
1989, there was a sell-off of state property. The people who could afford to buy
at that time were speculators looking for easy profits. They bought the land and
they sit on it and expect to reap speculation profits."
reason why land prices are so high, is because many lands are frozen by those
speculators. Many of those speculators are involved in money laundering.
Cambodia is an ideal place for money laundering.
"People who are
involved in drug trafficking, in all kinds of illegal businesses, like Cambodia
very much. First because we have a cash economy, and because the legal framework
[here] is very weak.
"With so few rules and regulations, so many
loop-holes, lack of clarity, no transparency, [Cambodia] is a paradise for money
laundering. And property development, and buying land is a means to launder
money," Rainsy explained.
Rainsy said that the just completed draft
investment law "is a very attractive investment law."
the law he said: "I cannot imagine more attractive incentives. It gives very
generous incentives to investors."
Rainsy said: "Incentives are only one
aspect of the problem of trying to attract foreign investors.
five additional problems that we have to deal with if we want to attract
investors, if we want to attract investors with international standing, serious
foreign investors who are willing to commit themselves to the long term
development of Cambodia."
Rainsy said that in addition to land prices,
security, infrastructure, corruption and rule of law are problems that Cambodia
needs to tackle.
Rainsy explained that investors need both physical and
"Investors don't want to see a lot of soldiers, a lot
of armed people coming to ask for money. This is security. If you don't have
security in this broad sense you cannot attract foreign investors, "he said.
The second problem is infrastructure. Investors need roads, an airport,
a seaport, electricity, and running water, Rainsy said.
"You have to deal
with corruption in order to attract serious investors, because serious investors
want to be treated on an equal footing with other investors, to have fair
treatment." This is the third problem Rainsy explained.
incompatible with free and fair competition. Investors want to compete on
quality, on price. Those who are competitive should win public contracts, should
gain market share, etc.
"Corruption is just the contrary of the market
economy. Because even if you are not efficient, even if you are not cost
effective, you can win public contracts by bribing corrupt officials, so it is
not a favorable environment for serious investors when corruption is so
wide-spread, is such an institutionalized practice. Corruption is a deterrent to
"A large problem is a legal framework. But there are
many laws lacking, the land law, the labor law, the company law, the contract
law, the bankruptcy law, the arbitration procedure law, the administrative law.
"If there is no legal framework, no transparency, and this brings about
corruption and irregularities, this is not a favorable environment for foreign
investments," Rainsy said.