economics

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The Mirror, Vol. 13, No. 594

Observing a wide range of discussions about the future, there are two fields which get most prominent attention: the economy – and the state of law.

As the Cambodian economy – internationally – depends much on the export of garment products and on international tourism, and on a construction boom, we did mirror related reports:

The garment industry was a sure bet in the past – in every of the previous years, this sector grew by 15% to 20%. But this was not an assurance for the future. The situation is bad, but not too bad, some observers say:

In Cambodia 73 factories were closed in 2008, making nearly 25,000 workers unemployed. But 64 new factories opened, absorbing 10,000 new workers. – The export of garments to international markets dropped by 2%, while before, it was expected that it would drop by between 5% and 7%. Therefore the global financial crisis affected this sector very little.

Others are more careful to express their hope: While at present the future looks really to dark, things may change:

Presently received orders will be finished by February and March 2009, and there are no buying orders for May and June 2009.

But buyers from the United States of America probably wait until the new president takes his position in mid January, then they will continue buying.

Investments in the construction industry are also facing big problems:

All construction projects of high rise buildings to develop the city to become a modern city are mostly based on foreign investment in Cambodia. Therefore large scale investments, like those by Korean investors planning constructions for the city, are delayed.

The labor unions say that 30% of the construction workers are laid off, and various projects are suspended; and it is forecast that in 2009 the decline will continue.

And tourism?

The Minister of Tourism recognized that the global financial crisis and the confrontation with Thailand in the Preah Vihear region slows the number of tourists to Cambodia down, but Cambodia will make all efforts to guarantee the safety of tourists, and to promote the further growth of tourism.

The loss of everyday jobs and income for the families is a consequence resulting from the decline in the number of tourists to Cambodia since July 2008.

Such reductions in the economic possibilities are also reflected in the cautious employment policy of the government for new graduates, in spite of the fact that their number is increasing year by year:

The Cambodian government decided to reduce the recruitment of new civil servants from 9,000 to 8,000 to work at different ministries and departments in 2009.

To reduce employment alone will not be sufficient. We will watch out for reports about other determined decisions how to contain and to save expenses.

The plan to spend US$10 million on public lighting in Phnom Penh is surprising in this context. Even if it is intended to do this with a foreign loan, it is not only a liability to be paid back; after the investment is done, a lot of electricity will have to be paid for. Public taxpayer money will have to be spent regularly for the electricity, and this money will go to the producers of electricity; more and more private companies will profit from this.

Of course there is the hope for big oil money in the futue. And the international community has pledged around one billion dollars of aid for 2009.

The scholarly wisdom from the field of Economics and of Business Administration has not prevented a global economic meltdown of a size never before experienced. Now there are many efforts under discussion, what kind of political will and political action is needed to control the economic problems so that they do not get totally out of control. The myth about the “self-regulatory powers of the market” led into global crisis; new bold legislation and new government interventions are now being called for internationally.

There is new movement also in Cambodia in the field of the role of law.

The new year started with an almost unexpected news from the past: after five years of doubts and mistrust in police and in court actions, related to the 2004 murder of the labor leader Chea Vichea, Born Samnang and Sok Sam Oeun were released on bail, because, as the Supreme Court judge Dith Munty explained, there is a lack of clarity: the case needs further investigation, as there were gaps in the procedures, and there is insufficient evidence.

There will have to be a lot of explanation to be done, why previous investigations were not done correctly, and how it was possible that gaps in the procedures – which had been pointed out by many, including by the former King – could not be rectified without keeping two persons in prison for five years.

Now the police waits already one whole week for the green light from the court to start the new investigation. It is probably the correct procedure now to wait for the court again. When there is a lack of clarity, new investigations are to be made, according to the law, independently from any outside influence, also independent from the executive branch of the government, according to the Constitution of the country.

Article 51 of the Constituton says:
“The Cambodian people are the masters of their own country. All power belongs to the people. The people exercise these powers through the National Assembly, The Senate, the Royal Government and the Judiciary. The legislative, executive, and judicial powers shall be separate.”

But it is at least surprising that the effort by three persons, accredited by the Bar Association of Cambodia to act at the courts in Cambodia, met with difficulties when hey tried to file a law suit. They want to initiate a clarification by the Phnom Penh Municipal Court about allegations of irregularities at the Extraordinary Chambers in the Courts of Cambodia. They had not been able, in spite of their efforts over several months, to receive certain pieces of information – as we had mirrored on Friday, 9.1.2009, in detail from the Khmer press.

What is even more surprising – not based on any legal expertize, but just on common sense – is that the appeal to a court of law to bring clarity, is not welcome, but is met by an expression of regret. The national judges at the Extraordinary Chambers in the Courts of Cambodia criticized this appeal to a court with the argument, that they had entered into service at the Khmer Rouge Tribunal on the basis of a Royal Decree, signed by the King.

This case brings a basic problem of perception to the public, whether this society will live up to its constitution, where an independent judiciary is to find out what is right and what is wrong, or whether positions of rank will have precedence. Do the national judges at the Extraordinary Chambers in the Courts of Cambodia not trust that the courts can fulfill their duty?

The fact, that a person had an illustrious career to which he was properly appointed, is no reason not to clarify by the courts and on the basis of the law in a transparent way, whether a person has acted properly or not. When Heng Pov, who was, over the course of time, undersecretary of state, and assistant to the Minister of the Interior, and then police commissioner of the city of Phnom Penh – who had had all the proper appointments – was put to the test by the courts, he failed and is now in prison.

Whoever is innocent, should be happy to have this finally confirmed by a normal, public court. Why not?

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