Cambodian anti-corruption law no magic bullet, says World Bank

Apr 5, 2007
DPA

Phnom Penh - Long-awaited Cambodian anti-corruption legislation was just part of a package of necessary reforms and not a 'magic bullet' to ensure revenues such as from oil and gas were harnessed effectively, a senior World Bank official said Thursday.

Speaking at the launch of the bank's East Asia and Pacific update for April entitled 10 Years After the Crisis, Cambodian World Bank country manager Nisha Agrawal said the way expected new revenues such as oil and gas were used by the government 'were very important for Cambodia's future.'

But she added that focusing on anti-corruption legislation alone was a mistake and oversimplified the situation in developing nations such as Cambodia.

'All an independent anti-corruption body can do is receive allegations. You need an independent judiciary to make an anti-corruption law work. You can't just pass a law and have an independent judiciary overnight,' she said.

'Public financial management reform is as important, or perhaps more so, than the anti-corruption law,' she said, adding that the World Bank viewed the progress made by the Cambodian government on that aspect as positive.

Cambodia expects to begin oil and gas production from potentially rich offshore deposits by 2010 and economists say how those revenues are used could make or break the Cambodian economy.

One stumbling block to development critics have pointed out is endemic corruption, and the government promised donors that anti-corruption legislation would go before parliament by the end of last year, but failed to meet the deadline, causing some donors to threaten to withold funding if delays continued.

'We would like to see people think about the whole package of good governance. There is no magic bullet,' Agrawal said.

She said in regards to oil, there were positive examples such as Indonesia, Malaysia and Botswana and negative examples such as Nigeria.

'It is really for the Cambodian people themselves to decide what model they will follow. Obviously, we hope they choose a good model,' she said.

The World Bank said in a country specific press release that Cambodia's economic performance had continued to be robust, with real gross domestic product (GDP) growth projected at about 10.5 per cent - the third consecutive year of double digit growth.

It added that the four economic growth pillars of garments, tourism, construction and agriculture were expected to continue to thrive in 2007, with growth in Foreign Direct Investment (FDI) expected to be sustained and oil and gas 'likely to bring about even higher growth.'

Per capita GDP stood at 480 dollars in 2006 - a figure Agrawal said Cambodia could hope to boost significantly as oil and gas revenues began to enter the economy.

Continued urbanisation, if properly planned, could also benefit the country, according to the report. Cambodia's projected rates of urbanisation were for a 291 per cent increase by 2030, but 72 per cent of those living in urban areas are currently classed as slum dwellers by the bank.

Agrawal said besides as yet untapped industries such as oil and gas, established industries such as tourism also had the potential to be more efficient contributors to the economy by taking on a more pro-poor focus.

'For instance, it's not just about how we can get more tourists ... but how they can benefit Cambodia more,' she said.