Wednesday night’s riots have left investors here stunned, and if the government is to allay the creeping fear many are starting to feel, it will have to work fast, investors said Thursday.
“The message is bad,” said Raphael Thallinger, the former president of the Franco-Cambodian Chamber of Commerce and a member of the government-private sector working group on manufacturing.
Wednesday night’s riots not only took a fiscal toll, he said, but go beyond property loss to affect investor confidence.
“The damages are much deeper. Many things have been destroyed,” he said.
Investors are now looking for a “strong reaction” from Prime Minister Hun Sen, he said. “He has to stop this immediately. Cambodia should apologize. It’s now obvious.”
Minister of Commerce Cham Prasidh could not be reached for comment Thursday.
Tim Smyth, an economic analyst at Indochina Research, said Thursday that any impact from the riots would be “short term.”
“It just increases uncertainty,” he said.
The Thai state-run Krung Thai bank temporarily shut down its Cambodia branch and recalled its staff on Thursday, Dow Jones news service reported.
The bank said its headquarters in Thailand will handle all businesses for its Phnom Penh branch, so the closure won’t have any impact on customers, mostly Thai businessmen in Cambodia, Dow Jones reported.
Both Thai Airways and Bangkok Airways canceled flights between Phnom Penh and Bangkok Thursday.
Members of the business community on Thursday were assessing possible personal and property security risks, said Bretton Sciaroni, a member of the government-private sector working group on law, taxation and governance.
“Everybody is concerned about security,” he said Thursday morning. “Businesses had reached a level of comfort about security here,” Sciaroni said. Now, “nearly everybody is re-examining their personal security, their business security…. Of course this is not good for investment.”
The government has postponed a scheduled biannual meeting of private investors, Sciaroni said.
“I think it was a wise decision,” he said, adding that the move showed the government was giving due attention to the possible effects of Wednesday night’s riots.
However, the damage may already be done, businessmen said Thursday. The combination of the 1997 factional fighting, the 2000 attack on Phnom Penh by the Cambodian Freedom Fighters, and the riots are likely to have a profound effect on the psyche of both current and potential investors, businessmen said.
Moreover, by letting the situation spiral so far out of control, the government likely will have little success fixing the situation, said one Phnom Penh business observer, who requested anonymity.
“I don’t know what steps they can take,” he said. “It will be very difficult for them to come out of this.”
“It’s just disgusting,” he continued. “It put this country back 15 years. At least.”
(Additional reporting by Kay Kimsong)
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