Excellency Prime Minister Wen Jiabao,
Excellencies Leaders of ASEAN,
Excellencies, Ladies and Gentlemen,
It is an honor for me to participate in the “Third China-ASEAN Business and Investment Summit” in order to commemorate the 15th Anniversary of ASEAN-China Dialogue Relations, which is called the “Year of Friendship and Cooperation between ASEAN and China”.
On behalf of the Royal Government of Cambodia, I would like to express my profound thanks to the Government of China for hosting such an important event, which plays a crucial role in strengthening links between governments and the business sector, as well as promoting business cooperation and economic growth in our region.
Indeed, the relationships between ASEAN and China have progressed significantly during the last 15 years. Substantial progresses have been made in almost every fields of our cooperation. The ASEAN-China trade value has increased rapidly from 78 billion dollars in 2003 to 100 billion dollars in 2004 and 130 billion dollars in 2005. In 2005, ASEAN investments in China increased to around US$3.1 billion. At the same time, we noted that China has become a major investor in many less developed ASEAN countries such as Cambodia.
Within the framework of our cooperation, the People’s Republic of China has been playing a very constructive and crucial role in the development of the region, thus in so many ways facilitating and expediting our strategic partnership for prosperity and development. China and ASEAN are just only 3 years away from implementing the Free Trade Area, which will become the biggest FTA in the world with the population of almost two billions. This Free Trade Area will be a major catalyst in expanding and deepening business linkages and people-to-people exchanges between ASEAN and China.
In recent years, Cambodia has gone through a sweeping change not only in political and security areas, but also in economic and social landscape. This stable, safe and secure environment is an essential precondition for Cambodia to realize its potential economic and social achievements and build a peaceful and prosperous nation.
Cambodia’s recent economic performance has been remarkable. In 2005, reflecting sound and prudent macroeconomic policies during the last several years, real GDP growth reached an all time record of 13.5 percent. As a result of the well-managed interplay of demand and supply, inflation was contained to below 6 percent, despite the negative impact of higher oil prices in the world markets.
Cambodia’s economic outlook for 2006 and in the medium term remains favorable. The economic growth will be maintained at 7 to 8 percent per annum, while the inflation will be kept under 5 percent.
Indeed, the continued political stability, proactive private sector initiatives, steady progress in relentlessly implementing reforms by the Royal Government of Cambodia, continued support from development community partners and sustained foreign direct investment, underpin this forecast.
The 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 domestic and foreign private sectors. To this end, the Royal Government puts a great deal of emphasis on improving governance as necessary conditions for promoting private investment. In this sense, our government has given immediate priorities to promote private sector development in the following areas: (i) encouraging the development of 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.
At the same time, the Government has pressed forward with the trade facilitation agenda, aimed at reducing the costs of doing business, which include the following measures:
Firstly – streamlining the inspection process by rationalizing roles and responsibility of government agencies involved in the regulation of export and import activities;
Secondly – establishing a single window for international trade operations; and
Thirdly – implementing customs improvement programs by introducing automation and a single administrative document for all import and export operations.
Developing and strengthening financial sector is another important structural reform in promoting the private sector in Cambodia. Indeed, these efforts are important for the sustainable growth and macroeconomic sustainability in Cambodia in the long term. We have achieved fruitful results in the implementation of the financial sector reform. While achieving success in the first stage of our banking reform, we have started with earnest in-depth reform of our insurance sector. The next item on our agenda will be the introduction of 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 Special Economic Zones (SEZs) as a priority in order to attract investments. In December 2005, the Government issued the Sub-decree on the Establishment and Management of Special Economic Zone (SEZ), which aims to provide investors with adequate infrastructure and supportive facilities in these special zones. These zones will enable us to diversify the Cambodian export structure, which is presently heavily oriented towards garment products.
Overall, the RGC has accorded priorities to the development of the following six sectors:
- Agriculture, in which Cambodia has considerable potentials, given her endowment in land and climatic conditions;
- Physical infrastructure, especially transportation and telecommunications;
- Water supply and electrical power;
- Human resource development;
- Export-oriented and labor-intensive industry; and
- Tourism, in which Cambodia also has great potentials, notably due to the presence of historical and cultural heritages, traditional and natural sites, including forests, lakes, sea and attractive scenery.
At the same time, oil and gas as well as other mineral resources such as bauxite and iron ores will open up new economic opportunities and it will become the 7th priority sector to move Cambodia to a new and higher plateau of development. We are committed to use these resources responsibly for social and economic development.
I invite you, Excellencies, Ladies and Gentlemen, to explore investment opportunities in Cambodia in the above sectors.Finally, once again I would like to wish the China-ASEAN Business and Investment Summit a great success.