A top Cambodian businessman and a leading economist said last week that they will welcome Cambodia’s induction into the World Trade Organization, but they expressed concern over how the country will benefit from the agreement.
“The WTO is like a knife with two faces,” said Sok Hach, director of the Economic Institute of Cambodia. While membership in the international organization would mean the country’s economy will benefit from a large market for the export of its goods, he said, a massive inflow of foreign imports could hurt domestic businesses, especially if they are not ready to compete internationally.
Sok Hach compared the planned WTO membership to the government’s “open sky” policy, a plan introduced in 1999 that opened up Cambodia’s airline industry to foreign competition. Two years later, the domestic carrier Royal Air Cambodge went bankrupt after struggling against rivals such as Bangkok Airways and Thai Airways.
According to Sorn Sokha, vice president of the Phnom Penh Chamber of Commerce, induction into the WTO would be a positive sign of Cambodia’s economic development.
But, he said local investors must understand how international trade policy works. He also urged local producers and exporters to strengthen their capacity and quality of goods so they can compete in the international market.
“Those with stronger wills win against those weaker,” he said. “They have to have skills in trade competition.”
He added that the government must improve technological and financial resources and marketing information networks. And, he said, it must also create a commercial court.
“If the government can improve these issues, we will be able to produce goods that other countries don’t have,” Sorn Sokha said.
Last week, King Norodom Sihanouk congratulated Prime Minister Hun Sen for moving to secure the 147th seat in the WTO. The official approval is expected in September.
That all three main political parties—the CPP, Funcinpec and the Sam Rainsy Party—proposed economic plans during the general election campaigns is another positive sign for the country’s economic progress. Sok Hach said.
“This is the first time that major parties have a clear economic development strategy,” Sok Hatch told Voice of America radio in a broadcast Thursday night.
He said that the country’s current economic reform strategy is facing serious obstacles.
“The people are getting poorer because of joblessness, low incomes, and low prices for local products,” he said.
He warned that operating costs for businesses will remain high as long as gasoline and electricity prices are high, while water supplies and public services continue to be poor.
