As Cambodia tries to attract foreign investment and strengthen its economy, leaders should be careful to avoid the mistakes of several Asian countries that led to the 1997 financial crisis, economists told a group of policy makers and government officials Tuesday.
Urooj Malik, Cambodia’s resident representative for the Asian Development Bank, urged leaders to strengthen Cambodia’s banking sector and reduce weaknesses in the regulatory and institutional framework.
Malik, speaking at a seminar organized by the Council of Ministers and the ADB, also recommended Cambodia “enhance transparency and improve governance at both the national and corporate levels.”
The seminar, “Lessons from the Asian crisis and implications for Cambodia,” outlined the problems that led to the crisis—such as piling up too much debt.
Because Cambodia has a relatively underdeveloped economy, it was not hard-hit, but see investment by foreign companies drop along with the number of jobs and currency values.
“For Cambodia, the Asian crisis was a lesson,” said Sok An, minister of the Council of Ministers. Cambodia’s economic policies, he said, must be reformed to avoid the fiscal problems that crippled many of its neighbors.
Investors have also been slow to return to Cambodia since the factional fighting of July 1997.
