Europe, Corruption and Electricity on Agenda at Gov’t-Business Forum

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Top business representatives including Kith Meng and Bretton Sciaroni raised corruption, electricity prices and the potential loss of European markets for export as the most pressing concerns for Cambodian businesses during the high-level Government-Private Sector Forum with Prime Minister Hun Sen on Friday.

The meeting was held at Hun Sen’s office in Phnom Penh, officially known as “The Peace Palace,” amid concerns over the E.U. moving to suspend preferential trade with Cambodia under the Everything But Arms (EBA) agreement.

Hun Sen told the forum that Cambodia would achieve World Bank upper-middle income status by 2030 — an ambitious target that would require tripling gross national income per capita in a decade — even without the EBA.

“If we need to tie a krama around our waists in order to eat less, we will do it. We have to do so in order to protect the independence of our country,” Hun Sen said, explaining that pride was more important than trade concessions. “A person who bows their head and licks the feet of others to gain favor is not fit to be a leader.”

European markets buy about 40 percent of Cambodia’s exports. The U.S., which has also threatened to remove tariff-free status for Cambodia, purchases a further 20 percent and has also threatened to remove Cambodia’s tariff-free status.

The E.U. began an 18-month process in February to assess Cambodia’s ongoing eligibility for duty-free trade access to the E.U. under the EBA, claiming violations of the scheme’s stipulations related to human rights and democracy. Civil society organizations have called on the government to meet the EU’s demands in order to avoid causing economic hardship for many Cambodians.

Bretton Sciaroni, chairman of the International Business Chamber of Commerce, said recent government reforms had improved the business environment but there was more to be done to implement regulations to help modernize the sector. He said that weak implementation of the law often caused unequal competition.

A more stable electricity supply and more reasonable prices, as well as further work to prevent corruption, were needed to encourage investors, he added.

Garment Manufacturers Association in Cambodia chairman Van Sou Ieng said that the government had so far played a key role in making Cambodian factories competitive with neighboring countries. However, the potential loss of the EBA now required a constructive response, he told the forum.

“We are in a world that keeps changing, keeps developing,” Sou Ieng said.

“For example the U.K.’s withdrawal from the EU, the trade war between the U.S. and China, and the EU’s suspension of the EBA. It requires the government to have an immediate and brave response,” he said.

Cambodia Chamber of Commerce president Kith Meng expressed support for the government’s reforms and asked that it work to create more export markets.

“I respectfully request the opening of markets in the E.U., Middle East, Africa, Japan and Korea,” Meng said, calling for the forum to be held every year.

In response, Hun Sen cited recent reforms such as a reduction in fees for imports and exports and streamlining of customs. Regarding recent electricity shortages, Hun Sen reiterated his commitment to source Turkish “powerships” as a fix.

This article was translated from Khmer edition.

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