Tin Sokhavuth
Recently, political parties have been talking a lot about their political agenda. It seems like they are preparing for the upcoming elections. For the CPP, its central committee organized the annual national congress to talk about administration reform in ministries where the relevant functions were held by its members.
For the CNRP, they revealed a plan to get closer to rural Cambodians in order to help them live in better conditions. They also planned to strengthen and/or build a solid CNRP network at the grassroots level.
But how about the development of the “private sector” that is the most important pillar in all liberal economic countries?
It is obvious that the opposition parties always try to avoid talking about the development in order to avoid boasting about the achievement of the ruling party. More than that, sometimes they see development as a negative, saying in essence: “Wherever there is development, there are also tears from the people forcibly evicted.” For this reason, we never hear anything about the private sector from the opposition parties.
In theory, the CPP considered the private sector as the “engine of economic growth” in its Rectangular Strategy that served as the main pillar in its political agenda to develop the country, since its three mandates of legislation.
Nevertheless, it was not the CPP alone that conceived this Rectangular Strategy; the United Nations Development Program (UNDP), the World Bank, donor countries and many experts around the world contributed to the creation of this development program. So it could be seen as a perfect development program for all Cambodians without political distinction.
“The private sector plays a key role in accelerating economic growth in market capitalist economies,” says the website “encyclopedia.com”.
The website also mentions that the economy of all the rich countries around the world relies heavily on private sector. For example, in 2004 the private sector share of gross domestic product (GDP) in the US was 89.46 percent, in Germany 85.32 percent, in Japan 84.38 percent, in France 80.73 percent and in Australia 85.85 percent.
“Hence, in a capitalist market economy the private sector is mostly responsible for most of the country’s investments, for the generation of new job opportunities, and for the improvement of standards of living, and it is the source of most technological developments,” added the website.
The website also said that for a country where a planned economy was dominant in the past like Cambodia, the role of the government is very crucial in making laws and regulations for the private sector to function properly. At the same time, the private sector requires an adequate basic infrastructure such as water, power, land, transportation and communication services that have to be established by the government.
The existence of the private sector in Cambodia is very young after two decades of civil war. The culture of the private sector is not deeply rooted in Cambodian society. In the old days, it was the job as a government official that impressed Cambodian people. Nowadays too, certain government officials do not give much importance to businessmen and employees in companies. The words “civil servant” do not applied to them. They act rather like “civil boss” than “civil servant.”
There is a Cambodian song in the old days revealing this kind of thought: “Mom, I don’t want to stay here to work in our rice fields, I would like to be a lady of a high ranking government official.” So the choice for the singer is only to be a farmer or the wife of a high ranking government official, not just the wife of a businessman or an employee in a company.
Hence, the initiative of the young entrepreneurs to create a company or a small business has to be encouraged. In the same way, the spirit of entrepreneurship should be widely disseminated in the countryside.
On the contrary, in many rich countries with capitalist market economy, for example the US, the culture of the private sector has been rooted deeply in American society for centuries.
Alexis de Tocqueville, a French political thinker and historian best known for his work “Democracy in America,” published in 1835 after his travel to the US in 1831, wrote in his book:
“As one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?”
Besides the private sector, the banking sector is also very new for the average Cambodian. Time is needed for them to understand the necessity of loans from banks and/or microfinance institutions to create and run their new businesses.
The transfer from a planned economy to free market economy led to the privatization of certain state-owned institutions in the business field as well as in other fields. In the context of Cambodia, the privatization is almost completely done; there is only the healthcare sector that is still in the process of autonomization.
But many people complaint against some autonomous hospitals. They said that doctors and nurses in those hospitals behave as in the old day of state-owned hospitals. Even though patients paid for hospital fees, doctors and nurses still curse the patients by insulting them and/or not providing them a proper healthcare service.
So, those autonomous hospitals should also be transferred to the private sector in order to make the delivery of healthcare service better?
On the other hand, the private sector will play the most important role in the ASEAN Economic Community (AEC) where there will be free flow of goods, free flow of service, free flow of investment, free flow of capital and free flow of skilled labor.
In the context of AEC, Cambodia has the edge to attract foreign direct investment (FDI) due to its favorable legal framework and cheap labor in the region, as stated by former US Deputy Secretary of State Richard Armitage:
“Cambodia has developed one of the most progressive, business friendly regulatory frameworks in the region. FDI, however, needs more than just a pro-business regulatory framework to grow. It needs confidence – in the government, the rule of law, and the sanctity of contractual obligations.”
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