Cambodia ranked third-worst for illicit trade out of 17 countries in the Asia-Pacific region in a recently released index by the Economist Intelligence Unit (EIU) that analysed governments’ abilities to combat illegal trade operations.
The report, commissioned by the European Chamber of Commerce of Singapore, reviewed countries under four categories: intellectual property rights, transparency and trade, customs environment and supply and demand.
Cambodia was given an overall score of 23.9 on a weighted scale of 100, while Laos scored 12.9 and Myanmar came last with 10.8. At the other end, Australia had a top score of 85.2.
“Not surprisingly, the region’s poorer economies – Cambodia, Laos and Myanmar – sit at the bottom of the rankings,” the report said, adding that poorer countries will continue to be plagued by budgetary constraints that make it difficult to implement necessary reforms.
Out of the four categories studied, the customs environment was Cambodia’s worst performing area – a problem the report’s authors predict could lead to more shady trade dealings.
“Without outside assistance, it could be years, if not decades, before any of these economies can begin to build a sufficient customs apparatus” the report added. “As the region continues to integrate, the vulnerabilities this creates could exacerbate the problem of illicit trade.”
Preap Kol, executive director for Transparency International Cambodia, said continued lack of oversight and transparency allows “illicit trade to occur quite commonly and easily.”
“When trading countries are not required by laws to refrain from engaging in corruption, they are often likely to get involved in corrupt practices especially in briberies to gain benefits or competitive advantages for their businesses.”
He supported the EIU’s recommendation that a third party or outside entity could help clean up and revamp Cambodia’s customs system.
“Alternatively, a robust computerised system that can record and keep accurate accounts of imports and exports can minimise illicit trade, provided that regular audits and inspections are conducted by independent bodies,” he said.
While government spokesman Phay Siphan admitted that more needs to be done to stop illicit trade, he said the government has been proactive in curtailing illegal practices. However, he said it was nearly impossible to completely stamp it out.
“The government has done a lot to strengthen its customs system in order to provide fair treatment for all,” he said. “All government institutions related to trade activities have launched electronic systems to facilitate trade, which follow international standards.”
Lim Heng, vice president of Cambodia Chamber of Commerce, told the Post yesterday that he did not believe the EIU report was factually correct, explaining that private companies in the country and the government work together to solve trade irregularities.
“Generally, our trade system is good and many things work through the law,” he said. “There is good law enforcement from the officials.”
However, he admitted that not all businesses and government officials operate at the same level of legality.
“We agree that there are some poor performers out there, but it is because of individual officials or certain businesses, and not the system as a whole,” he said.