PHNOM PENH (AFP) - - Cambodia's private sector Tuesday urged the government to allow foreign ownership of certain properties like apartments or factories, saying a liberalised real estate market would spur economic growth.
Under the current rules, foreign property investments must be made in the name of a Cambodian national, and many are unwilling to risk losing their assets to unscrupulous local partners.
While Cambodia's investment law was amended in 2005 to allow foreign ownership of permanent fixtures, the legislation has yet to be implemented and the initiative has floundered.
"There are several reasons for urgent action," said Bretton Sciaroni, an American lawyer who serves as the chairman of the International Business Club and was speaking Tuesday at a meeting between the private sector and government.
The measure would further develop Cambodia's real estate market, taking advantage of a current boom and making the country competitive with its neighbours, which allow foreigners to own apartments or condominiums.
Vast new building projects have bloomed in the past few years, including a number of sprawling satellite cities worth billions of dollars that when constructed will radically alter the face of the capital.
"This is already a sector of the economy that is dynamic, but foreign ownership of apartments, condominiums and other such structures on the land will help spur further economic growth," Sciaroni said.
"Such a regulatory development will provide a dramatic indication that Cambodia has an investor-friendly environment," he added.
After decades of turmoil, Cambodia has emerged as a rising economy in the region -- posting an average of 11 percent growth over the past three years on the back of strong tourism and garment sectors.
But officials warn that the country, which still relies on international aid for half of its annual budget, must diversify by seeking more varied foreign investments.
"There are other sectors we are trying to encourage, but we have to find out what are the sectors where we can be competitive," Commerce Minister Cham Prasidh told AFP in an interview last week.
"If we try to produce the same thing as Thailand or Malaysia, it will be very difficult," he added.
Under the current rules, foreign property investments must be made in the name of a Cambodian national, and many are unwilling to risk losing their assets to unscrupulous local partners.
While Cambodia's investment law was amended in 2005 to allow foreign ownership of permanent fixtures, the legislation has yet to be implemented and the initiative has floundered.
"There are several reasons for urgent action," said Bretton Sciaroni, an American lawyer who serves as the chairman of the International Business Club and was speaking Tuesday at a meeting between the private sector and government.
The measure would further develop Cambodia's real estate market, taking advantage of a current boom and making the country competitive with its neighbours, which allow foreigners to own apartments or condominiums.
Vast new building projects have bloomed in the past few years, including a number of sprawling satellite cities worth billions of dollars that when constructed will radically alter the face of the capital.
"This is already a sector of the economy that is dynamic, but foreign ownership of apartments, condominiums and other such structures on the land will help spur further economic growth," Sciaroni said.
"Such a regulatory development will provide a dramatic indication that Cambodia has an investor-friendly environment," he added.
After decades of turmoil, Cambodia has emerged as a rising economy in the region -- posting an average of 11 percent growth over the past three years on the back of strong tourism and garment sectors.
But officials warn that the country, which still relies on international aid for half of its annual budget, must diversify by seeking more varied foreign investments.
"There are other sectors we are trying to encourage, but we have to find out what are the sectors where we can be competitive," Commerce Minister Cham Prasidh told AFP in an interview last week.
"If we try to produce the same thing as Thailand or Malaysia, it will be very difficult," he added.
8 comments:
I dont agree with your idea Sciaroni. You are only focusing on the profit and increasing your own wealth and your foreign mates.
If the ownership of land and other real estate is legally provided to the foreigners, the Cambodia will soon or later become the foreign territory. Then there will be no Cambodian culture anymore. The Cambodia is too small compare to yours. How many Cambodian can afford the price, of course not much but foreigners, expecially Chinisess (1.4 billion).
If that is the case, not very far, the Cambodian will become the ethnic in own country.
LHM
Sciaroni, you can lease up to 50 years or 99 years or for your life if you want to own our land in substance, otherwise you can apply to be Cambodian citizen, that is not very difficult if you are honest and ethical business man.
Let me try to understand Mr. Bretton Sciaroni's idea correctly!
If the foreigner investor are allowed to own tiny Cambodian real estate and with their dollar buying power and it will definitely drive up Cambodian real estate market price which in turn will drive up the cost of living and then the cost of living will be pass on to Cambodian export products which will make it more expensive than any other country in the region! This would be the kiss of death for Cambodian garment sector which dirt poor Cambodian work depend their life on!
If average Cambodian workers make about 50 dollars a month or even less and can they afford to live in those newly build apartments or condominiums? I don't think so! If this is the case, who will live in those newly build apartments or condominiums? It is for the foreigners of course who can afford to pay in dollars!
I have a sad feeling to see Cambodian people are being displaced in the name of “tourism and economic growth” until there are no more Cambodian people to be displaced because most of them will die of hopelessness, drinking problem, family problems, social problem, and the rest of Cambodian people will give up hope for the lack of opportunity to do anything meaningful to help their family!
Please don't turn Cambodia into another Hawaiian Island because if you go to Hawaiian Island you will see the foreigners outnumber the Hawaiian indigenous people! Well actually most Hawaiian people don't even live in Hawaii anymore because it is too expensive to live in Hawaii!
Now if Cambodia real estate is so expensive where can Cambodian people afford to live?
On the moon or Mars!
Low-income families often face a range of “hidden” costs of poverty – costs that do not get widespread attention – that can serve to keep a family poor or drive it deeper into poverty. For example, simply getting to work is disproportionately more costly and time-consuming for low-wage workers. In addition, low-income families living in economically isolated rural and urban communities often face higher costs of living based on where they live and have fewer choices of where to spend limited resources. Such families often are “captive consumers”, paying higher prices for inferior basic goods and services than their suburban counterparts.
Substance abuse and domestic violence are additional individual and family problems that can affect whether a family lives in poverty. These problems may be reflected in lost productivity and high health costs. They not only impair the ability to work, but also affect the parenting process, which can hinder child development. As a result, children may enter school without the cognitive, social and emotional skills and competencies they need to succeed, setting the stage for increased placement in special education, grade retention and ultimately school drop-out. Recent studies found that women who have been physically abused are at higher risk for depression, and that those who are at higher risk for depression are more likely to report drug use.
Mr. Sciaroni ! your idea is the bomb for Cambodia. I would like to ask you why the US Congress pass the law not to allow the Dubai-based company from United Arab Emirates, to operate ports in the US? I think any nation has the reaseon not to allow the foreigner to own property. America is a big country and is very powerful in the world. So why they are afraid of small country like United Arab Emirates? I think the US Conress has the answer for Mr. Sciaroni. As to Cambodia, it is a tiny, weak and poor country. So if foreigners are allowed to have onwership in land in Cambodia, soon this country will belong to the Vietnamese, Chinese and Thais. The economic growth has nothing to do with the ownership of the land by foreigners. Cambodian law allows foreigners to lease land up to 90 years, so itm is enough for the investers to do business in this Country.
Well, it's good to be careful, but it's not wise to be always on defensive mode by rejecting any possibility and letting opportunities pass by once and every time. Comments above reflected this trend...
We can consider this suggestion by Mr. Sciaroni as a fresh option, and redefine it in such a way that benefits the country. There are plenty of tools could be employed to protect the national interest while getting the benefits from the abundon of liquidity in the international market.
In one way, it is a good way to attract FDI. We could do it step by step targeting certain sectors at different levels of ownership and regulations (say at whole sale?) and see the impacts. Then, we can redefine regulations or expand the scheme or abandon it at all (if this policy is too bad).
Development is a process of learning and long undertaking. One mistake would not always jeopadise the whole process. But, only when we are confident and have trust in our own people and own government. This way, we can learn how to make a balanced view on anything and help contribute to building our country future. Then you'll find heroes in simple people and good policies in poor government like Cambodian RGC... Not just in the US or Europe...
All the previous posts are right and correct. Foreign land ownership in a small country such as Cambodia will drive prices up and Cambodian land ownership out of existence. The present options, e. g. 99-year lease, or becoming a Khmer citizen should be sufficient for the time being. Look at Switzerland. You can only own Condos but no land, the same in Thailand. Condos might be a different thing since those new buildings going up aren't affordable for the average Khmer anyway, plus there is only a limited market for them. So those buildings provide jobs. So speaks a Barang.
Cambodia is a late starter, now it is a chance to do it right with the masterplan for the city and the city infrastructures. We must learn from other countries' problems and use it to improve for our advantage with tourism in mind. Think!!!!
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