Asean’s Drawbacks Outlined

Asean membership and admission to its free trade area, AFTA, could have a severe impact on the national budget because of a requirement to cut import tariffs, a government official reiterated Tuesday.

“The Royal Government needs to study how this will affect government revenue,” said Nady Tan, acting co-minister of the Coun­cil of Ministers, “and how to generate revenue to replace lost import tax revenue.”

Nady Tan’s comments, echoing a previously expressed concern of the Cambodian government, came on the second day of a conference in Phnom Penh debating Asean policies.

Customs revenue accounted for 42 percent of the overall Cam­bodian government revenue in the first three months of this year. The country’s failure to broaden its tax base has been criticized by the international community.

The leader of a Cambodian think tank, however, warned Tues­day of dangers that may await if Cam­bodia does not be­come an Asean member.

“If we do not join Asean, Cam­bodia can face greater threats—threats from globalization, threats to security and suffer from a weak and isolated economy,” said Kao Kim Hourn, executive director of the Cambodian In­stitute for Cooperation and Peace.

Nady Tan warned that the benefits as well as the problems with Asean membership need to be discussed and that Cambodia will need to work hard not to be just “a poor relative invited to dinner out of pity.”

Academics at the conference, however, felt that this was unlikely and that Cambodia did have something to offer the organization.

“Cambodia will be able to contribute to Asean in a meaningful way,” said M Rajaretnam, director of the Information and Resource Center in Singapore. “Your fledgling democracy can be seen as a shining example…to Myanmar [Burma], Laos and Vietnam.”

 

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