Last week, I traveled
to Singapore to promote U.S. investment in Cambodia. Two weeks prior, I
was in Bangkok doing the same thing. I plan to go on similar trips in
the region next year. Why am I taking these trips? What do I hope to
accomplish? Quite simply, I am working on expanding the middle class
in Cambodia. A strong middle class is the best engine for developing
the economy and reducing poverty. In the United States, the growth of
the American middle class gave average working people a stake in the
economy and civil society. Instead of living hand-to-mouth, middle
class Americans began to think about the future – we saved money for
retirement, we made sure our children received a quality education, and
we made sure the government was responsive to our needs. America is
often called “the land of opportunity” because, no matter how humble
your beginnings, you will have the chance for a livable wage and decent
schools for your children. It was the growth of the middle class that
made this possible.
How do we expand the middle class in
Cambodia? In one sense, expanding the middle class is like a jigsaw
puzzle – you need all the pieces to fit together in order to have a
complete picture. The first piece lies in creating the right conditions
for economic growth. The Cambodian government has made significant
progress in laying the foundation for growth by creating a relatively
pro-business environment. Cambodia, for example, allows 100 percent
foreign ownership of businesses, exemptions from export taxes, duty free
imports of capital goods, favorable corporate tax policies, and a
liberal policy on work permits for expatriate personnel. These
policies, although a good start, still need to be taken further. To
help develop recommendations on how the Cambodian government could
improve the business environment to further open the Cambodian market to
foreign investment – particularly through regulatory and legislative
changes– I have formed a team comprised of Embassy personnel and members
of the American Chamber of Commerce.
The second piece of the
puzzle is developing the country’s human capital. While people often
point to Cambodia’s substantial timber reserves and petroleum resources,
its greatest asset is its youth. With nearly 70 percent of the
population under 35 years of age, Cambodia has a large and growing
supply of labor. If the labor force expects to reach the middle class,
it will need greater skills. The U.S. government has spent millions of
dollars on training and education for Cambodian citizens to lay the
foundation for middle class development. For example, USAID’s Improved
Basic Education in Cambodia project is helping the Cambodian government
develop a school curriculum to benefit over 140,000 students,with 5,600
students receiving scholarships to support their lower secondary
education. The U.S. government also has about 115 Peace Corps
volunteers in Cambodia, who are training primary and secondary teachers
as well as working to build the capacity of healthcare professionals in
the provinces. By focusing on education and training, we will help
Cambodia’s labor force migrate to higher-wage, higher-skilled jobs that
will expand the middle class.
The final piece of the puzzle is
bringing these higher-skilled jobs to Cambodia. Without good-paying jobs
that allow ordinary Cambodians to buy everyday consumer goods like
food, housing, and clothes, the Cambodian economy faces a formidable
challenge in reaching the next stage of development.
One reader
has asked, “Why don’t huge U.S. corporations invest in Cambodia?” My
trips to Bangkok and Singapore were meant to find an answer to this
question and to encourage regionally-based and sizeable U.S. companies
to expand their operations to Cambodia. I gave speeches to U.S.
business chambers, met individually with scores of businesses ranging
from computer manufacturers to oil companies, and led a business
roundtable. At every opportunity, I pointed out that Cambodia has a lot
to offer U.S. businesses looking to get in on the ground floor of a
surging market. While the growth rates of many countries in Southeast
Asia are flattening, Cambodia is far from reaching its peak.
But
like putting together any jigsaw puzzle, knowing what the pieces are
and actually fitting them together are two very different things.
Cambodia needs to appreciate the importance of how human rights, open
political discourse, and rule of law fit into the investment and middle
class mosaic. A more open political space, greater transparency, and
less corruption would benefit the entire country by encouraging foreign
investment. If Cambodia can take substantial, concrete steps towards
resolving these issues, it will mean more investment from U.S. companies
and from businesses the world over. Remember, it is not what you say,
but rather what you do that is important.Or as my high school Latin
teacher would often tell me acta,non dictum, which means “deeds, not
words.”
As we can see, the expansion of the middle class and the
number of higher-paying skilled jobs are vital factors to economic
growth in Cambodia. Please accept my heartfelt wishes for a happy
holiday and thank you all very much for reading my column. As always,
you may send your questions to me in English or Khmer at
AskAMBToddPP@state.gov,and of course, you can follow my blog at
http://blogs.usembassy.gov/todd/.
William E. Todd is U.S. Ambassador to the Kingdom of Cambodia
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