AFP; Tourists take a stroll at Angkor Wat in this file photo.The Phnom Penh Post
Written by George McLeod
Thursday, 21 August 2008
Cambodia is seeking to regulate its burgeoning tourism sector, but the draft legislation to do so puts too much power in the hands of private businesses, an industry expert warns
The government is expected next month to pass its first legislation aimed at regulating the Kingdom's rapidly expanding tourism sector, but the proposed law gives too much power to the private sector and would produce an industry built around quick profits rather than sustainability, a development expert warns.
Tourism is one of the nation's few economic success stories, making up about 16 percent of GDP, up from 6.3 percent in 2000. Tourism receipts have risen from less than US$400 million in 2003 to more than $1.4 billion in 2007, according to government figures.
But such fast growth has left the government scrambling to bring uniformity to the sector.
The proposed tourism law, now under consideration at the Council of Ministers, has been in the works since 2006.
Industry sources laud the expected passage of regulatory measures, saying they would have important implications for development of the sector.
"We are looking forward to having a proper rule with clear policies for investment. The industry needs to know what can and can't be done," said Philip Set Kao, general manager of the Borei Angkor Hotel.
" REGULATION SHOULD NOT BE LEFT UP TO Private COMPANIES."
Set Kao, who is a former president of the Cambodian Hotel Association, said the industry hopes the law will cut red tape and licensing times for new projects and force transparency.
"We hope to see an industry based on transparency, not on [personal] connections," he said.
However, the draft law minimises the role of government while bringing business associations in as key policymakers.
The International Finance Corporation (IFC), the private sector wing of the World Bank that is playing a lead role in the law's drafting, said the Tourism Ministry would have no role in quality control measures.
According to the IFC's Business Issues Bulletin, the ministry would be responsible "only for safety and hygiene" under the assumption that "too much regulation provides opportunities for informal charges".
A copy of the draft law obtained by the Post Wednesday states that any changes made to quality control standards would first require consultation with the private sector.
According to the IFC briefing, government control could "distort the competitiveness of the tourism industry.
"The tourism law will provide a foundation for the private sector to self-regulate quality.... The Ministry of Tourism should resist the impulse to regulate," it said.
Tour operators and those involved in drafting the law say this is necessary to ensure efficiency and competitive pricing.
"Having government in control of tourism is not necessarily a good thing in [Cambodia]. You can have a lot of corruption," said one source who did not want to be named. "The goal has been to keep the government role to an absolute minimum.
"But one of England's top tourism experts warns that the law's free market emphasis could spell disaster for Cambodia.
"Pattaya [Thailand] is one example of what can happen if you allow the private sector free rein," said Dr Tim Forsyth, from the Development Studies Institute at the London School of Economics and Political Science.
He was referring to the notoriously hard-living resort town known more for its go-go bars than its cultural attractions.
"If you let companies operate without proper regulation, you don't get quality tourism," he told the Post Tuesday.
With more than two million tourists arriving each year, the danger, according to Forsyth, is that Cambodia could become overrun by companies that have little or no regard for the country's image, national monuments or environment.
The result, he said, could be more sex tourism, unregulated gambling and other activities that present a threat to the sector.
"[Regulation] should not be left up to private companies as there is too much diversity ... between the long-term big players who want to control quality and short-term sharks who just want to make fast profits, even if it destroys localities," Forsyth said.
Cambodia's national parks could also be at risk under the new law, which appears to have no environmental provisions.
That could mean more projects like the controversial golf courses and resort planned for the protected nature reserve on Bokor National Park. He added what he calls the IFC's pro-business slant, is also a serious concern.
"The World Bank is generally a pro-private sector organisation and the IFC is its private sector arm, so I would think they would be very inclined towards private interests.... This law seems to make that clear."
A Ministry of Tourism official, however, maintained that the government and private sector were working towards the same goal. "We consider that the public and private sector are in cooperation," said So Mara, undersecretary of state at the ministry.
Written by George McLeod
Thursday, 21 August 2008
Cambodia is seeking to regulate its burgeoning tourism sector, but the draft legislation to do so puts too much power in the hands of private businesses, an industry expert warns
The government is expected next month to pass its first legislation aimed at regulating the Kingdom's rapidly expanding tourism sector, but the proposed law gives too much power to the private sector and would produce an industry built around quick profits rather than sustainability, a development expert warns.
Tourism is one of the nation's few economic success stories, making up about 16 percent of GDP, up from 6.3 percent in 2000. Tourism receipts have risen from less than US$400 million in 2003 to more than $1.4 billion in 2007, according to government figures.
But such fast growth has left the government scrambling to bring uniformity to the sector.
The proposed tourism law, now under consideration at the Council of Ministers, has been in the works since 2006.
Industry sources laud the expected passage of regulatory measures, saying they would have important implications for development of the sector.
"We are looking forward to having a proper rule with clear policies for investment. The industry needs to know what can and can't be done," said Philip Set Kao, general manager of the Borei Angkor Hotel.
" REGULATION SHOULD NOT BE LEFT UP TO Private COMPANIES."
Set Kao, who is a former president of the Cambodian Hotel Association, said the industry hopes the law will cut red tape and licensing times for new projects and force transparency.
"We hope to see an industry based on transparency, not on [personal] connections," he said.
However, the draft law minimises the role of government while bringing business associations in as key policymakers.
The International Finance Corporation (IFC), the private sector wing of the World Bank that is playing a lead role in the law's drafting, said the Tourism Ministry would have no role in quality control measures.
According to the IFC's Business Issues Bulletin, the ministry would be responsible "only for safety and hygiene" under the assumption that "too much regulation provides opportunities for informal charges".
A copy of the draft law obtained by the Post Wednesday states that any changes made to quality control standards would first require consultation with the private sector.
According to the IFC briefing, government control could "distort the competitiveness of the tourism industry.
"The tourism law will provide a foundation for the private sector to self-regulate quality.... The Ministry of Tourism should resist the impulse to regulate," it said.
Tour operators and those involved in drafting the law say this is necessary to ensure efficiency and competitive pricing.
"Having government in control of tourism is not necessarily a good thing in [Cambodia]. You can have a lot of corruption," said one source who did not want to be named. "The goal has been to keep the government role to an absolute minimum.
"But one of England's top tourism experts warns that the law's free market emphasis could spell disaster for Cambodia.
"Pattaya [Thailand] is one example of what can happen if you allow the private sector free rein," said Dr Tim Forsyth, from the Development Studies Institute at the London School of Economics and Political Science.
He was referring to the notoriously hard-living resort town known more for its go-go bars than its cultural attractions.
"If you let companies operate without proper regulation, you don't get quality tourism," he told the Post Tuesday.
With more than two million tourists arriving each year, the danger, according to Forsyth, is that Cambodia could become overrun by companies that have little or no regard for the country's image, national monuments or environment.
The result, he said, could be more sex tourism, unregulated gambling and other activities that present a threat to the sector.
"[Regulation] should not be left up to private companies as there is too much diversity ... between the long-term big players who want to control quality and short-term sharks who just want to make fast profits, even if it destroys localities," Forsyth said.
Cambodia's national parks could also be at risk under the new law, which appears to have no environmental provisions.
That could mean more projects like the controversial golf courses and resort planned for the protected nature reserve on Bokor National Park. He added what he calls the IFC's pro-business slant, is also a serious concern.
"The World Bank is generally a pro-private sector organisation and the IFC is its private sector arm, so I would think they would be very inclined towards private interests.... This law seems to make that clear."
A Ministry of Tourism official, however, maintained that the government and private sector were working towards the same goal. "We consider that the public and private sector are in cooperation," said So Mara, undersecretary of state at the ministry.
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