CDC - U.S. DELEGATION STATEMENT

U.S. DELEGATION STATEMENT CAMBODIA CONSULTATIVE GROUP MEETING Phnom Penh June 20-21, 2002

The United States Delegation is pleased to participate in this sixth Consultative Group meeting on Cambodia. We wish to thank the Royal Government of Cambodia of hosting the meeting here in Phnom Penh, which provides an opportunity for us to meet and exchange views with a much larger number of Ministers and senior officials from the Royal Government of Cambodia than would otherwise have been possible. We thank the World Bank for its coordination efforts for this gathering. It is a pleasure to meet with our Cambodian and international friends and colleagues here in Phnom Penh, to discuss Cambodia’s accomplishments since the last time we were together in Tokyo, and to consider prospects for the future. The United States is dedicated to the proposition of democratic governance. For this reason, our most immediate concern regarding Cambodia’s development is the upcoming national elections scheduled for July 2003. These national elections must be truly free and fair. The political turmoil of 1997 and problems associated with the 1998 national elections constituted a significant setback for Cambodia. The Asian financial crisis also contributed to the economic contraction, but foreign direct investment still has not returned to pre-1998 levels as it has in many other countries of ASEAN. Cambodia cannot afford a return to violence, fear, and social turmoil in the next national election. The commune elections earlier this year fell short of being fully free and fair. Cambodian authorities made progress in reducing the level of violence but much more can and should be done in the next election to ensure safety for all participating in the national election. Protection and security of political candidates and party organizers in the provinces must be a top priority if the elections are to be free and fair. In addition, coercion and intimidation must be checked. We are encouraged by efforts being made to reform the National Elections Commission into a neutral and independent body that can make impartial decisions on election procedures. Ensuring that all parties competing in the election have equal opportunity to reach voters with information and political messages is also a crucial test of whether the elections will be considered fair. We strongly encourage the Royal Government to expeditiously allow all parties, including opposition parties, to have open access to electronic media, including radio broadcasts. Support for free and fair national elections will be a priority for U.S. assistance in the coming year. If the conduct of the 2003 national elections provides a safe environment for all participants to compete, equal access to broadcast media, and effective controls on election abuses, we can anticipate a basic reexamination of remaining restrictions on U.S. assistance to Cambodia. A decade has passed since the historic Paris Accords in 1991 and commitment to the principles of peace, democracy and the rule of law for the benefit of all Cambodians. The Royal Government of Cambodia has made notable progress in restoring peace and stability and in developing the institutions of democratic government, including the elected National Assembly and an appointed Senate. Cambodia has also made great strides in integrating into the world community through its membership in the UN and ASEAN and by seeking accession to the WTO. We congratulate the Royal Government of Cambodia for being designated as an Integrated Framework pilot country for accession to WTO, one of only three countries so designated by the WTO. The Royal Government of Cambodia’s pursuit of WTO is an indication of its laudable commitment to an open market economy and recognition of the private sector as the main engine of growth that we strongly endorse. Cambodia displays some factors favoring economic growth: it has managed the economy to keep inflation under control, made advances in revenue collection and shifted more resources from military and security to social sectors. Among countries in the region. Cambodia ranks high in terms of economic freedom. Results in economic development and poverty reduction, however, continue to be disappointing. With a GNP per capita income of only $280, Cambodia ranks among the poorest countries in the world. Foreign direct investment would bring desperately needed capital for business, create jobs and raise incomes, but flows to Cambodia on a per capita basis are among the lowest in ASEAN. Rule of law is key. A political decision still to be made in Cambodia is to substitute rule of law that benefits all Cambodians for the current system, which favors the wealthy or well-connected. Although a few reforms are underway, only when the decision for rule of law is unambiguously made, and comprehensive actions are taken to implement it, will international perceptions of the country’s safety and stability, the fairness of its laws, and the honesty of its courts give confidence to investors. Too often we must seek the intervention of high officials simply to provide legal protections to investors and businesses, which should enjoy such basic protection as a matter of course. Delays or very slow progress in many reform areas unfortunately send a signal that fundamental change will not be made soon. The Anti-Corruption Law to define and establish penalties for corruption has been in process since 1995 but has not been submitted to the National Assembly. The Immovable Properties Law passed last year is clearer than previous law, but the implementing regulations are not in place to ensure that the law is not misused. Set-backs in curbing illegal logging undermine confidence in the overall legal and regulatory environment. We encourage the Royal Government to use the Integrated Framework for accession to WTO as a framework for introducing rule of law to Cambodia and attracting foreign investment. Cambodia’s economy is highly dependent on only two sectors, garments and tourism, neither of which create enough jobs to provide full employment. We are concerned that when the garment quotas are removed in 2005, many of the jobs now held will be lost. The growth of small and medium businesses is too slow to create many jobs. Several NGOs in Cambodia have reached a significant level of development in the past decade, and they can play an important role in promoting transparency in public policy. We urge the Royal Government to consult with appropriate NGOs when drafting laws and regulations and to permit unrestricted lawful advocacy by NGOs on behalf of the social, economic, and political rights of Cambodians. Cambodia’s most important resource is its people. We applaud the shift of more government resources to education and basic health, while recognizing that the investment per capita is still quite low. Cambodia’s attention at the highest levels to the HIV/AIDS epidemic and program success is welcomed. The United States Government looks forward to working closely with the Ministries of Health and Education as it implements programs in reproductive, and child health, HIV/AIDS, and basic education. The United States Government shall continue robust programs in de-mining and aid to war victims and the disabled, in addition to our priority support for the conduct of free and fair 2003 elections.