IF the Cambodian government has rejected any interest in protecting the legitimate rights of its citizens in relation to the escalating Boeung Kak lake fiasco, then perhaps it should consider the serious economic fallout caused by the continuing standoff between residents and Shukaku Inc.
Were the government to be viewing the dispute in terms of long-term economics it would surely realise this latest land rights embarrassment has the potential to cause serious damage.
The possibility that the World Bank could withdraw all support for Cambodia in the land sector should in itself raise alarm bells within the government.
The property market has been among the last major sectors of the economy to recover from the economic crisis and anything that stalls the process of land titling in Cambodia will only help further entrench this malaise.
Although the World Bank has rightly received heavy criticism for ignoring the warning signs in relation to Boeung Kak, its Cambodia Land Management and Administration Project did lead to 1.2 million Cambodians receiving land titles between 2002 and 2009.
These people not only gained a legally recognised right to their land, their land titles serve as a licence to sell property and buyers to purchase with security, absolute necessities in any buoyant property market.
Without World Bank support in the land sector, and the possibility other supporting organisations may be scared off, much-needed land-titling will continue to stall in Cambodia and so will the possibility for thousands of property transactions.
For private individuals, no land title means a complete lack of financial security and no incentive to pour capital into their homes. As a result, property too often cannot serve as an asset in Cambodia which erodes the possibility for prosperity and in turn hurts the overall economy.
Also damaging is the negative PR that the Boeung Kak debacle has generated, especially in recent weeks. How many serious investors in Cambodia have read the recent headlines and wondered whether they might avoid the country entirely?
Furthermore, risk analysts that produce assessments of Cambodia will always raise country risk because of cases like Boeung Kak and these often serve as key sources of information for would-be investors who despise risk.
Incidents like Boeung Kak highlight Cambodia’s persistent land-titling problems, point to uncertainty due to a lack of clear government policy, raise country risk and therefore generate the possibility in the minds of investors that something similar could happen to them.
The overall perception associated with all of this economic negativity is that responsible countries with clear, fair and investor-friendly policies simply do not have incidents like Boeung Kak. The fact this is still happening in Cambodia serves as an unfortunate reminder the country is still a long way from being a reliable place to do business.