The government is fighting corruption to attract more foreign investment, Finance Minister Keat Chhon said Tuesday at the launch of a newly published guide to investing in Cambodia.
“We are not happy with the current [corruption], but we do not cry when facing a problem,” Keat Chhon told a gathering of government officials and foreign and local business people who attended the launch of the investment publication.
Government officials said the new investment guide, which was independently co-authored by the UN Conference for Trade and Development and the International Chamber of Commerce, will ease investors’ concerns by providing them with clear, accurate information.
Though the guide provides a wealth of information, businessmen said that the establishment of a commercial court remains a pressing concern for potential investors and for the country’s top industries.
Foreign investment has increased in the first nine months of 2003 compared to the same time last year, said Chea Vuthy, director of information at the Council for the Development of Cambodia.
From January to September 2002, foreign investment in 25 projects was worth a total of $175 million.
In the first nine months of this year, $203 million was invested in 36 foreign projects.
“The increase this year is mostly due to garment factories expanding their operations because they are confident in the [political] environment and stable situation,” Chea Vuthy said.
In the first nine months of this year, 15 garment factories invested $50 million to expand their operations, he said. This is up from 2002, when 11 factories invested about $15 million.
Dismissing the current political standoff as a barrier to investment, Keat Chhon said the country faces two major obstacles to increased investment.
“First, outside investors do not know about investment potential here,” he said. “The second is our internal problem, such as high operation and corruption costs.”
Strengths of the investment climate include market access, natural and cultural assets and a “strong and stable government commitment to create a business-friendly environment,” Keat Chhon said.
The weaknesses include an unskilled work force, high costs of electricity, water, telecommunications and transport, as well as weak administration and “persistent” corruption, he added.
Van Sou Ieng, chairman of the Garment Manufacturers Association of Cambodia, said that the investment guide will begin to improve the country’s image, which still suffers from the legacy of the Khmer Rouge and the killing fields.
“Our country is like a 9-year-old child that outsiders look at and think about the Khmer Rouge,” Van Sou Ieng said. “But this country is not about that at all. The investment guide will show that.”
An often cited concern of local businesses is the corrupt legal system. Within two years, the government hopes to set up a commercial court to resolve business disputes, as a condition of Cambodia’s expected membership in the World Trade Organization.
“A commercial court is necessary,” Van Sou Ieng said. “Without it, investors don’t have the confidence to come and invest. A commercial court will help the garment industry survive.”