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Cambodia's Economic Challenge (Page 3 of 3)

At the same opening ceremony, Prime Minister Hun Sen gave his most explicit endorsement yet of a Cambodian trickle-down economic model, which has seen a wealthy few get richer while the majority remain among the poorest in Southeast Asia.

“Make the bosses rich in Cambodia,” Hun Sen said, Cambodia Daily reported. “Because when there are problems – for example when people need help with flooding – our local investors contribute a huge amount of money.”

Critics argue that Hun Sen’s emphasis on the rich has prevented many in the country from escaping poverty. The Gini coefficient, which measures inequality with zero being perfect equality, climbed from 0.35 in 1994 to over 0.4 in 2004. Although crime – a key concern for multinationals looking to invest here – has dropped in recent years, the U.S. State Department still warns potential American tourists that “Cambodia has a high crime rate, including street crime.” Furthermore, widespread protests over issues like land disputes, low wages and conditions in garment factories remain a frequent occurrence.

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About 300 workers protesting in Phnom Penh recently threatened a mass strike in the New Year should Hun Sen fail to lift the minimum wage above $61 per month, more than in Bangladesh but below average incomes in rival garment producing nations such as Vietnam.

Despite an ILO-led Better Factories initiative that was supposed to make Cambodia a model for low-income clothes manufacturing, there have been a series of reported mass-faintings in recent years and conditions are reportedly as bad as ever. Recently, the Phnom Penh’s appeals court upheld murder convictions on two men widely deemed to have been framed over the 2004 killing of prominent union leader and government critic Chea Vichea.

The judiciary is seen as among the weakest institutions in a country which languished in 157th place out of 174 countries included in Transparency International’s 2012 corruption perception survey. This was slightly better than its 164 ranking Cambodia received the previous year when Transparency International studied more countries.

“The system is still very corrupt,” says economist Chan Sophal. “[This] may be good for some investors but not so good for others.”

Steve Finch is a freelance journalist based in Bangkok. His work has appeared in the Washington Post, Foreign Policy, TIME, The Independent, Toronto Star and Bangkok Post among others.

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