Experts Disagree on Impact of Assembly Vote

Business experts and social com­­mentators made differing predictions Monday about how ser­ious­ly Cambodia’s economy will be af­fected by the National Assem­bly’s vote to strip the parliamentary im­munity of three opposition law­ma­­kers and the subsequent arrest of par­liamentarian Cheam Chan­ny.

Central to the most of the predictions was the reaction of the US. The US could cut off loans to the gov­ern­ment and encourage in­­­ter­national agencies to do the same, said Chea Vannath, president of the Center for Social De­vel­­op­ment.

“I don’t know how much pa­tience the US has with this matter,” she said, adding that the US could use its influence to urge do­nor groups to stop loans and grants.

The US could also make it more difficult for Cambodian garment factories to export to the US, Chea Vannath said. In 2003, 70 percent of the garment sector’s exports were to the US, worth $1.12 billion.

Last month, the Garment Manu­facturers Association of Cambo­dia’s President Van Sou Ieng said that GMAC is lobbying for duty-free access to the US. US Senator Gor­don Smith has introduced legislation that would grant it.

Given this, “the timing was just horrible,” for the Assembly vote, a foreign business expert said on con­­dition of anonymity. “It’ll be hard for the [US] State Depart­ment to go forward with these proposals right now.”

The US Embassy declined im­me­­diate comment.

Say Sokhna, an adviser to De­puty Prime Minister Sok An, said it was too early to comment on the im­­pact on the economy. But, he said: “It is a normal situation in Cam­­bodia.”

Ok Serei Sopheak, an independent consultant for international NGOs and donors said “if the government won’t try to resolve the matter, it will have an affect, be­cause the international community is keeping an eye [on the situation], especially US Congress.”

But the foreign business expert said the events cannot be compared to the 2003 anti-Thai riots in terms of negative impact on the bus­iness environment. Regional in­vestors are unlikely to be de­terred, he said.

However, he added: “The image is of a guy fleeing the country with an associate being put in jail. The image is the hard part.”

Sam Rainsy has limited credibility in the business community be­­cause he is perceived as offering few alternatives to the status quo, said Tim Smyth, managing director of Indochina Research.

“There’s stability in the government, and that’s what businesses care about,” he said. “I’m sure [outside Cambodia] it seems worse than it actually is.”

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