CAMBODIA: PROSPECTS (DELETED) - THE PROBLEMS AS WE SEE THEM - ECONOMIC REFORMS

Created: 12/29/1989

OCR scan of the original document, errors are possible

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In the wake of Vietnam's withdrawal, thc regime in Phnom Penh is struggling on several fronts for survival.

war-damaged economy byeform program with free market principles and the pre-spect of commercial opportunities is attracting the interest of neighboring countries such as Thailand and Singapore. To enhance its domestic popularity and legitimacy in thc eyes of ihe international community, thc government nas introduced minor political reforms, including relaxing press restrictions and adopting Buddhism as thc state religion; elections have been promised for next year, but thc Communist Party is likely to retain its Icadii

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Thc Problems As We See Them

The departure of Vietnam's forces from Cambodia this yearecurity vacuum that the weak State of Cambodia regime is struggling, lo fill

o Reconstruct its devastated economy, especially in rural areas

oolitical structure that wil^storc domestic confidence and bolster international credibility. IB

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Reforms Under Way

Phnom Penh is trying co shore up its

domestic support byange of market-oricntcd economic reforms. The regime openly admits its past mistakes in trying to dismantle Cambodia's private sector in favor of tighter state control, and is experimenting with measures to reduce government involvement in the economy, boost productivity, and allow more local autonomy. Constitutional amendments give recognition to thc rights of private ownership and thc private sector is being encouraged to increase its output of consumer goods. The government is placing less emphasis on agricultural cooperatives, and allowing more leeway for peasants to work private plots of land. In addition, Phnom Penh nearly tripled government procurement prices for foodstuffs to stimulate production]

Phnom Penh is also attempting to expand its economic ties with the West to speed modernization ana ease the strain on the war-torn economy. Provincial authorities can now trade directly with foreign firms rather than through thc Trade Ministry in Phnom Penh, for example.

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Neighboring countries in the region are showing growing commercial interest in Cambodia. Despite thc economic embargo imposed following the Vietnamese invasionhe number of businessmen from Japan, Singapore, Hong Kong, Thailand and South Korea visiting Phnom Penh to explore opportunities in logging, seafood, and rubber is rising, according to press

The government may push for additional market-oriented change in thc coming months. According to press reports, state firms will be given greater autonomy to set wages and prices and will be allowed to retain aas yet undetermined-portion of their profits. Phnom Penh also claims it will eventually turn most state enterprises over to the private sector.

Internal Political Initiatives

Some of Phnom Penh's political reforms appear essentially cosmetic In April, for example, the regime made the symbolic gesture of changing the country's official name from the People's Republic of Kampuchea to the State of Cambodia, and altering its national anthem and flag to meet longstanding demands by resistance leader Prince Sihanouk. Other reforms contain more substance, including guarantees of freedom of thc press and thc establishment of Buddhism as thc state religion. The government is also restoring aging Buddhist shrines, including the famous Angkor Wat. These actions are almost certainly aimed at improving the regime's image inside Cambodia.

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Phnom Penh has also setew commission to consider amendments to the constitution and extended an invitation to the resistance and overseas Cambodians to participate.!

xcoraingress report, Ihe National Assembly is considering making additional amendments to the Constitution to introduce some pluralism in the elections either at an extraordinary session this month set to start in Januarx

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Cambodia's formal administrative structure is in flux as constitutional amendments approved in April are implemented in an attempt to appeal to Khmer resistance leaders. The provision for ihe KPRP's leadine role remains essentially intactJ

Council of Slate.

;ouncii nas uie constitutional authority to appoint ministers, create and abolish ministries, promulgate laws, and reject or ratify international treaties. Thc chairman of the Council, Heng Samrin serves as the nation's President.

Council of ministers. The Council of Ministers implements all governmental policies. The chairman, Hun Sen, servesefacto prime minister. There arc also five vice chairmen,insters, and five other ministry-level positions such as People's National Bank Director.

National Assembly. The National Asscmb!y|

s constitutionally enpowered to control thcthc Council of Ministers and the Council ol Slate, and to electthe top officials of both bodies,Chea Sim is

its chairman, i

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