We have many concrete examples both in neighboring countries in the region and in Cambodia, where problems of governance are regarded as major impediments to directing investment into productive sectors and attracting long-term investment to ensure sustainable economic growth. The current financial turmoil is also the clear manifestation of great economic and financial tragedy caused by the lack of good governance. The experiences of development landscape at the end of this century reveal that good governance has a real positive impact on the economy. In many cases, bad governance resulted in the loss of budgetary revenue, degraded the quality of investment and public services and eroded the public confidence in the government and reducing investment flows into a country. At present, many leaders therefore are unanimous to recognize the importance of good governance in ensuring successful implementation of economic reform.
Globalization requires good governance.
Free movement of capital and economic and trade liberalization requires a sound legal framework and a rigorous and responsible government, which conducts operations with transparency, accountability and predictability. These factors instill investors' confidence in the government and foster economic activities, thus allowing a country to grab the benefits and advantages of globalization. The RGC clearly understand these challenges. In order to meet the challenges, it not enough to require full implementation of the principles of democracy, through public participation in decision making. It will also be required to establish a sound legal framework, regulations and a code of conduct to ensure smooth and rigorous implementation of the reform measures and, in particular, to develop human resources.