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New banking and investment laws by '94

New banking and investment laws by '94

ten years ago.jpg
ten years ago.jpg

 

 

New banking and investment laws by '94

 

The promise by Cambodia's new government to fundamentally transform the economy is

sending shudders through the investment community. Some contracts with foreign investors

signed with the previous administration are likely to be canceled amid charges that

the government is motivated by political revenge.

Senior government officials are embarking on a sound policy to eliminate the remnants

of Cambodia's previously centralized economy, analysts say, after a new leadership

trained in the West has taken control of virtually all key financial and economic

portfolios in recent weeks.

The new government, announced earlier this month, turned over most of the financial

and economic policy portfolios to the Royalist FUNCINPEC party.

World Bank and Asian Development Bank officials are currently in Phnom Penh advising

the new government as it rewrites existing laws.

Economy and Finance Minister Sam Rainsy, a French-trained economist, vowed that "the

first real budget in 20 years" would be submitted by January and that by 1995

a stringent budget, in line with IMF and World Bank austerity programs, would be

in effect.

NGOs begin a new chapter

Cambodia's army of aid workers is facing huge tasks and, according to some forecasts,

changed roles amid lawlessness on Phnom Penh's streets and the departure of UNTAC.

Despite extensive UN-initiated programs during the 18-month UNTAC period, NGOs point

to a mountain of remaining social, health and infrastructure problems. The long list

shows that UNTAC's work may be finished but NGOs have just began another chapter

of a very long book.

Several areas need urgent attention post-UNTAC. These include an estimated 6 to 10

million mines, the thousands of families still in desperate need of permanent homes,

massive social problems in reintegrating hundreds of thousands of recently repatriated

people, and the country's lamentable health system.

Representatives from World Vision International and Save the Children Fund Australia

also forecast changed roles for NGOs as bilateral money, once channeled through NGOs

during Cambodia's re-emergence from isolation, is allocated directly to the government

and well-established UN agencies.

Route 4 Rehab

The US Agency for International Development has agreed to provide $24 million to

rebuild Route 4, the main highway linking Phnom Penh to Sihanoukville, Cambodia's

main seaport.

Government officials in Phnom Penh are elated with the grant as they expect that

a rehabilitated Route 4 will boost investor confidence and advance plans to develop

a duty-free zone in Sihanoukville. It is also expected to encourage the growth of

export-oriented industries in Phnom Penh. Roadwork may begin as early as January

1994.

Riel rises against dollar

The riel appreciated significantly last week against the US dollar in what Minister

of Finance and Economics Sam Rainsy says is a reflection of "political stability"

in the country. The riel, which had been trading at between 2,600 and 2,700 per dollar

for several months, suddenly dropped to 2,000 per dollar before leveling off at 2,100

on Nov 16.

The riel's rise also affected prices on imported goods such as gasoline and cigarettes.

The price of a liter of gasoline dropped from 600 to 500 riels overnight. Rainsy

attributed political stability as the main factor of this "automatic drop"

which would help the living conditions of the majority.

Mother Theresa in Phnom Penh

The Albanian-born Nobel Peace Prize winner paid a brief visit to the capital from

November 10 to 12 after a five-day stay in Hanoi. This was her second visit to the

country and included calls on Premier Prince Norodom Ranariddh and Foreign Minister

Norodom Sirivuth. The world-renowned "friend of all the poor" spent most

of her time with her nine fellow Sisters of Charity who maintain two communities

- one in Phnom Penh on Monivong Blvd and a second in Chan Chao past the airport.

Problems lie in the pipes

Treated water from the rotting Phnom Penh municipal water system can be contaminated

just 100 meters from the pumping station because the pipes are fractured.

Last year, UNDP and the World Bank took over responsibility for the city's water

from Oxfam. The lack of technical expertise has made it difficult to maintain or

convert the system. Efforts have only just begun to repair the pipe network.

Officials estimate that only 16 percent of Phnom Penh residents have access to potable

water. The figure for the provinces is 18 percent.

Over the last two years France has helped the capital with repairs to the tanks and

water station, and earlier this year the Japanese International Cooperation Agency

(JICA) started surveying the water needs of the city with a view to designing a new

system.

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