Rising nation woos investors

In recent years, Cambodia has undergone sweeping changes, not only in the field of politics and national security but also in terms of its economic and social landscape.

This stable, safe and secure environment is an essential precondition for Cambodia to realize its economic potential and social goals and build a peaceful and prosperous nation.

Cambodia's recent economic performance has been remarkable, a positive reflection on the sound and prudent macroeconomic policies of recent years.

From 2004 to 2006, Cambodia realized average annual growth of 11.5 percent.

Meanwhile, real gross domestic product (GDP) growth touched an all time record of 13.3 percent in 2005, and was maintained at 10.8 percent in 2006.

Since the country regained full peace in 1999, economic growth has averaged 9.8 percent and inflation 2.2 percent per annum. Per capital income went up 6.7 percent on average from $248 in 1994 to $513 in 2006. International reserves have increased 11-fold from $100 million in 1994 to $1,097 million in 2006, and total exports have increased 8-fold from $463 million in 1994 to $3,692 million in 2006.

Governmental efforts

The Royal Government is convinced that to ensure sustained high economic growth in the long run, public investments should be supplemented by substantial private investments from both the domestic and foreign private sectors.

To this end, the government places a great deal of emphasis on improving governance as a necessary condition for promoting private investment.

In this sense, our government accords immediate priority to promoting private sector development in the following areas: (i) encouraging the development of small and medium-sized enterprises (SMEs); (ii) suppressing smuggling; (iii) streamlining business registration procedures and start-up processes for companies; (iv) facilitating export-import activities by simplifying licensing and business formalities; (v) establishing a national standard body and a national laboratory for quality certification; and (vi) promoting vocational/skills training.

Meanwhile, the government has pressed forward with its trade facilitation agenda, aimed at reducing the costs of doing business, which include the following measures:

Streamlining the inspection process by rationalizing roles and responsibilities of government agencies involved in the regulation of export and import activities.

Establishing a single window for international trade operations.

Implementing customs improvement programs by introducing automation and a single administrative document for all import and export operations.

Developing and strengthening the financial sector is seen as another important structural reform for the promotion of the private sector in Cambodia.

Indeed, these efforts are important for sustainable growth and macroeconomic sustainability in the long term.

We have achieved fruitful results with the implementation of financial sector reform.

While achieving success in the first stage of our banking reform, we have also begun earnest reform of our insurance sector.

The next item on our agenda will be the introduction of a capital market, in order to diversify the sources of investment financing.

We recognize that there is still a long way to go to build up an effective and efficient financial sector in Cambodia.

The Royal Government of Cambodia has considered the development of Special Economic Zones (SEZs) as a tool to attract further investments.

In December 2005, the government issued the Sub-decree on the Establishment and Management of SEZs, which aims to provide investors with adequate infrastructure and support facilities in these special zones.

These zones will enable us to diversify the Cambodian export structure, which is presently heavily oriented towards garments.

Investment opportunities

Overall, the government has accorded priority to the development of the following six sectors:

Agriculture, in which Cambodia has considerable potential, given her favorable land and climatic conditions.

Physical infrastructure, especially transportation and telecommunications.

Water supply and electrical power.

Human resource development.

Export-oriented and labor-intensive industries.

Tourism, in which Cambodia also has great potential, thanks to its historical and cultural heritage, and abundant natural scenic sites, including forests, lakes and beaches.

Meanwhile, oil and gas, and other mineral resources like bauxite and iron ore, are expected to open up new economic opportunities and will become the seventh priority sector in the quest to move Cambodia to a new and higher development plane.

We are committed to using these resources responsibly for social and economic development.

I invite you to explore investment opportunities in Cambodia in the above sectors.

Relations with China

This year, Cambodia and China are celebrating 50 years of unbroken diplomatic relations.

We are determined to build on those relations, not only in the diplomatic realm but also in the key area of economic and commercial cooperation.

China is already Cambodia's leading investor and during a bilateral meeting at the 13th ASEAN Summit in Singapore, Premier Wen Jiabao pledged to increase cooperation with Cambodia in such sectors as energy, roads and bridge construction.

Recognizing the special ties between Cambodia and China, and eager to strengthen relations at all levels, we in Cambodia look forward to hosting a festive celebration to mark the 50th anniversary of relations between the two close friends.

(China Daily 04/10/2008 page25)