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Cautious optimism for the coming year

Archive. (Photo by Sovannara/Xinhua)

In ushering in the first day of the new year, Cambodia is calling for concrete reforms. The external risks especially stemming from the revocation of the Everything But Arms (EBA) trade deal are looming large. This year presents not only challenges and risks but also opportunities.

The most important international event for Cambodia this year is the convening of the 13th Asia-Europe Meeting (ASEM), with the participation of more than 50 countries and international organisations. Cambodia will use this important platform to further strengthen an open, inclusive and effective multilateral system as well as a rules-based international order. Aside from ASEM, 2020 is also the time for the Prime Minister to seriously contemplate a cabinet reshuffle, not just a minor change of moving positions but rather introducing second generation leaders who have the capacity and political will to build a clean and smart government. The new cabinet members must have courage to provide innovative ideas and solutions, not just be mere “yes men”.

Technocracy and meritocracy must be introduced at all government ministries and agencies. This time a major cabinet reshuffle is necessary in order to address chronic, critical issues such as public service reforms, systemic corruption, land issues and socio-economic inequality between urban and rural areas.

The government needs to fix priority sectors such as education, health, rural development, agriculture and sustainable tourism.

There was a high expectation that under the new leadership, educational reforms would have delivered many results. However, there are outstanding issues that the ministry of education needs to address, especially the quality of education, research and development and the advancement of mathematics and science in the curriculum. The quality of higher education remains a problem.

Reforms in the healthcare sector is slow, due to the lack of leadership.

Reforms in the agriculture sector and rural development are far from satisfactory. The rural economy becomes more vulnerable to external shocks because of the lack of infrastructure that can sustain rural livelihoods. Urban-rural development inequality poses a significant threat to peace, stability and the prosperity of the country. The rural poor are facing more risks and vulnerabilities because of climate change, natural disasters, fluctuation of the price of agricultural products, the lack of market access and indebtedness.

Any lingering uncertainties that the government may have unwittingly created, such as the fate of Kem Sokha, the possibility of the Everything But Arms (EBA) trade deal revocation and its spillover effects on Cambodia’s economy must be dealt with. The external risks for Cambodia in 2020 are relatively high.

The lingering EBA issue is producing some uncertainty, with many experts’ voices out there, resulting in the business environment being less than conducive, especially for foreign investors. This has been compounded by increasing taxation measures, the increasing cost of doing business and rising labour costs.

In this kind of an environment, potential investors may want to adopt a wait-and-see attitude, and this is not good for the economy. As one of the pillars of the Cambodian economy, the construction sector is in a bubble.

The way forward is for Prime Minister Hun Sen to have the political and personal will to implement contentious policies and laws, even if it means marginalising some of the ruling parties power brokers. He should continue efforts at forging bilateral trade deals with as many foreign nations as possible to neutralise or lessen the blow of threats or actions by multilateral trade partners and not kowtow to external or internal pressures.

Mr Hun Sen’s obligation and responsibility is to the 16 million Cambodian people. Strengthening national sovereignty and independence is therefore of the utmost importance. He needs to be firm on the principles of independent foreign policy. Public perception matters. Cambodia needs to invest more efforts in explaining the public about its reforms and foreign policy. The accusations by the US and some its allies that Cambodia is hosting Chinese military bases are dangerous to the national security and wellbeing of the Cambodian people.

Mr Hun Sen’s must protect Cambodia against enemies and must instill a clear direction, such as a succession plan and a timeframe for such a plan, grooming not only a successor but also next-generation leaders and building an economy to optimise natural resources and cultural and historical heritage.

Reforms at the sub-national level including decentralisation are necessary. Rural politics defines the fate of the Cambodian People’s Party (CPP) because urban politics is usually  against the establishment. If the CPP-led government cannot provide opportunities for the rural people, the powerbase of the CPP will be significantly reduced.

The statement warning the governor of Thong Khmum to ensure the success of the border market with Vietnam or face the axe is a welcome move because it indicates key performance indicators being set. This should transcend into action on the ground. Acknowledging the challenges for 2020, We are optimistic that there will be some concrete reforms and new drivers of economic growth will help sustain the dynamism of the economy. Innovation and digital economy, innovative solutions to rural development and independent foreign policy are critical for the Kingdom as it navigates through uncertain times ahead.

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