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EU should reconsider effects of its sanctions

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A Cambodian garment worker sews clothing at a factory in 2009. Post staff

EU should reconsider effects of its sanctions

Dear Editor,

The national election is now over, and it is decision time for the European Union (EU), which is considering sanctions against Cambodia.

Most prominently under consideration is the removal of trade benefits that are available under the Everything But Arms (EBA) initiative. But the EU should carefully consider the consequences of this punitive measure before making any decision.

Several weeks ago, I met with an EU delegation to discuss the situation in Cambodia. I was one of many stakeholders from the private sector with whom they met, and my message was a simple one – whatever political differences you have with the Royal Government of Cambodia, do not take actions that will primarily hurt the people of Cambodia.

Whether you agree or disagree with actions taken by the government, taking away EBA will hurt the economy and, ultimately, the people of the country. So it would be an ill-advised move.

According to press reports, this advice was uniformly given to the EU delegation by stakeholders from both the business community and labour unions. Ironically, this proposed action comes at a time when the business community has voted for Cambodia, as evidenced by a variety of economic indices including foreign direct investment (FDI) and an improved GDP.

Concerning Foreign Direct Investments, for example, a report by the National Bank of Cambodia indicates that there was an investment of $1.32 billion in the first half of this year – a 14 per cent increase over the same period last year.

This is remarkable as there usually is an economic slowdown in years in which there is a national election. Exports grew by 9.3 per cent in the same period of time. The GDP is likely to achieve its usual 7 per cent figure this year as well. So it strikes one as strange that the EU would be considering such an action like eliminating EBA.

There have been critics of virtually every national election. Ironically, the one election not criticised by the opposition and international critics was the 1993 UNTAC election. That lack of criticism likely occurred because it was an election where the United Nations deemed that the royalist party came in first place with the ruling party number two.

This judgment was made without notice taken of the irregularities in that election. So the fact is that criticisms were apparently muted because the international critics were happy with the result.

If international critics take issue with the government’s policies, the answer is to have more engagement with Cambodia, not less. This is a compelling reason for the EU to keep the EBA in place.

Sanctions like this would hurt the economy, and the negative trickle-down effect for the average Cambodian would be immediate and devastating.

Ironically, during its visit to Phnom Penh, the EU delegation commented that the elimination of EBA for Cambodia was the last resort.

In a statement issued by the mission at the end of its fact-finding mission, it said: “Removing Cambodia from the trading scheme is a measure of last resort …”

Last resort? Removal of EBA is no resort! It would only hurt the economy and people of Cambodia. This threat should be taken off the table.

Bretton G Sciaroni is a lawyer in Phnom Penh and active in a number of business associations.

The views expressed in this article are his alone and do not represent the views of any organisation

Send letters to: [email protected] or PO Box 146, Phnom Penh, Cambodia. The Post reserves the right to edit letters for clarity and length.
The views expressed above are solely the author’s and do not reflect any positions taken by The Phnom Penh Post.

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