Excellencies, Ladies and Gentlemen!
Today, I am greatly honored and delighted to participate in this auspicious business luncheon. I would like to take this opportunity to deeply and sincerely thank the Federation of Indian Chambers of Commerce and Industry of India (FICCI), the Association of Chambers of Commerce (ASSOCHAM) and the Confederation of Indian Industry (CII) for organizing this very important event and thank all the Indian investors for their interest in and attention vis-à-vis Cambodia.
Since Cambodia is back on the path of strong and sustained economic growth, testified by considerable and encouraging achievements during the last few years, I believe that this is the best time for the business community and all investors to assess the potentiality and opportunity as well as the future vision of Cambodia.
Taking the opportunity of today’s gathering, I would like to inform you all of some of the key messages relating to the current socio-economic situations in Cambodia, as well as our vision and important plans to enhance and improve Cambodia’s attractiveness to foreign investors.
First of all, let me start by informing you all about some of the important achievements resulting from the efforts of the Royal Government during the last few years.
During the last decade, Cambodia has overcome many obstacles and challenges. With the sacrifices and determination as well as the supports from all development partners, Cambodia has overcome the difficulties and transformed itself into a peaceful country with improved social order, stability, cooperation and development. They have taken deep roots in the Cambodia’s socio-economic foundation and contributed to rapid expansion of the national economy. For instance, after achieving full peace in 1999, even though the regional and world’s economy have faced with major challenges, coupled with some of the negative consequences of natural disasters in the country, Cambodia’s economy gained momentum and dynamism by growing on average 9.4% per annum during 2000-2006. Especially, economic growth peaked at 13.5% in 2005 and economic growth was 10.8% in 2006. The average per capita income almost doubled from 288 US Dollars in 2000 to 513 US Dollars in 2006. Inflation has been kept low at an average of under 3% between 2000-2006. Exchange rate has been broadly stable. The country’s international reserves have increased threefold from about 500 million US Dollars in 2000 to more than 1,5 billion US Dollars as of today.
For 2007, it is expected that GDP growth will be at around 9,5%. Inflation rate will be maintained at a low level. Exchange rate will remain stable. Foreign reserves will continue to increase.
At the same time, the promising future from the commercialization of oil, gas and other mineral resources has opened up new economic opportunities and hope for Cambodia to become a new development zone in the region. These factors suggested the possibility of high and sustainable economic growth in the medium and long terms, as well as economic diversification and faster poverty alleviation.
Building upon the peace, stability and development which have become stronger and stronger days by days, the Royal Government of Cambodia has an ambitious vision to utilize this new opportunity for the next one to two decades to transform Cambodia into a fast-growing regional economy based on agro-business, manufacturing and services especially, in the tourism sector. We expect to realize this vision by mobilizing the resources from all sources, either domestically or from abroad to invest in human resource development, institutions and both hardware and soft-ware infrastructures, including roads, bridges, seaports, airports, railroads, power, transmission lines, clean water supply, irrigation, development and the transfer of knowledge, know-how and technology.
Within this context, encouraging the private sector’s participation is the top and most important priority for the Royal Government. Indeed, recognizing the huge forces of the Indian economy and with the successful development experiences learnt from neighboring countries in the region where foreign direct investments have been playing an important and critical role, the Royal Government of Cambodia is strongly determined to attract as much as possible foreign direct investments including Indian FDIs to Cambodia. This is the necessary requirement for economic take-off and transformation in Cambodia, where currently full peace, stability, safety, social order and other fundamental conditions for attaining sustainable development are in place.
Therefore, my second message is to invite all of you, Indian businessmen and investors, to come and visit Cambodia in order to carry out feasibility study on your investment plans. Indeed, for those of you who might not or know a little bit about Cambodia through newspapers or through various media coverage, you may wonder what kinds of potentials does Cambodia have to attract your investment, what kinds of policy and measures does the Royal Government of Cambodia have put in place to promote and facilitate private investment activities in Cambodia. To these questions, please allow me to try and answer some of them as follows:
Firstly, as I have already mentioned earlier, Cambodia has become a country with full peace, security and stability in all four corners, a country that has enjoyed stable macroeconomic developments, with firm vision for medium and long term economic growth.
Secondly, the Royal Government of Cambodia is supportive of the private sector. The Royal Government’s philosophy is to consider the private sector as an important engine to generate economic growth. That is why we have made considerable efforts to strengthen the judicial system, develop our legal framework and institutions in order to provide a favorable environment for the private sector and protect their investments and business activities in Cambodia. Particularly, we have placed our efforts on streamlining process and procedures for private investment and reducing costs of doing business through combating corruption and mobilizing resources from various sources to enhance the development of all types of socio-economic infrastructures, especially, physical infrastructures including transportation, power plants and power transmission lines, clean water, telecommunications and information technology networks.
Thirdly, despite the fact that we have currently a population of about 14 million, Cambodia is only a small market compared to the economies of some countries in the region. However, I would like to ask all investors to carefully look at this point by placing Cambodia in the whole regional and global context to make a better and appropriate comparison. By clearly understanding the market demand for the development of the country, the Royal Government has actively promoted the policy of integrating Cambodia into the regional and world market. As a result, we have achieved large economies of scale. Cambodia’s membership in the World Trade Organization and the ASEAN community as well as trade agreements that have been agreed and signed or still in the process of negotiation both under the bilateral and ASEAN framework with India, China, Japan, Korea, Australia, New Zealand, European Union and the United States of America as well as the development initiatives at regional and sub-regional levels, have provided investors with the opportunity to gain access to the markets of almost all countries around the world.
Fourthly, Cambodia has comparative advantages and some important potentials in the agriculture and agro-industry, labor-intensive industries, processing, tourism, mining, and at some sections of the manufacturing and service sectors which are linked to the favorable condition of land, weather, natural resources; cheap, honest and disciplined labor forces that are willing to know and learn; historical heritages and beautiful sceneries of the sea, mountains and forests. These potentials are available for sustainable development and investments.
Last but not least, because of the special priority that the Royal Government of Cambodia has given to attract foreign investors, we have adopted the following policies:
- to promote Private Participation in the Provision of Infrastructures (BoT, Boo…).
- to provide National Treatment which means that foreign and domestic investors enjoy the same rights. Hence, Indian investors can invest in all sectors of the Cambodian economy including in the industrial sector, services sector as well as natural resources sector. There is however one restriction: land ownership, although the ownership of land is reserved to natural and legal Cambodian persons, natural and legal foreign persons have the possibility to use land through lease contracts for a period of up to 99 years.
- to not require local participation or partnership : foreign investors can do business with or without Cambodian partners according to their wishes. In case of local participation, the level of equity will be up to the foreign investor.
- to allow free movement of capital and foreign exchange, without any restriction.
The above mentioned policies clearly reflect the openness of the Cambodian economy and of the Cambodian people towards the participation of foreign investors in the socio-economic development of the country.
As you already know, India and Indian people are precious and exceptional friends of Cambodia and her people. The Cambodia-India relationship dated back to the 3rd century when Indian sailors and traders arrived and settled down in Cambodia. They then integrated into the indigenous Khmer community. Historical legacy stemmed from India can be found in various fields: religion, culture, literature and architecture. This legacy is a testimony of the old and memorable bounds between the two countries and its people. At the present time, as for the rehabilitation and development of Cambodia, India has provided Cambodia political and moral support as well as valuable technical and financial assistance.
In the ASEAN context, I am grateful to India for its assistance and cooperation to help narrowing the development gap through initiatives such as the Special Course for Diplomats from ASEAN Countries as well as for the establishment of Entrepreneur Development Center and Center for English Language Training in Cambodia, Laos, Myanmar and Vietnam. Indeed, I am very much encouraged by the spirit of cooperation expressed by PM Manmohan Singh during the 6th ASEAN-India Summit held recently on 21st November 2007 in Singapore. Thus, in addition to the above mentioned initiatives, I am hopeful that India will consider positively our request to provide assistance in the field of IT where India is well-known for its expertise. Indeed, Cambodian people will always remember these kind supports by recording this generosity in the golden page of the national history and in the heart of every Cambodian people.
Hence, I would like to invite Indian businessmen and investors to join me by undertaking concrete investment projects to build a bright future for Cambodia. On behalf of the Royal Government of Cambodia, I would like to guarantee every foreign investor with all kinds of favorable and conducive environments for investment, particularly peace, security, safety, political stability, macroeconomic stability as well as legal and institutional framework endowed with efficiency, transparency, accountability and predictability. I would like to sincerely thank you all for your kind attention.