Cambodia Economy Bucks Regional Trend

Driven by garment and improved agricultural export markets, Cambodia has bucked the wider trend of slowing Southeast Asian economies, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

ESCAP’s semi-annual Economic and Social Survey of Asia and the Pacific, published Wednesday, puts Southeast Asia’s annual growth at 4.6 per cent, continuing a three-year consecutvive, below 6 per cent trend for the region.

But despite significant infrastructure and human capital difficulties, Cambodia’s economy continues to show year-on-year above average growth and is on track to record 7.2 per cent growth in 2014, slightly down from 7.6 in 2013, the UN organization’s study says. The Kingdom’s inflation rate remained stable at 2.9 per cent in 2013.

“The least developed countries in the subregion, namely Cambodia, the Lao People’s Democratic Republic, Myanmar and Timor-Leste, maintained high growth rates, underpinned in part by steady inflows of foreign investment, especially in the resource sector,” the study reads.

The study adds that while China, India, Indonesia and Malaysia sustained or even increased the income gap between the richest 20 per cent and the poorest 20 per cent of their countries, Cambodia, fuelled by an increasing labour force, was one of the few that saw a decrease in income inequality.

But the UN-backed study also pointed out that Cambodia, along with its fellow least developed neighbouring countries, continues to lag behind the rest of the world with regards to integrating into global supply chains.

This in turn, “limits their ability to diversify their economies and engage in higher value-added activities,” the study says.

And in the garment sector, which accounts for 80 per cent of the Kingdom’s total export market, there is still room for improvement.

“The minimum wage in the (Cambodia’s) garment industry, which employs about 600,000 workers, was raised; yet, working conditions still need to be improved,” the report says.

Source: Phnom Penh Post | August 8, 2014 | By: Eddie Morton

Cambodia Far From IP Targets

Cambodia is still a way off implementing World Trade Organization (WTO) rules on intellectual property rights, despite a deadline to do so in just over a month.

At the end of June, the group of the world’s 49 least developed countries (LDCs), including Cambodia, run out of time on an al­ready extended exemption that means they are not obliged to enforce copyright and prevent vendors from selling pirated or counterfeit goods.

In March, members of the WTO Council for Trade-related Aspects for Intellectual Property Rights, agreed in principle with a request from LDCs to extend the deadline, accepting that poorer countries lack the capacity to comply with the rules. Talks are still ongoing to negotiate an extension.

The deadline has already been extended once, from 2005 to this year, and in Cambodia at least, the availability of goods in breach of intellectual property rules—counterfeit medicines, fake fashion brands, pirated books, movies, music and computer software—continues unabated.

If the deadline is not extended, Cambodia could be at risk of trade sanctions being implemented by the WTO if another member state files a complaint against the country.

Var Roth San, director of the intellectual property department at the Commerce Ministry, said Cambodia still lacked the resources to enforce intellectual property and was therefore hoping that the deadline would be delayed.

“The state doesn’t have enough money to hire many officials to work on it and the work is mounting every day,” Mr. Roth San said, explaining that officials with the necessary English skills to enforce intellectual property were loath to accept the civil servants wage on offer for such work.

A national strategy had been drawn up on the issue, and would be enacted after the national election in July, he said.

Pily Wong, chief representative and country manager for Microsoft in Cambodia and president of the ICT Business Association, said that 95 percent of software used in Cambodia is pirated, preventing both international firms and local startups from being successful here. He said the government has shown some willingness to act, but progress to enforce the rules has been slow.

“The Cambodian government is well structured; all the enforcement arms are there. It’s about the good will of the government,” he said, adding that while action has been taken against intellectual property breaches, it has only occurred after a complaint has been filed.

“The law enforcers are telling the intellectual property rights owners that if they want them to enforce, you should place a complaint,” Mr. Wong said, explaining that the economic police or government officials involved are known to ask for money in return for enforcing the rules. “I think everybody knows that in Cam­bodia, relationships and connections are very important,” he said.

Mike Gaertner, operations officer at Sabay Digital Corporation, which runs media operations including online gaming in Cambodia, said the government was right not to consider intellectual property rights its top priority in improving the business environment.

“I don’t see many people in Cam­bodia struggling or having a failing business because of this,” he said. “It is more that it’s being pushed by international corporations to protect their intellectual property.”

Professor Brook Baker, an academic at the school of law at Northeastern University in Massachusetts, who authored a petition of academics calling on WTO members to extend the deadline, said by email that for a country like Cam­bodia to comply with the rules was “quite an onerous responsibility.”

It would involve setting up functioning patent and trademark offices, and training government officials, lawyers and judicial officials to recognize, apply and en­force intellectual property rights, he said.

Countries should be exempt until they are no longer an LDC, a U.N.-defined category, he said. Mr. Baker said that European countries and the U.S. were negotiating “in bad faith” to force poorer states to enforce rules that will not benefit them.

“This extraordinarily burdensome, costly, and time-consuming process is established essentially to benefit foreign right holders because experience shows that [intellectual property] offices, for example Patent Offices, deal primarily (over 95%) with patent applications from foreign entities,” Mr. Baker said.

Source: Cambodia Daily | May 27, 2013 | By: Simon Lewis & Chin Chan