Asia Times
Oct 20, 2009
By Sebastian Strangio
PHNOM PENH - At a ceremony last month marking the construction of the US$128 million Cambodia-China Prek Kdam Friendship Bridge in Kandal province, Cambodian Prime Minister Hun Sen said the growth in aid and investment from China was boosting economic development and strengthening his country's "political independence".
"China respects the political decisions of Cambodia," he told his audience. "They are quiet, but at the same time they build bridges and roads and there are no complicated conditions." It was a thinly veiled reference to the strings attached to Western aid, including calls for progress on anti-corruption reforms, and underscored China's growing role in Cambodia's developing economy.
With a still booming economy amid the global economic downturn, China has maintained the momentum behind its strong commercial diplomacy towards Southeast Asia. Cambodia - a small but important corner of Beijing's emerging regional economic sphere of influence - has been one of the key beneficiaries of the loans, aid and investment largesse.
Official "friendship" delegations between the Chinese Communist Party and Hun Sen's ruling Cambodian People's Party have proceeded apace throughout the crisis. During a three-day visit to China's Sichuan province that concluded over the weekend, Hun Sen and Chinese officials announced $853 million worth of new Chinese loans and grants for various infrastructure projects in Cambodia.
The funds will be dedicated to hydropower projects, two bridges and the rehabilitation of the highway linking the country's Kratie and Mondulkiri provinces. The announcement comes on top of the $880 million in loans and grants Cambodia has received from Beijing since 2006, including finance for the $280 million Kamchay hydropower dam in Kampot province and the recently completed $30 million Council of Ministers building in the capital Phnom Penh - presented as a gift from the government in Beijing.
Chinese Embassy spokesman Qian Hai said Chinese investments in Cambodia as of 2009 totalled $4.5 billion, a commercial success he credits in part to a policy of respecting Cambodia's sovereignty. "We do not interfere in the internal affairs of Cambodia," he said. Phnom Penh has traditionally reciprocated by recognizing Beijing's One-China policy, advocating "peaceful reunification" between Taiwan and the Chinese mainland, Qian Hai added.
China's global sales pitch to developing countries, essentially aid and investment decoupled from prickly issues of human rights or democratic reforms, has in recent years scored diplomatic points in Phnom Penh. But like most Southeast Asian countries, Cambodia has had a complicated and sometimes stormy historical relationship with Beijing.
The 1950s and 1960s were marked by close relations, cemented by the close personal friendship between Cambodia's mercurial Prince Norodom Sihanouk and Chinese leaders Mao Zedong and Zhou Enlai, who offered the beleaguered Sihanouk asylum - including a residence and official stipend - after he was overthrown by the US-backed General Lon Nol in 1970.
China's support from 1975-79 for the radical Khmer Rouge regime - as a counterweight to the assertiveness of the recently reunited socialist Vietnam - led Hun Sen to refer to China as "the root of everything that was evil" in Cambodia in a 1988 essay. As memories of Cambodia's long civil war have faded and Hun Sen has consolidated his power, historical grievances have yielded to more practical concerns. (After Hun Sen ousted then-first prime minister Prince Norodom Ranariddh in a bloody factional coup in 1997, it is notable that China was the first country to recognize his rule.)
China's commercial growing economic ties to Cambodia are only one aspect of its re-engagement with Southeast Asia. Joshua Kurlantzick, a fellow at the Council on Foreign Relations in Washington and the author of Charm Offensive: How China's Soft Power is Transforming the World, said that around the time of the 1997-98 Asian financial crisis, China began to assert itself in the region through greater aid disbursements, new trade arrangements, cultural diplomacy and military ties.
"China ... saw broader China-ASEAN [Association of Southeast Asian Nations] relations as a way of reassuring countries in the region that China would be a peaceful and non-interfering type of power - that China could work well with ASEAN and thus demonstrate it could play the game of soft, multilateral diplomacy," he told Asia Times Online.
Countervailing aid
Chinese aid is in some measure weaning Cambodia off its dependence on the West, which still contributes nearly half of the country's annual budget.
On October 16, the National Assembly debated a new trade treaty with China with lawmakers from the opposition Sam Rainsy Party (SRP) arguing that Chinese-funded projects have had adverse effects on the environment and local people. SRP parliamentarian Mu Sochua singled out a 199,000-hectare agricultural concession granted to Chinese firm Wuzhishan in the country's northeast Mondulkiri province, which she said has illegally stripped large tracts of land from ethnic minority Phnong villagers.
Carlyle Thayer, a professor of political science based at the Australian Defense Force Academy in Sydney, said China's strategy of "non-interference", enshrined also in the ASEAN Charter, has been a major selling point for Beijing in Southeast Asia, where in some countries it is viewed as a shield against pressure from the United States and other Western countries. "Chinese aid offers an escape hatch for countries under pressure from the West [that] promote human rights and democratic reform," Thayer said.
Kurlantzick said that Chinese aid was likely to have a "corrosive" effect on good governance and human rights in Asia. "Hun Sen knows how to play China off of the Western donor groups and China's aid - even if not necessarily linked to any downgrading of human rights - could have the effect of a kind of race to the bottom on human rights," he said.
Sophie Richardson, Asia advocacy director at the US-based Human Rights Watch, agreed that unconditional Chinese aid to Cambodia could act as a "financial lifeline" that might otherwise be cut by Western donors. She said, however, that since Western nations often failed to work together effectively to set and enforce aid conditions in Cambodia, China's growing presence may end up having little distinct impact on human rights.
"The most important point - and key problem - is that the government in Phnom Penh ... seems determined to be extraordinarily abusive, regardless of whoever's money is on offer," she said.
Despite the recent influx of Chinese capital, there is no indication Hun Sen's government is ready to abandon ties to the West. Chea Vannath, an independent political analyst based in Phnom Penh, said that growing Chinese influence would likely be used to counterbalance the influence of Western countries - a vital strategy for a country of Cambodia's small size and redolent of Prince Sihanouk's balancing act during the periods of the Cold War that he ruled the country as prime minister, from 1955 to 1970.
"I think that what the government is trying to do is to diversify its aid ... It is eager to strike a balance," she said. "As a sovereign government, Cambodia needs aid from both sources."
Thayer agreed that rumors of a drop in Western - particularly American - influence were exaggerated. In 2007 US-Cambodia relations warmed when Washington lifted restrictions on the provision of aid to the central government, imposed following the coup of 1997. The US was already the top destination for Cambodia-made garments and textiles, one of the country's top exports.
In June, US President Barack Obama signalled his intention to boost trade further by removing Cambodia and Laos from a Cold War-era US trade blacklist, opening the way for American businesses to access US government-backed loans and credit guarantees for trade and investment between the two countries.
"All the countries of Southeast Asia, to varying extent, have long adjusted to China's rise and political influence," said Thayer. "They do not want to be put in a position of having to choose between China and the United States."
Sebastian Strangio is a reporter for the Phnom Penh Post in Cambodia.
(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
Tuesday, October 20, 2009
Sunday, October 18, 2009
Japan's labour unions eye resurgence
by Miwa Suzuki Miwa Suzuki – Sat Oct 17, 11:45 pm ET
TOKYO (AFP) – After decades of decline, Japan's labour unions are looking to flex their new-found muscle in the wake of a historic power shift that handed them unprecedented close ties with the government.
The unions were a crucial support base for Prime Minister Yukio Hatoyama, whose centre-left Democratic Party took power last month, ending more than half a century of almost unbroken rule by the business friendly conservatives.
"We are mates, comrades. We have the same thinking," said Tsuyoshi Takagi, who recently finished a four-year term as head of the Japanese Trade Union Confederation -- better known as Rengo -- which represents 6.8 million workers.
"The issue of employment is the most urgent problem we are now facing in Japan," he said in an interview with AFP before stepping down.
Hatoyama has pledged to create a more "fraternal society" and has attacked what he sees as the excesses of US-style capitalism.
His cabinet includes former labour chiefs and vocal opponents of free-market reforms that were stepped up during Junichiro Koizumi's 2001-2006 premiership and put another nail in the coffin of Japan's traditional job-for-life culture.
The recently ousted Liberal Democratic Party was close to big business so the current situation "is very new," said Yoshinobu Yamamoto, a politics professor at Tokyo's Aoyama Gakuin University.
"But we still don't know how far trade unionists can influence policies that were not in the party's manifesto," Yamamoto said.
Hatoyama's Democrats aim to hike the minimum wage to a national average of 1,000 yen (11 dollars) an hour, up from the current 713 yen, and ban the use of dispatch workers, or temporary workers, at manufacturing firms.
Such employees are easier to fire than regular workers and bore the brunt of a recent wave of layoffs.
Dispatch workers "have a lot of trouble" with companies where they work, said Takagi.
"We should prohibit those dispatches to the manufacturing factories," he said.
Economists, however, warn such a ban could burden companies and ultimately lead to fewer jobs.
Some firms may just reduce their workforce to lower labour costs, said Hiroshi Watanabe, an economist at the Daiwa Institute of Research.
"This could jeopardise jobs for 'the working poor,' making them just 'the poor,'" he warned.
As in many other countries, Japan's labour unions have endured decades of decline as its economy matured.
Only 18 percent of workers were union members in 2008, sharply down from a peak of 56 percent in 1949 and matching a record low seen in 2007, according to the government.
Labour market deregulation has caused the number of dispatch workers in Japan to more than triple to 1.4 million in 2008, from 430,000 in 2002.
Rengo's members are mostly regular workers at big companies who generally earn more and are granted many fringe benefits, said Tetsuro Kato, a politics professor at Hitotsubashi University.
If the new government becomes serious about addressing the problems of dispatch workers on insecure job contracts, at the expense of regular workers' welfare, it might cause "friction" with Rengo, Kato said.
Workers at Japan's biggest companies won an average wage hike of just 1.8 percent in the spring wage offensive this year, according to the business lobby Keidanren, down from 1.95 percent in 2007 -- the first decline in five years.
But the unions' close ties with the government do not mean they will secure a good wage rise next year in their annual bargaining with companies, said Hideyuki Araki, an economist at Resona Research Institute.
"It's a separate issue because what companies are watching is how government policies would affect their earnings," he said.
TOKYO (AFP) – After decades of decline, Japan's labour unions are looking to flex their new-found muscle in the wake of a historic power shift that handed them unprecedented close ties with the government.
The unions were a crucial support base for Prime Minister Yukio Hatoyama, whose centre-left Democratic Party took power last month, ending more than half a century of almost unbroken rule by the business friendly conservatives.
"We are mates, comrades. We have the same thinking," said Tsuyoshi Takagi, who recently finished a four-year term as head of the Japanese Trade Union Confederation -- better known as Rengo -- which represents 6.8 million workers.
"The issue of employment is the most urgent problem we are now facing in Japan," he said in an interview with AFP before stepping down.
Hatoyama has pledged to create a more "fraternal society" and has attacked what he sees as the excesses of US-style capitalism.
His cabinet includes former labour chiefs and vocal opponents of free-market reforms that were stepped up during Junichiro Koizumi's 2001-2006 premiership and put another nail in the coffin of Japan's traditional job-for-life culture.
The recently ousted Liberal Democratic Party was close to big business so the current situation "is very new," said Yoshinobu Yamamoto, a politics professor at Tokyo's Aoyama Gakuin University.
"But we still don't know how far trade unionists can influence policies that were not in the party's manifesto," Yamamoto said.
Hatoyama's Democrats aim to hike the minimum wage to a national average of 1,000 yen (11 dollars) an hour, up from the current 713 yen, and ban the use of dispatch workers, or temporary workers, at manufacturing firms.
Such employees are easier to fire than regular workers and bore the brunt of a recent wave of layoffs.
Dispatch workers "have a lot of trouble" with companies where they work, said Takagi.
"We should prohibit those dispatches to the manufacturing factories," he said.
Economists, however, warn such a ban could burden companies and ultimately lead to fewer jobs.
Some firms may just reduce their workforce to lower labour costs, said Hiroshi Watanabe, an economist at the Daiwa Institute of Research.
"This could jeopardise jobs for 'the working poor,' making them just 'the poor,'" he warned.
As in many other countries, Japan's labour unions have endured decades of decline as its economy matured.
Only 18 percent of workers were union members in 2008, sharply down from a peak of 56 percent in 1949 and matching a record low seen in 2007, according to the government.
Labour market deregulation has caused the number of dispatch workers in Japan to more than triple to 1.4 million in 2008, from 430,000 in 2002.
Rengo's members are mostly regular workers at big companies who generally earn more and are granted many fringe benefits, said Tetsuro Kato, a politics professor at Hitotsubashi University.
If the new government becomes serious about addressing the problems of dispatch workers on insecure job contracts, at the expense of regular workers' welfare, it might cause "friction" with Rengo, Kato said.
Workers at Japan's biggest companies won an average wage hike of just 1.8 percent in the spring wage offensive this year, according to the business lobby Keidanren, down from 1.95 percent in 2007 -- the first decline in five years.
But the unions' close ties with the government do not mean they will secure a good wage rise next year in their annual bargaining with companies, said Hideyuki Araki, an economist at Resona Research Institute.
"It's a separate issue because what companies are watching is how government policies would affect their earnings," he said.
Thursday, October 15, 2009
Cambodia Has to Cope With its Global Connection
Once the poster child for the benefits of globalization, Cambodia is now being asked to cope with its darker side in the aftermath of the financial crisis. The four pillars of the country’s economy – tourism, garment-making, construction, and agriculture – are feeling the global pinch in their various ways, writes journalist Anne-Laure Porée. Tourism is down thanks to the global stay-at-home vacation trend. Garment-making has collapsed due to lower US demand and choosey shoppers. Construction, like the rest of the world, plummeted with knock-on effects in consumer banking as rising unemployment led to greater personal loan defaults. Even agriculture, which could still provide positive growth in 2009, faces the uncertainty of weather and the challenges of foreign investment choking off local farmers. Perhaps the only ray of light is the natural resource industry – a sector that has long promised to provide limited value-added components to the economy. The sad part of this story is that the government seems content to wait for a rebound in the global economy, hoping the rising tide abroad will lift Cambodia’s boat. But as Porée notes, to integrate fully into the world economy, Cambodia has to learn how to be more than a supplier of garments based on cheap labor. – YaleGlobal
Waiting for a rebound, Cambodia needs to be more than dressmaker to the world
Anne-Laure Porée
YaleGlobal , 11 August 2009
PHNOM PENH: Defying the gloom descending on the tourism sector brought about by the global crisis, the capital’s airport recently launched a hopeful initiative: a new airline. Cambodia Angkor Air was launched to boost tourism between the capital and Siem Reap near the famed ruins of Angkor Wat. With tourist arrivals falling sharply since late last year, this may signal a triumph of hope over reality. If anything, the hopes and fears surrounding Cambodia’s tourist revenue and garment trade underline how the fortune of the country has become intertwined with the larger world.
Global misery: Cambodian women workers, who once benefited from foreign orders for garments, are now facing unemployment. (Photo: Anne-Laure Porée)
Since peace came to Cambodia in the last years of the last century, the country has emerged as a poster child of globalization in Southeast Asia. In the middle of this decade, Cambodia enjoyed double digit growth and even hoisted itself up to 6th place in the rank of the fastest growing economies for the 1998-2007 period.
And now the country is experiencing the downside of dependence on the world. The sectors most affected by the crisis – tourism and garment export – are the ones that have seen the most development thanks to the integration of Cambodia into the global economy a decade ago, after peace was restored in the country. At this time, the economy was opened to foreign investors, who poured money into the garment industry, taking advantage of supports granted to Cambodia such as the Most Favored Nation (MFN) and the Generalized System of Preferences (GSP). This status provided access to the American market and it enabled other Asian investors – Chinese in particular – to get round their own quotas or the Least Developed Country status conferred upon them by the United Nations.
But the happy days are now threatened by the shrinking world market. Of the four major pillars of Cambodian economy – the garment industry, tourism, construction and agriculture – three are seriously impaired by the global crisis. With 70 percent of Cambodia’s garment production going to the US, the declining American economy, choosey shoppers and stay-at-home tourists have led to job losses in Cambodia.
The figures released in late July by the Garment Manufacturers Association of Cambodia (GMAC) showed a worse than anticipated loss: exports dropped almost 30 percent and one garment worker in 6 lost her job in the first six months of 2009. Most of these workers are women who transfer a substantial part of their earnings to their family living in rural areas in order to supplement farming-based incomes. In some villages, every family has one or several members working in the garment factories based in the Phnom Penh suburbs. Some go for unpaid leaves or part time jobs, some enter prostitution, but most decide to go back to their village in order to work in the rice fields.
According to Van Sou Ieng, GMAC president, Cambodia is much more severely affected by the crisis than other Asian countries like Indonesia, Vietnam, Bangladesh or China because the industry sector in Cambodia is less competitive. “We need more time to produce than China or Vietnam,” he says. Though the government helps with profit tax exemptions or export charge reductions, there’s no miracle cure for Ieng.
Tourism – the second pillar of the economy – has suffered from the economic crisis, and the fallout from the swine flu. In Siem Reap, located next to the famed Angkor temples, a spot visited by more than 1 million tourists in 2008, the situation is described as “catastrophic” by hotel managers. The hotels’ occupancy rate has fallen 25 percent compared to the same period in 2008. Several three or four star hotels have definitely closed their doors, and the mid-range hotels have been multiplying promotional offers for months.
The drop in Western tourists’ arrivals (down 14 percent during the four first months of 2009 according to the Minister of Tourism) has a direct impact on tourism generated incomes – foreigners spent 1.6 billion dollars in 2008. The Ministry of Economy and Finance expects a drop in tourism growth of 7 to 8 percent this year.
The construction sector is also affected: many foreign investors have delayed, reduced or slowed their projects. The capital Phnom Penh started to change face in 2008 with the building of huge towers, business centers and shopping malls but activity slid in the second half of 2008, leaving workers without employment. Such trends have had significant consequences, particularly among the banking sector. The Acleda bank, which has the largest branch network in all provinces, reported a fall in profits in the second quarter of 2009 because of late payments and less lending. The Cambodians, who speculated on land as investment, are now facing difficulties because the prices of land and real estate have plunged and they can’t sell and get cash.
The hardest hit, of course, are the poorest of the poor who count each riel. For them, any drop in income, as well as any unexpected crisis, immediately results in cutting down the number of meals per day.
Agriculture, the fourth pillar of the Cambodian economy and the least exposed to global currents, could bolster the country’s 2009 growth, which is forecast at 2.1 percent. The agricultural sector (with 4.3 percent growth expected in 2009 depending on weather conditions) is essentially based on rice farming and fishing.
But the part of agriculture that has drawn foreign interest proves to be a mixed blessing.
In northeastern Mondolkiri province, plans by a French company to set up a rubber plantation have created a conflict that symbolizes the double edged sword of globalization. For several months, Bunong, a Montagnards ethnic group, has been fighting against the project – as their farmland gets swallowed up by the rubber company that has an agreement with the Cambodian government. The company is expected to make huge profits, a part of which could return to the community via the salaries of the plantation workers and the development of a new city.
The crisis has forced the government to pay attention to those left behind by globalization. “We thought that the private sector could solve every problem but we have to reconsider the role to be played by the State in order to palliate the deficiencies of the market,” says Hang Chuon Naron, Secretary General of the Ministry of Economy and Finance.
The crisis has also led the leader of political opposition Sam Rainsy, former Economy Minister, to call for injecting government funds into the economy and for pushing reforms, in particular against endemic corruption. But the government would rather let the storm blow over, waiting for growth to come back in developed countries, hopefully pulling the country out of its recession in the process.
In the meantime, some hopes turn to the mineral, oil and gas resources development. But the revenues from these productions will be mainly derived from exports of raw materials with no local added value, whereas imports of manufactured goods will increase. Even after growth returns, Cambodia will still have to figure out how to hitch its industry to the global economy profitably rather than be a supplier of garments produced by cheap labor. Cambodia is beginning to learn the challenge of being part of an integrated world.
Anne-Laure Porée is a journalist based in Phnom Penh. She can be reached at alporee@hotmail.com.
Rights:© Copyright 2009 Yale Center for the Study of Globalization
Waiting for a rebound, Cambodia needs to be more than dressmaker to the world
Anne-Laure Porée
YaleGlobal , 11 August 2009
PHNOM PENH: Defying the gloom descending on the tourism sector brought about by the global crisis, the capital’s airport recently launched a hopeful initiative: a new airline. Cambodia Angkor Air was launched to boost tourism between the capital and Siem Reap near the famed ruins of Angkor Wat. With tourist arrivals falling sharply since late last year, this may signal a triumph of hope over reality. If anything, the hopes and fears surrounding Cambodia’s tourist revenue and garment trade underline how the fortune of the country has become intertwined with the larger world.
Global misery: Cambodian women workers, who once benefited from foreign orders for garments, are now facing unemployment. (Photo: Anne-Laure Porée)Since peace came to Cambodia in the last years of the last century, the country has emerged as a poster child of globalization in Southeast Asia. In the middle of this decade, Cambodia enjoyed double digit growth and even hoisted itself up to 6th place in the rank of the fastest growing economies for the 1998-2007 period.
And now the country is experiencing the downside of dependence on the world. The sectors most affected by the crisis – tourism and garment export – are the ones that have seen the most development thanks to the integration of Cambodia into the global economy a decade ago, after peace was restored in the country. At this time, the economy was opened to foreign investors, who poured money into the garment industry, taking advantage of supports granted to Cambodia such as the Most Favored Nation (MFN) and the Generalized System of Preferences (GSP). This status provided access to the American market and it enabled other Asian investors – Chinese in particular – to get round their own quotas or the Least Developed Country status conferred upon them by the United Nations.
But the happy days are now threatened by the shrinking world market. Of the four major pillars of Cambodian economy – the garment industry, tourism, construction and agriculture – three are seriously impaired by the global crisis. With 70 percent of Cambodia’s garment production going to the US, the declining American economy, choosey shoppers and stay-at-home tourists have led to job losses in Cambodia.
The figures released in late July by the Garment Manufacturers Association of Cambodia (GMAC) showed a worse than anticipated loss: exports dropped almost 30 percent and one garment worker in 6 lost her job in the first six months of 2009. Most of these workers are women who transfer a substantial part of their earnings to their family living in rural areas in order to supplement farming-based incomes. In some villages, every family has one or several members working in the garment factories based in the Phnom Penh suburbs. Some go for unpaid leaves or part time jobs, some enter prostitution, but most decide to go back to their village in order to work in the rice fields.
According to Van Sou Ieng, GMAC president, Cambodia is much more severely affected by the crisis than other Asian countries like Indonesia, Vietnam, Bangladesh or China because the industry sector in Cambodia is less competitive. “We need more time to produce than China or Vietnam,” he says. Though the government helps with profit tax exemptions or export charge reductions, there’s no miracle cure for Ieng.
Tourism – the second pillar of the economy – has suffered from the economic crisis, and the fallout from the swine flu. In Siem Reap, located next to the famed Angkor temples, a spot visited by more than 1 million tourists in 2008, the situation is described as “catastrophic” by hotel managers. The hotels’ occupancy rate has fallen 25 percent compared to the same period in 2008. Several three or four star hotels have definitely closed their doors, and the mid-range hotels have been multiplying promotional offers for months.
The drop in Western tourists’ arrivals (down 14 percent during the four first months of 2009 according to the Minister of Tourism) has a direct impact on tourism generated incomes – foreigners spent 1.6 billion dollars in 2008. The Ministry of Economy and Finance expects a drop in tourism growth of 7 to 8 percent this year.
The construction sector is also affected: many foreign investors have delayed, reduced or slowed their projects. The capital Phnom Penh started to change face in 2008 with the building of huge towers, business centers and shopping malls but activity slid in the second half of 2008, leaving workers without employment. Such trends have had significant consequences, particularly among the banking sector. The Acleda bank, which has the largest branch network in all provinces, reported a fall in profits in the second quarter of 2009 because of late payments and less lending. The Cambodians, who speculated on land as investment, are now facing difficulties because the prices of land and real estate have plunged and they can’t sell and get cash.
The hardest hit, of course, are the poorest of the poor who count each riel. For them, any drop in income, as well as any unexpected crisis, immediately results in cutting down the number of meals per day.
Agriculture, the fourth pillar of the Cambodian economy and the least exposed to global currents, could bolster the country’s 2009 growth, which is forecast at 2.1 percent. The agricultural sector (with 4.3 percent growth expected in 2009 depending on weather conditions) is essentially based on rice farming and fishing.
But the part of agriculture that has drawn foreign interest proves to be a mixed blessing.
In northeastern Mondolkiri province, plans by a French company to set up a rubber plantation have created a conflict that symbolizes the double edged sword of globalization. For several months, Bunong, a Montagnards ethnic group, has been fighting against the project – as their farmland gets swallowed up by the rubber company that has an agreement with the Cambodian government. The company is expected to make huge profits, a part of which could return to the community via the salaries of the plantation workers and the development of a new city.
The crisis has forced the government to pay attention to those left behind by globalization. “We thought that the private sector could solve every problem but we have to reconsider the role to be played by the State in order to palliate the deficiencies of the market,” says Hang Chuon Naron, Secretary General of the Ministry of Economy and Finance.
The crisis has also led the leader of political opposition Sam Rainsy, former Economy Minister, to call for injecting government funds into the economy and for pushing reforms, in particular against endemic corruption. But the government would rather let the storm blow over, waiting for growth to come back in developed countries, hopefully pulling the country out of its recession in the process.
In the meantime, some hopes turn to the mineral, oil and gas resources development. But the revenues from these productions will be mainly derived from exports of raw materials with no local added value, whereas imports of manufactured goods will increase. Even after growth returns, Cambodia will still have to figure out how to hitch its industry to the global economy profitably rather than be a supplier of garments produced by cheap labor. Cambodia is beginning to learn the challenge of being part of an integrated world.
Anne-Laure Porée is a journalist based in Phnom Penh. She can be reached at alporee@hotmail.com.
Rights:© Copyright 2009 Yale Center for the Study of Globalization
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