Cambodian passengers sit on top of pickup truck driven past an unfinished building in Phnom Penh, Cambodia, Monday, Sept. 3, 2007. Investors pushed the Cambodian government to allow foreign ownership on property Tuesday, saying such a step is important for advancing economic growth in the country. (AP Photo/Heng Sinith)Wednesday, September 05, 2007
AFP
PHNOM PENH: Cambodia’s private sector met Tuesday with government officials for talks on the future of the economy, with a clear call from businesses for the country to seek more foreign investment.
The underlying point from business leaders was that investment must be encouraged, even if that meant loosening controls in sectors on which the government has historically kept a firm grip.
Chief among these is the country’s real estate market, which in the past few years has enjoyed an unprecedented boom as land prices soar and dozens of building projects get underway in the capital.
Business people have urged the government to deepen its investment base by opening property ownership to foreigners for the first time — a measure that many expect could dump tens of millions of dollars into the economy and spur on greater industrial 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.
“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,” said Bretton Sciaroni, an American lawyer who serves as the chairman of the International Business Club.
“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 these economic pillars are by no means insulated from growing regional competition, and officials said moves must be made to protect the gains made over nearly a decade of rapid expansion.
Cambodia’s 2.5 billion-dollar textile industry has posted double-digit export growth year-on-year and employs some 350,000 workers, making it the country’s largest industrial operation.
But it also continues to be buffeted by labour disputes which will become especially critical next year when restrictions against Chinese garment exports expire, forcing Cambodia into greater competition with this Asian giant.
“In short, there are too many unions,” said Van Sou Ieng of the Garment Manufacturers Association of Cambodia (GMAC), urging greater government regulation of the more than 1,000 workers’ groups.
Illegal strikes, sometimes as many as two a day, and repercussions against workers who do not walk off the job are also endemic, he told government leaders.
“The frequency of these occurrences ... is becoming alarming, and if left unattended and unresolved, they will destroy Cambodia’s reputation for attracting and maintaining investors,” he said.
The tourism sector, which has also enjoyed significant yearly growth, must also adapt if it is to attract both visitors and investors, business leaders said.
Already, several private companies have been granted licenses to develop Cambodia’s islands off its southern coast as the country tries to scale up its resort offerings.
Officials Tuesday also mooted for the first time the revival of a national air carrier that is hoped to take advantage of growing regional tourism.
The country’s last national carrier, Royal Air Cambodge, was shuttered in 2001 after running up losses of 30 million dollars.
Domestic air routes are expected to prove vital to developing some of Cambodia’s more remote locations, as well as encouraging travelers to seek sights beyond the famed Angkor temples in northwest Cambodia, which remain its most popular tourist draw.
“National carriers are an important tool for promoting destination tourism for any country,” said Ho Vandy, president of the Cambodian Association of Travel Agents.
The underlying point from business leaders was that investment must be encouraged, even if that meant loosening controls in sectors on which the government has historically kept a firm grip.
Chief among these is the country’s real estate market, which in the past few years has enjoyed an unprecedented boom as land prices soar and dozens of building projects get underway in the capital.
Business people have urged the government to deepen its investment base by opening property ownership to foreigners for the first time — a measure that many expect could dump tens of millions of dollars into the economy and spur on greater industrial 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.
“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,” said Bretton Sciaroni, an American lawyer who serves as the chairman of the International Business Club.
“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 these economic pillars are by no means insulated from growing regional competition, and officials said moves must be made to protect the gains made over nearly a decade of rapid expansion.
Cambodia’s 2.5 billion-dollar textile industry has posted double-digit export growth year-on-year and employs some 350,000 workers, making it the country’s largest industrial operation.
But it also continues to be buffeted by labour disputes which will become especially critical next year when restrictions against Chinese garment exports expire, forcing Cambodia into greater competition with this Asian giant.
“In short, there are too many unions,” said Van Sou Ieng of the Garment Manufacturers Association of Cambodia (GMAC), urging greater government regulation of the more than 1,000 workers’ groups.
Illegal strikes, sometimes as many as two a day, and repercussions against workers who do not walk off the job are also endemic, he told government leaders.
“The frequency of these occurrences ... is becoming alarming, and if left unattended and unresolved, they will destroy Cambodia’s reputation for attracting and maintaining investors,” he said.
The tourism sector, which has also enjoyed significant yearly growth, must also adapt if it is to attract both visitors and investors, business leaders said.
Already, several private companies have been granted licenses to develop Cambodia’s islands off its southern coast as the country tries to scale up its resort offerings.
Officials Tuesday also mooted for the first time the revival of a national air carrier that is hoped to take advantage of growing regional tourism.
The country’s last national carrier, Royal Air Cambodge, was shuttered in 2001 after running up losses of 30 million dollars.
Domestic air routes are expected to prove vital to developing some of Cambodia’s more remote locations, as well as encouraging travelers to seek sights beyond the famed Angkor temples in northwest Cambodia, which remain its most popular tourist draw.
“National carriers are an important tool for promoting destination tourism for any country,” said Ho Vandy, president of the Cambodian Association of Travel Agents.
