An effective way to address concerns of the private sector in Cambodia

The forum works through eight working groups that meet regularly to discuss issues such as tax and law, export, and tourism.

The government of Cambodia has an interesting and innovative method of identifying issues of concern from the private sector and addressing them–directly communicating through the Government Private Sector Forum. The 14th of such meetings wrapped up a few days ago.

As a whole, the forum works through eight working groups that meet regularly to discuss issues such as tax and law, export, and tourism. These groups are co-chaired by a Government minister and a representative of the private sector. In each group, private sector representatives identify and raise issues with the Government. The Government uses the group to review draft legislation and explain its policies. The eight working groups meet twice a year in a meeting that is chaired by the prime minister and gets a lot of attention. Last week’s attendance included the entire cabinet, many of the most important private sector executives, thirteen ambassadors, and many other development partners.

The exports group I regularly join, which is chaired by the Government’s senior minister of commerce and the chief of the garment manufacturers’ association, covers a range of issues, from the big to the seemingly small. Now, to get an idea of how important the garment industry is for this country, open your closet and check the tags in your clothes, I guarantee you’ll see a lot Made in Cambodia. In fact, it is the country’s main industry and it accounts for 80 percent of its exports. In one meeting, they discussed the government control imposed on khaki fabrics. The firms were concerned that such controls would lead to all sorts of shipments to be inspected. So they asked "what is khaki?" The head of the garment manufacturers’ association showed some 20 samples of all shades of the fabric, and a decision was made about what is and isn’t considered khaki.

The forum is important because of the resulting decisions. The World Bank Group’s  International Finance Corporation (IFC), which provides financial and technical support for the secretariat of the forum, conducted an evaluation (pdf) last year that showed very high returns to their support. It is also important because of the forum it provides for discussion. In one instance last week, there was a healthy exchange of ideas about the marked slowdown of economic growth in Cambodia. I think the meeting is also important for the private sector to hold the government accountable for its past decisions and to work toward a better investment climate.

_{Editor's note: Details in this posting were edited after publication.}