Investors Play Down Impact of Labor Strikes
Economists and analysts on Thursday shrugged off the opposition CNRP’s threat to stage nationwide labor strikes, arguing that while such a move could lower profits for companies in the short term, it would not significantly deter foreign investors. Mr. Rainsy, who mentioned the possibility of strikes during a speech on Wednesday, said Thursday that he intended the strikes to disrupt the country’s economy if necessary and force the ruling CPP to make political reforms and properly investigate election irregularities. But observers of Cambodia’s economy say potential foreign investors are already well aware of political instability in the region and would not be deterred from bringing their business to Cambodia. “The threat of a general strike, or even if it is carried out, is unlikely to have a discernible impact on FDI [foreign direct investment] flows to Cambodia,” said Jayant Menon, lead economist at the Asian Development Bank’s Office of Regional Economic Integration, in an email. “Although a general strike could send a negative signal to the investing community, many countries have strikes, and they do not generally affect the investment climate in any significant way,” Mr. Menon added. … Bretton Sciaroni, chairman of the American Cambodian Business Council and an adviser to the government, said that while strikes might negatively influence Cambodia’s reputation for stability, they will be taken with a grain of salt by savvy investors. “Investors like political stability, period,” he said. “That has been a selling point for Cambodia.” And, while general elections in 1998, 2003 and 2008 have all brought temporary unrest, “the economy still managed to move on,” he said. … Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said it is too soon to predict the consequences of nationwide strikes on the garment industry—a sector well-acquainted with labor strife. … Mr. Rainsy said that while the length of his proposed strikes—likely to occur sometime next month—will “depend on the reaction of the government,” a longer labor demonstration may be necessary to force the ruling CPP to make certain “easy” political reforms the CNRP is demanding. …
Ben Woods
http://www.cambodiadaily.com/elections/investors-play-down-impact-of-labor-strikes-43694/
