Rich and Poor
The gap between the rich and the poor is very big.
World Bank Group President James D. Wolfensohn wraps up his visit to Cambodia by
urging Cambodia to seize the opportunity to "move urgently forward on the reform agenda it has adopted."
The problem in Cambodia is the corruption and poverty. Money coming from the World Bank went in the pockets of all these corrupt officials.
Enough is enough!
World Bank Group President James D. Wolfensohn wraps up his visit to Cambodia by
urging Cambodia to seize the opportunity to "move urgently forward on the reform agenda it has adopted."
The problem in Cambodia is the corruption and poverty. Money coming from the World Bank went in the pockets of all these corrupt officials.
Enough is enough!
posted by Proleung at
5:07 PM
6 Comments:
World Bank warns Cambodia on corruption
By Amy Kazmin in Bangkok
Published: February 11 2005 13:55 | Last updated: February 11 2005 13:55
Cambodia was on Friday warned by the World Bank that its economic future hinges on stamping out the flagrant corruption that has undermined the country's business prospects since the end of the Khmer Rouge era.
James Wolfenson, president of the Bank, said Phnom Penh's top three tasks to promote economic development - essential to generate jobs for the youthful population - are "fighting corruption, fighting corruption, and fighting corruption."
"This is Cambodia's problem... if you do not move no one will cry over Cambodia," Mr Wolfenson told the first-ever investment conference in a country scarred by three decades of civil war. "If you do not become a credible competitor, it will be because of Cambodians, not because of the international community."
Prime Minister Hun Sen, the long ruling strongman, re-affirmed that he intended to cut the excessive red tape, and improve the country's governance to make Cambodia an attractive investment destination.
But Mr Hun Sen, who has made similar sweeping declarations before, has so far taken little convincing action to tackle the deeply entrenched culture of official corruption by poorly paid civil servants, who have come to depend on shake-downs of business to supplement their meager official wages.
Mr Wolfenson's warning comes at a pivotal moment for Cambodia. Its economy has grown by an average of 6 to 7 per cent a year in recent years, thanks in part to growing foreign tourist arrivals, but also due to a surge in garment exports to the United States.
But the end of the global garment quota system in 2004 has threatened Cambodia's nearly $2bn in foreign garment sales, which accounts for nearly 80 per cent of its' total exports. Free trade in textiles allows buyers to source freely from the lowest cost, or most attractive, production locations namely China - a shift likely to take place gradually in the coming years.
Cambodia's garment factories have opened themselves to intense scrutiny in a bid to promote themselves as a haven of fair labour standards and 'safe' production for image sensitive global brands. But bribes, pay-offs and "facilitation fees" are estimated to add around 10 to 15 per cent to the costs of garment exports.
Both the World Bank and the IMF have projected that economic growth will slow to between 1.9 and 2.4 per cent a year as a result of the slowdown in the garment trade, following the end of the textile trade pact. Foreign investment has plunged from around $250m in 1998 to around $50m in 2002. In a World Bank survey last year of 800 businesses operating in the country, 75 per cent identified corruption as their biggest operational constraint.
The leadership conference took place against the backdrop of a political crisis that has seen outspoken Sam Rainsy, Cambodia's opposition leader, and one of his deputies, flee into exile after their parliamentary immunity was removed.
Another opposition MP, who also lost his immunity, has been arrested as part of a crackdown that US senators has described as an attempt to crush Cambodia's democratic opposition.
By
Anonymous, at 5:15 PM
The World Bank group
World Bank Group President James D. Wolfensohn Wraps Up Visit To Cambodia,
Urges: "Seize The Opportunity"
Contacts:
Phnom Penh : Bou Saroeun
(855-23) 213-538
sbou@worldbank.org
Kimberly Versak
66-1-875-5064
kversak@worldbank.org
PHNOM PENH, February 11, 2005 - "Cambodia is a country of great human,
cultural, and natural resources with real potential to be a thriving
economy, but it needs to move urgently forward on the reform agenda it has
adopted," said James D. Wolfensohn, President of the World Bank Group, as
he concluded his visit to Cambodia this week. He congratulated the
Cambodian people on the progress they have already made, and said, "You are
at a crossroads for change. Cambodia must not falter, but must move
decisively forward if it wants to ensure that its vision for a stronger,
healthier country and people is to be realized."
Mr. Wolfensohn, in his first trip to Cambodia, met with a number of key
stakeholders here to learn more about issues important to the Cambodian
people. He met with His Majesty the King, Norodom Sihamoni; Prime Minister
Samdech Hun Sen; senior government officials; civil society; students and
youth organizations; garment workers; members of the private sector; and
donors. He also participated in a high-level panel discussion on
Cambodia’s trade opportunities at the international summit: Cambodia:
Seizing the Global Opportunity - a Growth Strategy in an Era of Free Trade.
In each of his meetings, Mr. Wolfensohn underscored the need for Cambodia
to promote good governance and fight corruption in order to promote
broad-based growth and poverty reduction. He stressed the need to improve
aid effectiveness and coordinate efforts to achieve the growth and poverty
reduction objectives. He also made special efforts to reach out to youth
in Cambodia, given their important role in the hope, inspiration, and
vision of the future of this country.
Mr. Wolfensohn noted that the analytical work - diagnosing the problems of
poor governance, weak institutions, and corruption that are holding back
economic growth, investment, and poverty reduction - has been done, the
reform agenda has been set, and that now, "the key is implementation."
Based on his own meetings with stakeholders in Cambodia, Wolfensohn said
that the key to implementing the reform agenda and achieving Cambodia’s
vision for the future rested in an aggressive fight against corruption.
"There are many people in Cambodia who have asked why the World Bank
remains involved in a country where the problems of corruption are as
well-recognized as they are, by government, civil society, private sector,
the media, and others," Wolfensohn said. "We believe, however, that we
have an obligation to help the Cambodian people to have the opportunity,
the hope for a better life. We believe that by working with Government,
increasing our partnership with the donor community, and increasingly
consulting with civil society groups, including youth - all who share this
dream of a better future - that we can do more by staying engaged than by
leaving. We have reduced our lending to Cambodia - as a response to the
poor performance on governance indicators - but we have not reduced our
commitment, nor our efforts to push for the kinds of reforms that are
needed to bring about a better life for all Cambodians."
Mr. Wolfensohn visited a garment factory with 380 employees, most of whom
are women and supporting their families back home in rural communities.
The garment sector is Cambodia’s largest industry, worth $1.6 billion in
2003, and accounts for 80% of exports. He praised the International Labor
Organization’s (ILO) efforts, through its factory monitoring program, in
supporting the Government’s goals to make Cambodia an international leader
in improving core labor standards. As part of these efforts, not only have
the conditions of Cambodia’s labor force improved, but the productivity has
increased and quality of products boosted, he noted.
"The increasing competition faced by Cambodia as the MFA (Multi Fiber
Arrangement) expires means that continued reform to improve productivity
and competitiveness by reducing costs - many of which are caused by poor
infrastructure, weak institutions, corruption, and layers of bureaucracy -
and improving the skills and training of the workforce is all the more
urgent." He warned that a workforce of some 1.2 million people directly
and indirectly relied on the garment sector and if the government failed in
its reform objectives, that these people would be seriously affected, and
as much as 10% of GDP could be hurt. He urged renewed implementation on
the Government’s 12 Point Reform plan, announced last August, which
addressed competitiveness issues and impediments to private sector led
growth.
Another highlight of the visit was a ceremony where Mr. Wolfensohn handed
out new land certificates to residents. He noted that having rights to
land marks a new opportunity for the Cambodian people to invest in their
farms, small businesses, and houses, to improve their financial security
and their lives - and is key in the fight against poverty. With support
from the World Bank-financed Land Management and Administration project,
the Government is issuing 20,000 titles a month, mostly in rural areas, in
a transparent and participatory process, with 80% of the these titles
registered jointly by wife and husband or by female-headed households.
Tackling another key issue - aid harmonization - Mr. Wolfensohn met with
the government and a number of donors to discuss how to build upon the
government’s efforts to increase the effectiveness of aid money - in
particular, addressing issues such as the quantity and quality of technical
assistance. Mr. Wolfensohn congratulated H.E. Keat Chhon, Minister of
Economy and Finance, for his leadership in harmonizing aid - with donors
increasingly cooperating with each other and aligning their programs with
the government’s priorities, and government in turn taking on ownership of
the development process and committing itself to reform of institutions and
systems in a transparent and accountable manner. By improving national
systems (ie, civil service, budgeting, accounting,) the government can
reduce transaction costs and increase budget support from donors, Mr.
Wolfensohn said. Partnership, better alignment, and strengthened country
systems are absolutely crucial to making sure that the aid intended to he
lp Cambodian people reaches them.
Mr. Wolfensohn addressed more than 800 students at Pannasastra University,
where he announced the Youth in World Bank Cambodia Program - a special
program modeled on successful pilots in other country offices around the
globe to involve a youth in analyzing the Bank’s projects and programs and
helping to incorporate their views and needs in the design and
implementation. He noted that Cambodia needs a paradigm shift from a
society that accepts corruption as a natural way of life, to one that
demands the highest ethical standards, one that focuses on education and
hard work, and noting that young people have a crucial role to play in
making this shift, provided they refuse to play any part in corrupt
practices. He reminded youth of the lessons he learned from speaking to
other youth groups, in other countries, who told him that "youth may be the
future, but we are also the now." He said that although Cambodians have
suffered from a terrible past, the country has a great deal of unrealized
potential a
nd youth are an important part of that ; they must willing and confident in
taking a leadership role in reforming Cambodian society.
Mr. Wolfensohn also joined in the high-level conference: "Cambodia -
Seizing the Global Opportunity: A Growth Strategy in an Era of Free Trade"
and participated in a discussion about how Cambodia can create a domestic
environment that supports sustainable growth in investment and productive
jobs; how the private sector can contribute to this growth agenda, and the
important role of trade, good governance and corporate social
responsibility in a least developed country. He spoke about trade and
development linkages and urged that Cambodia, as with all developing
countries, needs to focus on three areas to reap the benefits of the global
trading system :good governance, including institutions, training, people
and systems; a functioning legal system; and strong anti-corruption
measures. He also assisted H.E. Minister Cham Prasidh, Senior Minister of
Commerce in awarding four awards for the First Annual Corporate Citizenship
Awards, supported by the International Finance Corporation and selected
through a comp
etitive process based on a set of international criteria.
Mr. Wolfensohn also met with members of civil society, and discussed with
them key issues such as governance, use of natural resources, gender, and
human and social development. "No society can move forward without respect
for women and equal opportunity," he said.
He urged strengthened cooperation between the Bank and NGOs in areas where
the vision and goals of Bank and NGOS are aligned - such as good
governance, social and economic justice, and poverty reduction - and said
that they need to continue to openly discuss areas where they may disagree
and work towards identifying way to collaborate so that together they can
reach their shared goals of a more prosperous and equitable Cambodia.
Mr. Wolfensohn concluded his visit with a meeting with His Majesty, King
Norodom Sihamoni in which he stated: "The future is in the hands of
Cambodians," Mr. Wolfensohn concluded. "The World Bank is ready to
support your efforts - but ultimately, success or failure is in your hands.
All have a role to play - the Government, the Parliament, civil society,
the private sector, students, youth, media - in making their country a
place of opportunity, of hope, and peace. Cambodia deserves this
opportunity, and the World Bank is committed to being your long-term
development partner and assisting you in meeting these dreams for a better,
more equitable future for all Cambodians."[End]
By
Anonymous, at 5:16 PM
February 10, 2005
James D. Wolfensohm, President
The World Bank Group
Dear Mr. Wolfensohm,
On the occasion of your visit to Cambodia, the Members of Parliament of
the Sam Rainsy Party would like to bring to your attention some major
concerns the political opposition has regarding the paths the government
and the National Assembly have taken in the months since the
Consultative Group Meeting in 2004 that have alarming impact on
democracy and responsible governance within Cambodia.
Our first concern is regarding corruption in the government
demobilization project sponsored by the World Bank. While we are
encouraged by the government's return of the US$ 2.8 million that has
been misused, we strongly believe that the Bank's extension of the
auditing deadline and allowing the government to choose its own auditing
firm could cause doubts concerning the transparency of the auditing
process. We urge the Bank to require that the audit be undertaken by a
firm without any ties to the government as well as recommend that strong
measures be taken against officials and individuals found to be involved
in the misdirection of the project funds. If taken, these measures could
be a step forwards in the government's commitment to reduce corruption
and gain confidence from the private sector.
Our second concern is regarding the accelerated exploitation of land
concessions by private enterprises. Despite conclusions and
recommendations put forward in Cambodia at the Crossroads concerning
land concessions, the government continues to allow private companies to
exploit land concessions in spite of protests by local villages and the
clear rules stated in the existing land laws. We are gravely concerned
about the situation in Pursat and Kompong Chhnang where villagers are
reporting increased activity by the Pheapimex/Wuzhishan companies that
show no regard for the needs of the local people. Not only are the local
people being prevented from accessing a traditional and vital resource
for their livelihoods, the damming of streams in the concession is
affecting their ability to produce enough food on their land outside the
concessions. We strongly urge you, Mr. President, to stress to the Prime
Minister this very urgent and crucial matter of survival of the poor and
the detrimental implications on long-term economic growth. Once again,
the opposition repeats its recommendation of a one-year moratorium on
transactions involving State assets, pending investigation and proper
evaluation.
We are deeply concerned over the current situation within the National
Assembly in regards to its relations with the opposition. The February
3rd removal of the parliamentary immunity of three opposition lawmakers
brings into grave question the government's commitment to democracy.
With legal complaints having been lodged against lawmakers from both the
government and the opposition, the removal of immunity from only
opposition lawmakers can only be seen as an attempt to quiet criticism
of the government rather than the government's claims that it was only
allowing the courts to proceed. With the lack of an independent
judiciary free of political interference, it should be clear why the
opposition feels the removal of immunity is not just an effort to allow
the judicial system to do its job but rather an overt form of
intimidation. The opposition is also absent from all parliamentary
commissions allowing the opposition no chance to voice its opinion on
government decisions in any venue other than the National Assembly. It
is a crucial aspect of democracy that all parties are allowed to freely
speak on the issues of state and the current climate in Cambodia is
making it exceedingly difficult for the opposition to do this
effectively and free from fear of reprisal.
Our final concern is the fact that certain items such as the use of
foreign loans by government are not being properly discussed by the
National Assembly as stipulated in Article 90 of the Constitution. The
National Assembly is the proper body to be providing oversight of
projects funded by foreign loans yet at this time the Assembly is
provided with no information from the government concerning the
operation of these projects. It would be of great use to all members of
the National Assembly if the World Bank and other donors would provide
all Members of Parliament with detailed information on all loan projects
so that they can effectively undertake their roles of monitoring and
maintaining accountability of these projects for both the people of
Cambodia and donor countries.
We hope that you will be able to consider and address these issues
during the International Leadership Summit in Phnom Penh. We feel that
these are issues that need to be resolved as soon as possible to ensure
that Cambodia stays on the road towards democracy and responsible
government.
Sincerely
(sgd.)
Hon. Son Chhay, Member of Parliament
By
Anonymous, at 5:17 PM
The World Bank group
News & Broadcast
Headlines for Friday February 11, 2005
Cambodia Needs Rapid Reforms In Vulnerable Garments Sector: World Bank
The World Bank's chief East Asia and Pacific economist, Homi Kharas, said
Cambodia needs to introduce labor market reforms rapidly if it wants to
compete with giant neighbors in its key but vulnerable garments sector, the
Agence France Presse reports.
Kharas said this at a two-day meeting that opened Thursday night in Phnom
Penh on fair trade and growth titled "Cambodia: Seizing the Global
Opportunity - a Growth Strategy in an Era of Free Trade." Kharas praised
development plans outlined by Cambodian Prime Minister Hun Sen but said the
country needed to be quick in order to catch up with its neighbors. "The
context for change is quite favorable and benign," Kharas told the
conference. "For countries like Cambodia, which is starting late, movement
is not enough. It must be fast and rapid movement. There is no country in
the world that is as dependent on a single sub-sector as Cambodia," he
added, referring to the garment industry.
Hun Sen told the conference the way forward for his country was to stick
with global labor market compliance standards. "We hope that our young
people will grow up in a Cambodia that is known as a place where you can do
good and do well, a place where good governance, corporate social
responsibility and profitability go hand in hand," he said.
Xinhua explains that the conference addresses Cambodia's garment sector,
investment climate, and path towards international engagement. The
expiration of the Multi-Fiber Arrangement and the consequent elimination of
quotas in the garment sector have dramatically changed the dynamics of
global garment production. These changes could have a profound effect on
the Cambodian economy because garments are responsible for 80 percent of
Cambodia 's export revenues, employ 270,000 workers and accounts for around
12 percent of Cambodia's Gross Domestic Product.
Reuters further reports that World Bank President James Wolfensohn said on
Friday that impoverished Cambodia must stamp out rampant corruption if it
is to succeed in an increasingly competitive world. "Fighting corruption,
fighting corruption, fighting corruption," Wolfensohn told a conference
when asked what were the three things the Cambodian government should be
doing. "This is Cambodia's problem. If you do not move, no one will cry
over Cambodia," he told the conference attended by businessmen and
officials of a government that promises crackdowns on corruption but has
yet to pass a law to deal with it. "If you do not become a credible
competitor, it will because of Cambodians, not because of the international
community," he said, calling corruption the country's core problem. "You
have confusing bureaucratic practices, you have too many approvals, you
have too many steps and every step is an opportunity for corruption,"
Wolfensohn said.
The Associated Press meanwhile reports that Hun Sen Friday vowed to cut red
tape and eradicate corruption to help the country's fragile economy survive
the removal of protective quotas for its main exports. "The challenge for
Cambodia in the next 10 years is the strengthening of good governance, so
that we can attract more investment and ensure our competitiveness with
neighboring countries," he said. Hun Sen's pledges included expanding
electricity and communications networks, minimizing paperwork, eradicating
"unofficial" costs, and eliminating unnecessary licenses.
Reuters however adds that Hun Sen has given no details of what steps he
would take or when they would be taken despite criticism from aid donors,
who give Cambodia $500 million a year. Foreign investment in Cambodia has
fallen sharply from between $750 million and $800 million a year between
1995 and 1998 to $251 million in 2003 and officials acknowledge red tape
and corruption are largely to blame.[End]
By
Anonymous, at 5:21 PM
World Bank Warns Corruption Could Destroy Cambodian Economy By Kate Woodsome
Phnom Penh
11 February 2005
The World Bank called on Cambodia this week to drastically curb corruption, or face isolation from the world's free trade markets. The country may have begun to put its house in order.
World Bank President James Wolfensohn says the three greatest obstacles to Cambodia's growth are "corruption, corruption, corruption."
According to a World Bank survey, as much as one-quarter to one-third of a foreign investor's profits in Cambodia are being siphoned off by corruption that takes place at all levels of economic activity.
In a roundtable discussion in Phnom Penh on Thursday, Mr. Wolfensohn said the country would have itself to blame, if it failed to become a credible competitor in world trade.
Prime Minister Hun Sen announced an ambitious plan on Friday to cut investment costs, including automating business registrations, and reducing import and export times.
However, no deadline has been set for these efforts, and the government still has not passed an anti-corruption law, as required when the country joined the World Trade Organization last year.
Pascal Lamy, former trade commissioner of the European Union, says the government knows it needs to reform, but is too slow to take action.
"I think the path of passing the necessary legislation, and making sure it is enforced, with the necessary policing, or ability to litigate in court, for instance, is a bit too slow,” said Mr. Lamy. “Not that the commitment has changed, not that the direction has changed, but we need to speed up the process."
When Cambodia joined the WTO last year, it was considered a pioneer, an example of how the world's least developed nations could gain access to normally unattainable markets.
But international trade experts in Phnom Penh this week warned the country could squander the opportunity, if it does not diversify its exports, overhaul its multi-layered bureaucracy and reduce the corruption that adds costs throughout the system.
Garments account for 80 percent of Cambodia's exports. No country in the world is as dependent on a single economic sub-sector. The country has no alternative export industries to help it diversify.
The garment industry has been successful in part due to a reputation for socially responsible manufacturing. The government is banking on high labor standards, which are required by governments and activists in developed nations, to maintain the industry's viability.
But the international Multi-Fiber Agreement, which provided some protection for the country's garment industry, expired at the end of last year. Now, Cambodia has to compete with industrial powerhouses like China. Experts say this leaves the country extremely vulnerable.
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