Since the European Union announced in November 2018 that it would consider the suspension of its Everything But Arms (EBA) trade scheme enjoyed by Cambodia since 2001, there has been heated debate about the EU’s treatment of Cambodia. But the threat becomes reality this Wednesday.
The EU believed that democracy and the human-rights situation in Cambodia had deteriorated, prompting the bloc’s decision to consider the withdrawal of the EBA scheme to reverse Cambodia’s perceived democratic drift.
But for Cambodia, or at least for the government led by Prime Minister Hun Sen’s Cambodia People’s Party, the EU’s decision reflects a double standard.
The government thinks the EU is treating Cambodia unfairly by ignoring human-rights issues in other countries such as Vietnam and the Philippines. Given this belief, Cambodia vowed not to compromise its independence for the sake of EU trade privileges. Hun Sen has reiterated that Cambodia would not trade independence for foreign aid.
The EU’s EBA withdrawal is bad for Cambodia. It damages Cambodia’s international image and negatively affects its export-driven economy. In particular, the EBA withdrawal will impact the livelihoods of almost a million garment workers and a few million Cambodians who depend on those who work in the garment and footwear industries – the sector most affected by the EBA suspension.
As the EBA privileges are set to be partially withdrawn this Wednesday, there is no use crying over spilled milk. Cambodia must look ahead and take measures to mitigate the impact of the EBA withdrawal on its economy already severely damaged by the Covid-19 pandemic. So, what’s next for Cambodia after the EBA withdrawal?
There are at least three important areas Cambodia must address moving forward after the EBA withdrawal and amid the profound impact of Covid-19.
First, Cambodia must work harder to drive economic growth, particularly focusing on the economic recovery during and after the Covid-19 pandemic. It must continue to diversify its export markets, trying to secure free-trade agreements with key partners such as India, Mongolia, South Korea, the UK, and the Eurasian Economic Union, among others.
Cambodia has done a great deal as regards institutional reforms. For example, to facilitate trade and reduce costs for businesses, it has removed Camcontrol, launched online business registration, and finalized a free-trade deal with China. Despite these positive developments, Cambodia must do more to ensure its economy can bounce back strongly and quickly.
The country needs to improve its provision of services in the tourism industry. It must prioritize and invest heavily in agriculture, especially agribusinesses and the agro-processing industry. Cambodia must also work on improving the ease of doing business by providing attractive support schemes for local and international investors. More tax holidays and discounts on electricity usage may be a good starting point.
Second, Cambodia must continue to engage in deep institutional reforms. Thus far, the government has made considerable progress. However, more effort and investment must target the improvement of education quality and access to education. Research and innovation must be given a top priority.
Cambodia needs to ensure that youth considered the future of Cambodia will receive quality education that allows them to become the skilled labor force needed to drive economic development and realize its development vision.
As Cambodia has integrated itself into the region and the world, the country must run, not walk, to catch up with others. Quality education of its young seems to be the most viable option that can help Cambodia achieve its goals of having equal status with other states in Southeast Asia and beyond.
Cambodia must also prioritize the development of digital knowledge and literacy among its citizens. In the era of the Fourth Industrial Revolution, technological knowledge and digital skills are vital if Cambodia wants to stay relevant on the regional and global stage.
Third, Cambodia must reconsider the development trajectory of its domestic politics. The government has to ensure that politics does not always take precedence when it comes to policymaking. Currently, it appears that politics prevents the smoothness and success of deep and meaningful institutional reforms.
Politics has also provided Cambodia with bad publicity, especially as regards the country’s perceived drift away from democracy, following the dissolution of the main opposition party. The government must therefore work harder to improve Cambodia’s international image that has continued to falter.
It can start by supporting democracy and human-rights activists rather than putting barriers in front of them. The government needs to engage as many partners and stakeholders as possible to ensure and enhance respect for human rights and democratic values, believed by many to have gone backward.
As a country that upholds a multiparty liberal democracy, Cambodia must provide more space and freedom for its citizens to voice their concerns on matters relevant to them. Recent crackdowns on activists and those with opposition views are worrisome.
Political elites must constructively engage these actors and collaborate with them, not try to silence them through legal measures. Political activists, human-rights defenders, and youth are, no doubt, vital elements needed for the healthy development of democracy in Cambodia.
In the face of the EBA withdrawal and the enormous impact of Covid-19, Cambodia must do more, not less. The country must continue to engage in structural reforms, expand export markets, revitalize its untapped yet high-potential agriculture sector, improve the education system, nurture and uphold democracy, and move forward with the interests of the majority of Cambodians in mind.