The sluggish pace of reform has helped pitch the economy into a slowdown, opened natural resources to exploitation and kept the country’s masses in poverty, according to a World Bank paper drafted for the upcoming Consultative Group meeting.
The report, to be distributed to the government and donors at the meeting next month, decries lack of headway against corruption and criticizes slow or ineffectual reforms in governance and the judiciary, and mismanagement of the country’s resources.
Titled “Cambodia at a Crossroads,” the draft is dated Oct 11 and was obtained by The Cambodia Daily this week. Dissecting the government’s institutional failures, the paper outlines oft-repeated criticisms the government will again face when donors convene in early December to assess its progress. The report urges the government to speed reforms, or “it can continue to muddle along, with severe adverse consequences for the poor, as it is currently doing.”
The paper likens the national budget to “a sieve through which public funds leak and a large share does not reach intended beneficiaries.”
It adds: “Greedy officials are deterring private investment, both domestic and foreign, by raising the cost of doing business in Cambodia.”
In a chapter on economic outlook, International Monetary Fund head Robert Hagemann expands on a Bank prediction last week that the economy’s gross domestic product growth is poised to plunge to around
2.4 percent next year.
The economy will struggle to find its feet after losing privileged access to US textile markets next year, but the dangers ahead partially can be attributed to the glacial pace of reform. Recovery to targeted growth rates of about
6 percent won’t occur until 2009, in the most optimistic forecast, he writes. “As a result of the failure to capitalize on the opportunities for reform during the past several years, especially against a backdrop of relatively strong, externally driven growth, a solid foundation for sustainable growth has not yet been established, even in urban areas,” Hagemann writes.