Bribes - "unofficial payments" in politespeak -forced on business ranked
as the top complaint by industry leaders in a World Bank report on Cambodia's investment
climate released on Thursday, August 12.
The report, Cambodia Seizing the Global Opportunity, found "unofficial payments"
as a share of total business revenue were twice as high as in Bangladesh and by far
the highest among countries benchmarked in the report.
Bangladesh is ranked as the most corrupt of all the countries assessed annually by
Transparency International - which does not yet assess Cambodia.
Other gripes included minimum capital requirements and the costs of incorporating
a business, which are among the highest in the world in terms of relative income
levels.
It noted that Thailand, Nepal, Uganda and Vietnam have no minimal capital requirements
for establishing a business.
Adding to the burden were red tape and a lack of institutions capable of absorbing
risk, which has resulted in rural Cambodian firms holding the world's highest inventory
stocks when measured against sales.
Clearing an import shipment could require the completion of 45 separate documents.
"As a consequence of these impediments, labor productivity of Cambodian firms
surveyed is 62 percent below China and 10 percent below Bangladesh.
"Today's report notes that as a consequence of these perceptions, foreign direct
investment has fallen consistently since 1999."
Commerce minister Cham Prasidh said the report had exposed the problems, constraints
and challenges of business operating in Cambodia.
"Now that we know the symptoms and the disease, we know what is needed is the
political will to take the necessary actions and implement the reform program to
help business survive, increase competitiveness, and prosper," he said.
And Economic and Finance Minister Keat Chhon vowed to implement reforms aimed at
improving Cambodia's investment climate and delivering a public and financial management
system of international standards by 2015.
He said this would be achieved through a raft of policies designed to bolster public
and financial management announced by Prime Minister Hun Sen at his first cabinet
meeting for the new government on July 16.
"The government agrees that we must do more to improve the investment climate
by tackling the high cost of business, bureaucratic red tape and corruption,"
he said. "With respect to unofficial costs we need to work on both fronts, to
reduce the costs of business and to increase tax revenue."
