Debate Rekindled Over Privatizing Rubber

The government is once again considering turning its state-owned rubber plantations into private enterprises or joint ventures between the state and private companies, a top rubber official said this week, renewing a decadelong debate on the benefits of privatizing the potentially profitable sector.

“Based on my experience, I have not seen any country that is perfect in running a rubber plantation,” said Ly Phalla, director general of the Ministry of Agri­culture’s rubber plantation department.

Over the past decade, the government has sporadically an­nounced plans to privatize its sev­en large rubber plantations, primarily located in Kompong Cham province. The renewed interest in privatization comes as the government undertakes an audit of the plantations’ assets amid a spike in natural rubber prices.

The Asian Development Bank is financing an independent audit that will take stock of all the state’s rubber assets so private investors can verify their value. The audit is expected to be completed in 2006, said Yin Song, director of the government-run Rubber Research Institute of Cambodia.

“We will wait and see the final result and determine if privatization is profitable or not,” Yin Song said.

Following production agreements a few years ago by the world’s largest rubber producers—Thailand, Malaysia and Indonesia—the price of natural rubber has been stabilized at around $1,200 to $1,300 per ton. Prior to 2002, the rubber price fluctuated greatly, sometimes.

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