Cam­con­trol may leave bor­der

SpaceX set to lay off 10 per cent of its work­force

The Phnom Penh Post - - BUSINESS - Hor Kim­say

PRIME Min­is­ter Hun Sen re­cently un­veiled a new cam­paign to boost eco­nomic in­de­pen­dence and re­duce the re­liance on pref­er­en­tial trade sta­tuses of­fered by ad­vanced coun­tries, say­ing the gov­ern­ment will pro­vide bet­ter trade fa­cil­i­ta­tion and elim­i­nate un­nec­es­sary pro­ce­dures.

At a din­ner with 5,000 Cam­bo­dian jour­nal­ists on Fri­day, Hun Sen re­vealed a se­ries of trade fa­cil­i­ta­tions and an­nounced a plan to relieve Cam­con­trol from its in­spec­tion du­ties at bor­der check­points to re­duce the bur­den for busi­nesses.

Cam­con­trol is the Min­istry of Com­merce’s Cam­bo­dia Im­port-Ex­port In­spec­tion and Fraud Re­pres­sion Direc­torate-Gen­eral.

He said the cus­tom clear­ance pro­ce­dures will be re­duced and in­for­mal charges will be barred. He said the fee for con­tainer goods scan­ning will be re­duced in or­der to re­duce the cost for traders.

“[We will] open a cam­paign to strengthen Cam­bo­dia’s in­de­pen­dence in which some [de­ci­sions] will help our busi­nesses and al­low Cam­bo­dia to sur­vive de­spite the ab­sence of pref­er­en­tial trade treat­ment.

“I de­cided just now that along bor­der check points, gov­ern­ment in­sti­tu­tions are no longer needed aside from im­mi­gra­tion po­lice and cus­toms for ex­port and im­port goods. Only these two are al­lowed and ev­ery­thing else will need to be re­moved – even Cam­con­trol,” he said.

Hun Sen did not dis­close when the new de­ci­sion will come into force. The EU and US are the King­dom’s main mar­kets.

The EU warned the King­dom in Oc­to­ber that it would lose its Ev­ery­thing But Arms ini­tia­tive to the world’s largest trad­ing bloc, in a puni­tive re­sponse to the King­dom’s al­leged move away from democ­racy.

Two US se­na­tors on Wed­nes­day in­tro­duced the Cam­bo­dian Trade Act of 2019 bill, re­quir­ing the ad­min­is­tra­tion to re-ex­am­ine the King­dom’s el­i­gi­bil­ity to ac­cess the pref­er­en­tial trade treat­ment granted by the US un­der the Gen­eral Sys­tem of Pref­er­ences.

Cen­tre for Pol­icy Stud­ies di­rec­tor Chan Sophal said on Sun­day that re­duc­ing bar­ri­ers and costs at the bor­der will help ex­porters re­duce trad­ing costs and time. In ad­di­tion to for­mal fees, he said the re­duc­tion needs to be ex­tended to in­for­mal fees.

“The move will help im­prove Cam­bo­dia’s com­pet­i­tive­ness, but I don’t think it is suf­fi­cient to com­pen­sate for the loss of trade pref­er­en­tial sta­tus if it’s re­moved. In or­der to be a full-fledged com­peti­tor, Cam­bo­dia needs to fur­ther re­duce the cost of do­ing busi­ness at each step – from start­ing a busi­ness to get­ting qual­ity and low tar­iff elec­tric­ity and to [ob­tain­ing] qual­ity le­gal and ju­di­cial ser­vices,” Sophal said.

He said Cam­bo­dia is not en­dowed with many nat­u­ral con­di­tions for ef­fi­cient lo­gis­tics con­nect­ing to its sea­ports and thus, the busi­ness en­vi­ron­ment has to com­pen­sate for it.

The Gar­ment Man­u­fac­tur­ers As­so­ci­a­tion in Cam­bo­dia (GMAC) told The Post on Sun­day that the new gov­ern­ment de­ci­sion is a good ini­tia­tive as it will fa­cil­i­tate trade and lower the costs of do­ing busi­ness.

He said that re­duc­ing cus­toms clear­ance pro­ce­dures to boost busi­ness com­pet­i­tive­ness is some­thing pri­vate sec­tors have been work­ing con­struc­tively with the gov­ern­ment through var­i­ous mech­a­nisms such as the Gov­ern­ment-Pri­vate Sec­tor Fo­rum.

Ac­cord­ing to GMAC, there are two main in­spec­tions en­ti­ties from the gov­ern­ment when it comes to the King­dom’s ap­parel sec­tor – cus­toms and Cam­con­trol of­fi­cials.

“We al­ways pay fees for goods in­spec­tion by cus­toms and Cam­con­trol, so the de­ci­sion to re­move Cam­con­trol from [goods in­spec­tion] pro­ce­dures will help to re­duce our costs,” it said.

The GMAC said that Cam­con­trol in­spec­tion fees were higher than cus­tom in­spec­tion charges, and are set at 250,000 riel ($62.50) for the first con­tainer – with de­creas­ing fees for sec­ond and third con­tain­ers, while cus­toms charges are 60,000 riel per con­tainer.

“The fee charged for Cam­con­trol in­spec­tion has been part of our cost bur­den and it makes the cost of doc­u­men­ta­tion in our coun­try higher com­pared to other coun­tries.

“More re­forms will re­duce our pro­duc­tion cost and if our labour pro­duc­tiv­ity keeps in­creas­ing, our in­dus­try will sur­vive in any tough sit­u­a­tion [such as the with­drawal of the pref­er­en­tial agree­ment],” the GMAC said.

Keo Mom, the CEO of Ly Ly Food In­dus­try Co Ltd, which ex­ports to 11 coun­tries, said on Sun­day that the gov­ern­ment should only relieve Cam­con­trol of its in­spec­tion du­ties for ex­port goods and it should re­tain Cam­con­trol’s qual­ity in­spec­tions for im­ports.

“If the gov­ern­ment re­moves the in­spec­tion pro­ce­dures for only ex­ports, it will en­cour­age lo­cal pro­duc­tion to strengthen ex­port po­ten­tial. But, if we re­duce the in­spec­tion pro­ce­dures for im­port goods too, it will se­ri­ously af­fect us as the flow of low qual­ity and ex­pired goods to our coun­try might in­crease and af­fect peo­ple’s health.

“Neigh­bour­ing coun­tries re­quire our prod­ucts to go through a lot of in­spec­tion pro­ce­dures. So, if we re­move in­spec­tion duty for im­ports, we are go­ing to lose an ad­van­tage and this will af­fect lo­cal pro­duc­tion,” she said. SPACEX plans to lay off 10 per cent of its more than 6,000 em­ploy­ees, a source fa­mil­iar with the de­ci­sion said on Fri­day.

“To con­tinue de­liv­er­ing for our cus­tomers and to suc­ceed in de­vel­op­ing in­ter­plan­e­tary space­craft and a global space-based in­ter­net, SpaceX must be­come a leaner com­pany,” said the Cal­i­for­nia-based com­pany, headed by Elon Musk.

“Ei­ther of these devel­op­ments, even when at­tempted sep­a­rately, has bankrupted other or­gan­i­sa­tions,” it added.

“This means we must part ways with some tal­ented and hard­work­ing mem­bers of our team.”

It added that the trim down was “only due to the ex­traor­di­nar­ily dif­fi­cult chal­lenges ahead”.

Cit­ing an email sent to em­ploy­ees on Fri­day, the Los An­ge­les Times said the com­pany was of­fer­ing those af­fected a min­i­mum of eight weeks’ pay and other ben­e­fits, in­clud­ing ca­reer coach­ing and re­sume as­sis­tance.

The an­nounce­ment came as SpaceX on Fri­day launched a Fal­con 9 rocket from Van­den­berg Air Force Base in Cal­i­for­nia car­ry­ing 10 com­mu­ni­ca­tions satel­lites.

Founded by Musk, SpaceX makes most of its money from multi­bil­lion dol­lar con­tracts with Nasa and satel­lite launches.

SpaceX in Novem­ber won au­tho­ri­sa­tion from US of­fi­cials to put nearly 12,000 satel­lites into or­bit in or­der to boost cheap, wire­less in­ter­net ac­cess by the 2020s.

And the Wall Street Jour­nal re­ported last month that the com­pany was rais­ing $500 mil­lion from in­vestors to help launch its satel­lite in­ter­net ser­vice.

Se­rial en­tre­pre­neur Musk has risen to promi­nence with a se­ries of am­bi­tious ven­tures, es­pe­cially Tesla, which has boosted pro­duc­tion of its Model 3 elec­tric car and has con­tin­ued to en­joy strong de­mand for the ve­hi­cle.

Other Musk ven­tures in­clude OpenAI, Neu­ralink and the Bor­ing Com­pany, which fo­cuses on in­fra­struc­ture and tun­nels.

But Musk has also drawn plenty of crit­i­cism over un­con­ven­tional and at times er­ratic be­hav­iour – after ad­mit­ting last year that he has strug­gled with ex­haus­tion.

In an in­ter­view broad­cast last month, Musk openly mocked the US Se­cu­ri­ties and Ex­change Com­mis­sion after agree­ing to a $20 mil­lion fine to set­tle fraud charges the agency had brought over Musk’s quickly aborted ef­fort to take Tesla pri­vate.

And in Septem­ber, he raised eye­brows with an ap­pear­ance on a pod­cast with co­me­dian Joe Ro­gan, which saw him sip whiskey and smoke weed while mus­ing at length about ar­ti­fi­cial in­tel­li­gence, colonis­ing space, and the need to give love a chance.

Later that month, he was sued by a British caver who had helped res­cue 12 boys trapped in Thai­land after Musk called him a “pedo guy” and a “child rapist”.

CAM­CON­TROL

Cam­con­trol of­fi­cials launched a city-wide in­spec­tion of Phnom Penh’s mar­kets on Satur­day.

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