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EBA withdrawal provides ‘opportunity for growth’

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Garment workers in Phnom Penh’s Sen Sok district in 2017. The withdrawal of the EU’s Everything But Arms trade preferences from Cambodia is likely to hit the garment factory sector hardest. Hong Menea

EBA withdrawal provides ‘opportunity for growth’

Economic analyst Khoun Bunny said on Tuesday that the loss of the EU’s preferential Everything But Arms (EBA) agreement could be a golden opportunity for Cambodia to show it deserved to be ranked sixth on the list of the world’s fastest-growing economies.

Government spokesman Phay Siphan also expressed optimism that losing access to EBA could “create a new history for Cambodia”, as Prime Minister Hun Sen said the Kingdom’s “independence and sovereignty must not be exchanged for anything”.

Khoun​ Bunny said the withdrawal of EBA could allow the government to make reforms to push Cambodia to increase its potential.

“Cambodia [can] show that it can survive independently, reducing its reliance on loans and that we don’t need to depend hugely on foreign [aid] like in the past,” he said.

Phay Siphan said: “We believe that the positive impact and sustainability [from EBA withdrawal] will create a new history for Cambodia and the government to have the opportunity to be independent, sovereign and free from interference and interruption by foes, near and far,” he said.

On Monday, the EU announced that it had begun the 18-month process of withdrawing Cambodia’s access to EBA over what it perceived to be a “deterioration of democracy [and] respect for human rights”.

The EBA agreement gives least developing status countries duty and tariff free imports to the 28-nation bloc.

In what could be a reaction to the EU’s decision, Hun Sen took to Facebook on Tuesday to reiterate that Cambodia’s “independence and sovereignty must not be exchanged for anything”.

He said Cambodia’s political, social and economic situation would improve due to the increase in taxes collected.

The prime minister said the Kingdom must not rely on foreign aid but wanted to be “good friends with all partner countries who want to see Cambodia prosperous”.

He thanked the business community, vendors and investors for fulfilling their tax obligations in the Kingdom.

He said Cambodia had in the past experienced economic sanctions but had moved beyond them and poverty to become a country with annual economic growth of seven per cent.

He said the Kingdom would move out of lower middle-income status to become an upper middle-income nation by 2030 and become a high-income nation by 2050.

Based on this argument, Hun Sen said: “Cambodia cannot depend only on foreign aid, and it must not exchange its independence and sovereignty for anything.

“But we want to be good friends with all partner countries who want to see Cambodia prosperous going forward without interfering in its internal affairs,” he said.

On Tuesday, the government issued a statement expressing “its deep regret over the European Commission’s decision on Monday to launch the formal procedure for the temporary withdrawal of the EBA preferences for Cambodia”.

“The government considers this decision as an extreme injustice when the European Commission disregards the concrete measures and substantial progresses made by the government in its adherence and commitment to the implementation of the 15 UN and ILO core Conventions, which are the pre-conditions to the continuation of the EBA,” it said.

The statement added: “We regret that the European Commission has chosen to believe a handful of dishonest politicians who continuously try to find every means to destroy their own country and their people rather than respecting the voices of those who are legitimately elected.”

Political analyst Lao Mong Hay said the EU had taken note of the positive steps the government has taken towards honouring its human rights obligations under the EBA scheme.

These, he said, included the opening up of democratic space for civil society and the amendment to the Law on Political Parties that gives the remaining 116 banned CNRP members the possibility to resume their political activities.

But it was very doubtful whether these steps would prove sufficiently satisfactory to the EU.

“The government may have to do much more, however, such as releasing Kem Sokha [from his treason charge] to be able to keep the EBA,” he said.

Kem Sokha, the president of the court-dissolved opposition Cambodia National Rescue Party, is currently on bail awaiting trial on the charge.

The US Embassy in Phnom Penh on Tuesday released a statement in support of the step taken by the EU.

“We share the EU’s concerns about serious violations of freedom of expression, internationally recognised labour rights and freedom of association."

“The United States calls on Cambodian leaders to restore a true, multi-party democracy, as enshrined in Cambodia’s constitution."

“We also call on Cambodia to drop the charges against Kem Sokha and all arbitrary charges against other political prisoners, and to allow independent trade unions, media organisations, and other elements of civil society to operate without undue restrictions,” it said.

The statement added that Cambodian leaders should put the wellbeing of the country before personal and political interests.

However, the European Chamber of Commerce (EuroCham) in Cambodia expressed its disappointment with the EU decision on Monday.

It said, “the launch of the EBA withdrawal process by the European Council is counterproductive to Cambodia’s socio-economic transformation”.

“This decision not only jeopardises the past and future achievements of the [EU-Cambodia] partnership, but also other development initiatives funded by the EU over the last two decades which have helped to vastly improve the socio-economic status of millions of Cambodians.

Government spokesman Siphan on Tuesday said he believed the EU’s decision was taken for “geopolitical reasons”.

In response to the US Embassy’s support for the start of the withdrawal, Siphan said the US and the EU were “ready to interfere in Cambodian affairs”.decision as an extreme injustice when the European Commission disregards the

concrete measures and substantial progresses made by the government in its adherence and commitment to the implementation of the 15 UN and ILO core Conventions, which are the pre-conditions to the continuation of the EBA,” it said.

The statement added: “We regret that the European Commission has chosen to believe a handful of dishonest politicians who continuously try to find every means to destroy their own country and their people rather than respecting the voices of those who are legitimately elected.”

Political analyst Lao Mong Hay said the EU had taken note of the positive steps the government has taken towards honouring its human rights obligations under the EBA scheme.

These, he said, included the opening up of democratic space for civil society and the amendment to the Law on Political Parties that gives the remaining 116 banned CNRP members the possibility to resume their political activities.

But it was very doubtful whether these steps would prove sufficiently satisfactory to the EU.

“The government may have to do much more, however, such as releasing Kem Sokha [from his treason charge] to be able to keep the EBA,” he said.

Kem Sokha, the president of the court-dissolved opposition Cambodia National Rescue Party, is currently on bail awaiting trial on the charge.

The US Embassy in Phnom Penh on Tuesday released a statement in support of the step taken by the EU.

“We share the EU’s concerns about serious violations of freedom of expression, internationally recognised labour rights and freedom of association.

“The United States calls on Cambodian leaders to restore a true, multi-party democracy, as enshrined in Cambodia’s constitution.

“We also call on Cambodia to drop the charges against Kem Sokha and all arbitrary charges against other political prisoners, and to allow independent trade unions, media organisations, and other elements of civil society to operate without undue restrictions,” it said.

The statement added that Cambodian leaders should put the wellbeing of the country before personal and political interests.

However, the European Chamber of Commerce (EuroCham) in Cambodia expressed its disappointment with the EU decision on Monday.

It said, “the launch of the EBA withdrawal process by the European Council is counterproductive to Cambodia’s socio-economic transformation”.

“This decision not only jeopardises the past and future achievements of the [EU-Cambodia] partnership, but also other development initiatives funded by the EU over the last two decades which have helped to vastly improve the socio-economic status of millions of Cambodians."

Government spokesman Phay Siphan on Tuesday said he believed the EU’s decision was taken for “geopolitical reasons”.

In response to the US Embassy’s support for the start of the withdrawal, Siphan said the US and the EU were “ready to interfere in Cambodian affairs”.

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