World Bank Head Wants More Effort on Corruption

World Bank President Robert Zoellick said Aug 5 that Cam­bodia should make a concerted effort to fight corruption, improve transparency and maintain fair labor practices in order to become a competitive player in the regional and international economy.

“Cambodia is a small country—it needs to be distinctive to get on the map,” Zoellick said at a press conference Aug 5. “It can be distinctive by emphasizing its heritage, better labor practices, better transparency, fighting corruption, which is important if Cambodia is going to draw the foreign investment to create the jobs.”

Zoellick, who visited Cambodia on Aug 4 and 5, said that the country also needed to ensure its newfound wealth was distributed equitably. “This is not just a question of pleasing the external world. It’s a question of being fair to the Cambodian people. People have suffered tremendously and people deserve a fair chance,” he said.

Over the weekend, Zoellick met with Prime Minister Hun Sen and Minister of Finance Keat Chhon as well as other government officials and members of the private sector, NGO and donor communities.

Zoellick’s visit to Cambodia was part of his first official trip abroad since he replaced Paul Wolfowitz last month. A former US deputy secretary of state and US trade representative, Zoellick worked on Cambodia’s 1991 Paris Peace Agreement and assisted the country in its accession to the World Trade Organization in 2004.

Zoellick noted that Cambodia had succeeded in carving out a niche market in the garment sector by adopting high labor standards. The country could apply the same principle to its burgeoning natural resource sector by implementing transparent management practices, he said.

Hang Chuon Naron, secretary general for the Ministry of Finance, acknowledged that transparency and better legal mechanisms could help attract foreign investment. “It’s not just anti-corruption, but service delivery…having transparent and efficient management [to] streamline procedures,” Hang Chuon Naron said Aug 5. But he added that improving governance would be a gradual, long-term process.

SRP President Sam Rainsy said that officials would need more than positive economic incentives to improve governance and fight corruption. “It’s a carrot to encourage the government to [reform], but maybe we need more than carrots—we need sticks,” Rainsy said, suggesting that a growing income gap and unemployment could fuel popular discontent, which would pressure the government to reform.

Tim Smyth, managing director of Indochina Research, said Aug 5 that Zoellick’s suggestions would be more difficult to implement outside the garment industry, which is well-controlled and managed. “In principle, it’s the right thing to do, but you can’t just duplicate it economy-wide,” he said.

“The best thing for the World Bank to do would be to communicate the benefits that do get delivered” because of improved governance, transparency and labor practices, Smyth added.

In a press statement released Aug 3, London-based forestry watchdog Global Witness called for Zoellick to demand accountability from Cambodian officials over allegations of corruption and impunity detailed in the group’s report on illegal logging operations.

Zoellick said that he had spoken about natural resource management during his meeting with Hun Sen. “[The prime minister] emphasized himself the need to stop the logging operations because they’ve become too significant a source of corruption,” he said.

Information Minister and government spokesman Khieu Kan­harith on Aug 5 declined comment on illegal logging, referring questions to a government-commissioned report.

The World Bank suspended funding for three of its projects in Cambodia last year, saying that it had found evidence of “misprocurement.” The projects’ funding has since resumed.

 

 

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