101 East - Interview with Hun Sen - 26 June Part 2

101 East - Interview with Hun Sen - 26 June Part 2 

On the eve of elections, Prime Minister Hun Sen gives an exclusive interview to 101 East host Teymoor Nabili, about his plans for Cambodia's future.

101 East - Interview with Hun Sen - 26 June Part 1

On the eve of elections, Prime Minister Hun Sen gives an exclusive interview to 101 East host Teymoor Nabili, about his plans for Cambodia's future.

Prime Minister Samdech Hun Sen Interview

Prime Minister 

Samdech Hun Sen

Interview

Can Cambodia maintain economic growth and social development against the backdrop of the global economic recession?

The global recession has taken us by surprise, but it seems to be a good test of our economic fundamentals. Cambodia’s economy is running some risk of slowing down amid the current crisis and as part of the business cycle. Real GDP growth is expected to be around 6.5 per cent for 2009, a bit lower than the growth rate for 2008. Key sectors like garments, tourism, construction and agriculture have been affected. The garment sector has been threatened by the sharp drop in demand in the US and EU; tourist arrivals declined significantly during late-2008 and early 2009; the construction sector has been slow; and the price of Cambodia’s main agricultural products, such as rice and rubber, has also dropped. Whilst we cannot eliminate the impact entirely, we can, however, lessen the magnitude of the impact on our economic and social development.

What actions are you taking to lessen the impact?

We have put in place a response mechanism, adopting a two-pronged approach – short term and long term actions. The first response is through a policy mix, i.e. stimulus fiscal and accommodative monetary policies, which have been instrumental in maintaining macroeconomic stability, in particular in ensuring the soundness of the banking system. 

The second order response involves addressing long term issues through improved competitiveness. In order to build resiliency against the current global economic downturn and to sustain economic growth, Cambodia needs to look at ways to improve its competitiveness in the regional and international arena through diversifying existing growth and stabilising burgeoning sectors. This requires Cambodia to explore new economic frontiers while nurturing existing and emerging sectors such as telecommunications and ICT (Information Communication Technology), light manufacturing, financial and securities market; and potential sectors such as alternative energy sources, oil exploration, mining; and processing technology to sustain productivity and competitiveness.

How do you envisage investment in Cambodia developing over the next 5 years?

Firstly, let me emphasise that the foundation of our economy remains strong, that will help us to overcome the negative impacts of this global financial and economic crisis. Much untapped potential remains and it is our real economy that is the target for investment while the global financial sector suffers.

We have worked hard to secure peace, political stability, security and social order, while maintaining macro-economic stability and international integration. The series of reforms that the government has undertaken is to improve the business climate and good governance. On behalf of the Royal Government of Cambodia, I can assure everyone of our commitment to ensure long term stability and improve the business climate. Cambodia is open equally to all investors, local and international. We welcome investments in all sectors, including banking, insurance, and telecommunications. Investors can own 100 per cent of their business here, in most countries 100 per cent foreign ownership is not allowed. 

Our labour force also provides a competitive advantage in terms of salary and productivity. Cambodia’s low labour costs are very attractive to investors. Although minimum wage rates have increased over the past year, they still average out at only $45-$50 per month. Cambodia has a strong dynamic labour force in comparison to other countries within the region and that helps to encourage more investments.

The global financial crisis tends to impose more risks to all sectors of economy, and therefore investors are more interested in the real economy. The trend of economic growth in Cambodia is still high due to the fact that this country is in the development stage and therefore investors can see many opportunities to fulfil their business goals.

Which sectors offer the most potential to foreign investors?

I would say that any investments have strong potential in a developing country like Cambodia because of the country’s stability, market potential and growth. 

Potential in agriculture is high. The sector contributes 31.8 per cent of GDP. Most of the population are farmers yet there are no large scale investments in this sector. There is still much room for improvement. Our yields are low in comparison to those achieved in neighbouring countries. Increased productivity can only be achieved through investment in physical infrastructure, such as irrigation systems, and by promoting agricultural diversification. 

Cambodia also needs to develop a processing and packaging industry for its agricultural products in order to become more competitive in the region. The agricultural sector in Cambodia today is unexploited and offers tremendous potential, but without investment our cultivated land remains largely unproductive and idle.

Light industry and manufacturing also offer great potential. Our low cost labour force is ready and waiting. As a nation we have already shown what can be achieved, as our experience in developing a highly successful garment industry clearly proves.

Garments are the Kingdom’s largest export and account for around three-quarters of export earnings, but this sector alone cannot guarantee sustainable growth because of increasing competitors in the region. 

The Royal Government needs more investors in light industry and manufacturing, and we also want to see more investment not only in the garment sector but also in textile factories. Our labour costs are still low in comparison to labour costs in the region.

Other potential investment sectors include infrastructure. Investment opportunities in the medium term include the following sectors: telecommunications and ICT, banking and finance, mineral exploration (including oil and gas), road construction and energy supplies. All of which will help to boost the economy, make the country more attractive to tourists, and improve the standard of living of the population.

Could Cambodia be doing more to promote itself internationally?

 

Cambodia is doing more everyday to promote itself internationally in terms of political, economic and trade reform. For instance, the government’s domestic policy strictly respects and adheres to all principles of a liberal multi-party democracy and market economy.

Cambodia’s integration into the region and the world and linking trade to labour standards has created a favourable environment for the development of agriculture, tourism, and industry – especially the garment industry – and has facilitated Cambodian farmers to export their products to the regional and world markets. Also, Cambodia’s membership of the World Trade Organisation (WTO) has accelerated internal reforms, attracted both domestic and foreign investments, and strengthened the foundation for socio-economic development.

The Royal Government will make further strides on the path of trade liberalisation aimed at the free movement of goods and services within the country and between Cambodia and her trading partners; creating access for Cambodian products, without barriers and obstacles, to extensive regional and world markets. This will create opportunity to avail of economies of scales and bring other benefits to the Cambodian economy in terms of an increase in investment, jobs, income and economic growth as a whole. All these are critical to reduce poverty among our people.

The Royal Government will pay particular attention to the further integration of Cambodia into the region and the international community by pursuing membership of Asia-Pacific Economic Cooperation (APEC) forum and participating in the building of the Asean Community. All ministries/agencies are expected to fulfil the duties of Cambodia’s membership of the WTO by adopting laws and regulations and ensure their effective enforcement to meet the requirements of the WTO.

The Royal Government will promote the implementation of new measures including: establishing a National Productivity Centre in order to improve productivity and reduce production costs; establishing a National Standards Institute to ensure that product quality conforms with regional and international standards; establishing national testing laboratories for physics, chemistry, micro-biology and mechanics in order to evaluate quality and set prerequisite criteria for products; strengthening an industrial property rights protection mechanism in order to promote innovation, adoption of new techniques and new technology; imparting training to improve skills; and, strengthening the relevant legal framework.

What affect do you think the introduction of an Anti-Corruption Law will have on foreign investment?

The Royal Government’s main priority in improving good governance is to increase capacity and efficiency of the public sector, including combating corruption. The government clearly understands that an Anti-Corruption Law can improve the perception and confidence of the business environment.

Moreover, an Anti-Corruption Law would help to prevent leakage, favouring efficient producers, promote fairer and equitable distribution of scarce public resources, and minimise the leakage of revenue from government coffers to private hands.

Cambodia’s ‘one-stop service’ or a ‘single window service’ would reduce transaction costs and add measures of predictability to investment decisions, making the country inherently more attractive. 

Our achievements in drafting and adopting many fundamental laws such as the civil code and penal code, and our efforts to strengthen the court and build human resources have indicated noticeable progress in the Royal Government’s effort. 

Having said this, I insist that the law must go through its due process – to be consistent with the organic and other existing laws and to follow the adoption of the Criminal Code – to ensure it will work effectively in curbing corruption as we intended.

How will Cambodia use and benefit from the recently-pledged $951 million of foreign aid?

For 2009, the Royal Government of Cambodia mobilised approximately $ 1 billion in Overseas Development Aid (ODA), which was the highest in the last 10 years. In fact, ODA is instrumental for Cambodia during this difficult time of global economic crisis and downturn. Thus our commitment to make full use of the pledged funds will be important. Therefore, the government recently put in place a mechanism to speed up the process of disbursement and implementation. 

Our priority in using ODA is to build capacity and institutions, invest in infrastructure and pillars of growth especially agriculture and in human development such as health and education. These are important for long term economic growth. 

In the context of the crisis, the increased support from ODA gives us a big relief – a fiscal space to intervene in and stimulate the economy in the areas where it is needed. In related aspect, the crisis has given us a sense of urgency thus prompting the joint efforts of government and development partners to take action. This is a good opportunity for both sides (government and donors) to speed up reforms and make things happen quickly.

Are the Millennium Development Goals achievable for Cambodia by 2015? 

 

It is our commitment to make this happen. Cambodia has made substantial investment in key sectors such as agriculture, rural development, health and education, all of which have a direct impact on achieving the MDG targets. The poverty rate declined from an estimated 45–50 per cent in 1993 to 30 per cent in 2007. This is good progress and I expect we will meet the target by 2015. The maternal mortality rate was 437 per 100,000 deliveries while the child mortality rate declined to 66 per 1000 in 2005. This is a challenge as the indicator remains too high compared to CMDGs. Thus we need to do more in the health sector.

Education is on track, the number of new schools, training centres and universities has increased significantly. Our challenge is to channel more resources into rural education to ensure that more children can go to school. In summary, I believe that we are in good standing to make further strides to realise most CMDGs targets. Nevertheless, I could not rule out the possibility of a failure, given the circumstances beyond our control like the current global and financial crisis which keep on distracting our efforts.

How do you expect Cambodia to look in 20 years time in terms of economic success, infrastructure, and lifestyle? 

In the next 20 years, I expect Cambodia will be one of the world’s best performers in terms of improved income and living standards, better infrastructure and a lifestyle on par with middle income countries.

Cambodia will become a competitive economy in terms of human capital, openness and trade, and in the quality of its institutions and regulations within a broader regional and world context. My efforts to promote growth through improved competitiveness by investing heavily in infrastructure and education as well as social development will help bring the country to that level. 

I envisage the advance in agriculture, growing tourism; expanding light and medium industries, a well-managed mining industry (including oil and gas) and ITC to be the key drivers of our future growth. Cambodia will succeed in growth diversification and trade, resulting in a rapid growth of income and welfare. 

Agricultural productivity will be significantly improved and will play a key role as food and energy issues become more severe globally. Improvements in infrastructure will focus on improved and modernised roads, maritime and air transport links regionally and internationally, large scale irrigation, public health and education systems.

Lifestyle will change rapidly, reflecting across-the-board improvements in human indicators and the speed of regional and world integration.

External Links:

Prime Minister's Office
Video Interview with Hun Sen 

Source: Invest in Cambodia, http://www.investincambodia.com/PM/primeminister.htm

Prime Minister's Message...

Prime Minister's Message...

Cambodia has gone through a rapid transition; starting from scratch after the civil war to the current situation in which the country enjoys peace, political and macro-economic stability and social progress. This favourable environment is a prerequisite for the future growth and prosperity of Cambodia.

Based on this solid foundation, Cambodia has integrated itself into the region and the world and engaged in both bilateral and multilateral cooperation, with special emphasis placed on establishing political, economic, cultural, trade and investment ties.

The Royal Government of Cambodia welcomes public private partnerships in Cambodia; the government pays great attention to the business environment and promoting private sector competitiveness. The Royal Government considers the private sector to be the engine of growth, with its own role that of strategist and manager of the development, to ensure stability, transparency and predictability.

In this spirit, in 1999 the Royal Government initiated a dialogue mechanism – the Government-Private Sector Forum (G-PSF) – whose role it is to provide a forum for consultation with the private sector on new initiatives of the government, and to provide a mechanism to address issues faced by the private sector in its operation.

The Government-Private Sector Forum is held twice a year under my chairmanship and its deliberations are considered akin to an enlarged cabinet meeting. Since its inception, the Forum has been convened 14 times. Through this mechanism, the Royal Government has resolved many business and investment issues and I strongly encourage investors in Cambodia to participate actively in this dialogue mechanism.

Cambodia has opened its economy for Foreign Direct Investment (FDI) in all sectors including banking, insurance and telecommunications. Unlike in other countries, investors in Cambodia are allowed to control 100 per cent of the shareholding, without local participation requirement.

We are strongly committed to pursuing our efforts to improve the investment environment in order to make Cambodia an attractive FDI destination within the region. Indeed, the economic development of the country requires the concerted efforts of the government, the business community and development partners. Along with our efforts to provide an enabling environment by focusing on the streamlining of legal and administrative procedures, the reduction of business transaction costs and the fight against corruption, the Royal Government has recently adopted concrete measures and made further efforts aimed at attracting FDI.

The Royal Government has embarked on multiple reform programmes including public financial management, governance on land management, public administration, and legal and judiciary procedures. Concerning the latter, the Royal Government has achieved encouraging progress, and numerous trade and investment related laws have been adopted and implemented.

We recognise that still more needs to be done and we are fully aware that many challenges are ahead of us, but our successful past experience tells us that Cambodia is moving in the right direction. Lessons drawn from our past shortcomings will help us to overcome the obstacles and challenges in our journey towards a better future.

Cambodia offers many investment opportunities in sectors such as agriculture, agro-industries, infrastructure, labour intensive industries, export oriented industries, oil and gas, mining and tourism.

As an agricultural country, Cambodia welcomes investment in infrastructure, technological transfer and technical assistance in order to improve agricultural productivity. To avoid food shortages in the future, technology will play a crucial role as it leads to the improvement of agriculture productivity.

Cambodia is self-sufficient in rice and exports it surplus, but our nationwide fertile land has not been used to its maximum potential yet. With sufficient investment to improve agriculture productivity, Cambodia can become a key rice supplier for the region and the world.

Despite remarkable progress, more attention also needs to be given to the strengthening of partnerships in energy development and tourism development in order to overcome the challenges of the global financial crisis. Cambodia welcomes investment in the energy sector to secure the pace of economic development both within the country and the region.

Cambodia is busy reconstructing and improving its transportation networks, providing clean water supplies, improving electricity supplies, and developing its nationwide telecommunications network. None of which would be possible without foreign investors and the assistance of our development partners.

To promote the tourism sector in the face of the global financial and economic crisis, I have made recommendations in relation to boosting market research and advertising, improving visa procedures and transportation, strengthening the development of human resources, and improving the environment of key tourist locations. We are also striving to develop tourism by organising more tourism, cultural, sport and religious events such as the Johnnie Walker Cambodian Open - an international golf tournament held annually in Cambodia, Angkor Wat International Half Marathon, and a triathlon. Cambodia is also hosting the Asean Tourism Forum in 2011.

The launch of direct flights from the Philippines to Cambodia in early 2010; increasing the number of Bangkok to Siem Reap flights; a visa exemption agreement between Cambodia and Thailand; the adoption of a single visa policy; the restoration of the Poipet to Siem Reap road (used by many tourists and freight companies travelling from Thailand to Siem Reap); are all initiatives that will bring about a huge increase in the number of tourists visiting Cambodia over the coming years.

With overland border crossings in mind, I would like to appeal to the officials stationed at all border checkpoints to better facilitate the journeys and transportation of tourists. Obviously, past experience indicates that easing transportation by land is very important to attracting more tourists and trade, especially during a period of crisis.

Cambodia welcomes the concept of Asean Connectivity. The completion of physical infrastructure such as road, rail, air and sea linkages within the Asean region which runs through Cambodia, Laos, Vietnam and Myanmar is vital, because the appraisal of this connectivity will bring benefits to all member states of Asean by boosting trade, investment, tourism and regional development. Narrowing the development gap should remain our top priority in order to ensure the complete realisation of Asean integration.

Cambodia has developed from ground zero to a country that enjoys peace and security, and an investor friendly outlook. Prosperity still eludes us, but through the strength and determination of the Cambodian people, combined with the assistance of our development partners and sound leadership, Cambodia has risen from the abyss; and the favourable environment we enjoy today is a prerequisite for the future growth and prosperity of this Kingdom.

Prime Minister Samdech Hun Sen

Source: Invest in Cambodia, http://www.investincambodia.com/default.htm

Neak Oknha Kith Meng Signs the Agreement on Telecom Equipment

March 18, 2010
Neak Oknha Kith Meng Signs the Agreement on Telecom Equipment & Service Supply with Chinese Company

OSAKA has a meeting with Oknha Kith Meng

OSAKA Chamber of Commerce has a Meeting with Neak Oknha Kith Meng to study the situation of Cambodias economy, potential areas, and investment.

Signing Ceremony between The Cambodia Chamber of Commerce and The Industry Chamber of Commerce

Oknha Mong Rithy, vice president of The Cambodia CCC were in the meeting to deliberate with Korea