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Cambodia's new government faces great challenges

The Editor
Managing Editor
Cambodian Online

 Information

24-Aug-2005
Last Edited

by Zhang Ruiling, Lei Bosong

   PHNOM PENH, Aug. 27 (Xinhuanet) -- Cambodia's third mandate government has titled itself as the government of employment, equity and efficiency and decided to adopt the "rectangular strategy".

   The main objective of the "rectangular strategy" is to improve and enhance the capacity of public institution, promote good governance and modernize economic infrastructure, with an aim to promote economic growth and employment generation, guarantee social equity and increase the effectiveness of the public sector.

   However, to implement the strategy and realize the goal, there are a lot of challenges facing the government.

   One year has passed away due to the political stalemate, the third mandate of the royal government headed by Hun Sen has only four years left to govern.

   The first test for the government is to seek to realize its goal of a sustainable GDP growth at 6 - 7 percent each year. The report of the International Monetary Fund (IMF) this month painted a grim outlook for the Cambodian economy, to forecast a plunge in Cambodia's economic growth to 4.3 percent in 2004 and then 1.9 percent in 2005 from 5.2 percent in 2003.

   To boost its ability to attract foreign investment is another challenge. Foreign direct investment in Cambodia has dropped 53.8 million US dollars in 2001 from 242.9 million in 1998, according to World Bank figures.

   Cambodia must strengthen its judiciary and push "faster and bolder, more diversified and in-depth reforms in public
administration," as said of Hun Sen, and to ban corruption and enact anti-corruption law as soon as possible, as well as to improve the dysfunctional judicial system which hindered foreign investors.

   "Governance remains a most serious problem in our opinion. Few countries rank lower than Cambodia on the corruption perception index," said IMF resident representative Robert Hagemann.

   On the other hand, to seek new resources of growth is also a challenge to the government. The IMF report said Cambodia's economy has become too reliant on just two sectors: garments and tourism.

   The garment sector, which comprises almost all of Cambodia's exports and created some 240,000 jobs, flourished but the IMF is forecasting that exports will drop by 11.5 percent in 2005 because of the country's lack of competitiveness and the termination of the international multi-fibre agreement (MFA) which offered quotas to developing countries.

   Hagemann warned that the country's economy was ill equipped to create jobs for the some 200,000 people forecast to enter the labor market in the coming years.

   Moreover, the high poverty rates were particularly troubling since Cambodia had received more aid per head than any other low income country in recent years. So far, Cambodia has near 35 percent of its 13 million population living under the poverty lines.

   In his recent speeches, Prime Minister Hun Sen put forward a laundry list of reforms including reducing the costs and time associated with importing and exporting goods.

   He ordered the Council for the Development of Cambodia (CDC) and other ministries and institutions "must strengthen their cooperation to make a real one-stop service" for the investors and asked the CDC to act as a broker to get authorizations and other licenses within a period of 28 days.

   Moreover, Hun Sen urged the public servants to change their way of working or their way of thinking in an effort to make the state more close to the people, more transparent, efficient and especially more open and responsive to people's needs.

   In March 2001, the government approved more than 100 concrete actions of good governance to be included in the Good Governance Action Plan. The Good Governance Action Plan covers seven components of actions from legal and judiciary reforms to the reforms of natural resource management. 

   The premier stressed that only if Cambodia pushes with the reforms, then "we can hope for freeing ourselves from poverty and hunger, and rebuilding the nation with pride and dignity."

   "If we get rid of the reforms we certainly will lose our chance and opportunity at hand now and will remain captured by the poverty, conflicts and endless uncertainties," he pointed out. 

   As Cambodia's Commerce Minister Cham Prasidh put forward: "Once we know the symptoms and the diseases, what is needed now is strong political will to undertake the necessary surgery operations. It is now time to take action."  Enditem

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