Ladies and Gentlemen,
It is a great honor and pleasure to address the Annual Meeting of the Ministry of Commerce, and thus participate in the review of the Ministry’s 2002 performance as well as set its objectives and workplan for 2003.
In behalf of the Royal Government of Cambodia and my own self as Prime Minister, I sincerely congratulate the Ministry of Commerce for its commendable performance and successes achieved in 2002. The MoC has exerted its best in implementing the government’s policies and reform agenda – especially that of open and free trade policy. Indeed, this has contributed to the reduction of poverty among the Cambodian people.
In 2002, the Cambodian economy achieved economic growth of 5% despite suffering serious flooding, droughts and the negative impacts of world insecurity and economic stagnation. Exchange rates have been stable while inflation maintained at around 3.3%. The growth of our country’s economy has been driven by the continuing high growth in manufacturing, industry, construction and tourism. Manufacturing, especially of garments has been growing very fast, employing more than 223,000 workers. Those workers received about USD 160 million in wages in 2002.
Given these excellent results, many countries and international financial institutions have praised Cambodia and the RGC for the outstanding performance in social development and economic reforms. The Ministry of Commerce has played an active role in such successful performance.
Yet we have so much more work to do. In order to further promote the development of trade and the economy, I wish to take this opportunity to share with all of you some specific and concrete recommendations for further action:
1. Trade Strategy for Poverty Reduction
Poverty reduction is a continuing task that cannot be completed in a short period. Most poor Cambodians are farmers in the rural areas. Among the 49 least – developed countries, Cambodia is one of three countries with commodity exports in excess of USD 1 Billion since 2000, enabling more than 200,000 workers from rural areas to work in the 200 garments and footwear factories. This achievement of Cambodia has resulted from developed countries opening their markets to Cambodian products. Such advances have been won despite almost three decades of civil war and countrywide peace attained only since the end of 1998. Indeed, Cambodia’s performance has been praised by the international community.
In general, pro-poor trade policy should aim to sustainable promote growth through the promotion of both domestic and international trade. Trade policy that favors the poor focuses on the following key aspects:
I. The promotion of exports using the GSP and MFN status of Cambodia;
II. The acceleration of the integration of Cambodia into the world economy through accession to WTO and promoting cooperation with ASEAN and between ASEAN and its dialogue partners to diversify market access for Cambodia’s products;
III.The promotion of local production through measures that support the development of small corporations or SMEs in agro-processing, fisheries, textiles and tourism, especially in the countryside.
2. Continued Integration into the Regional and World Economy for International Market Access
The Royal Government of Cambodia continues its efforts in integrating Cambodia into regional and world economy.
In preparation for WTO accession, Cambodia has so far conducted three rounds of bilateral and multilateral negotiations with other WTO members. We expect that Cambodia will achieve membership in the WTO during the WTO Ministerial Meeting scheduled in Cancun, Mexico in September 2003. Thus I urge H.E. CHAM PRASITH, the leader of Cambodia’s WTO Negotiating Team to settle all the remaining issues so that Cambodia can definitely be recognized as a WTO member in this 2003.
For regional integration, Cambodia shall continue her cooperation with the other ASEAN members toward the establishment and taking advantage of AFTA. Cambodia shall also support expansion of economic cooperation between ASEAN and its dialogue partners such as China, Japan, the United States and India.
The MOC should further promote other bilateral trade cooperation opportunities especially with the US, the EU, Canada, Japan and the Republic of Korea to continue the expansion of the market for Cambodian exports.
Cambodia has effectively used its GSM and MFN status to promote production, exports, employment and income generation for the Cambodian people. Thus I call on the Ministry of Commerce and other concerned institutions to work even harder to maximize use of these special trade treatments to increase our exports even more than in the past year.
3. Preparation of the Trade Code
The strengthening and improvement of the efficiency of the free market mechanism via the development of the legal framework for trade should be speeded up. An appropriate and transparent legal system is a key factor that encourages investors and businessmen to be confident about doing business in Cambodia.
A sound legal system should ensure the free and fair competition among all producers and businessmen. There are 13 pieces of draft legislation that have been proposed by the MOC. These are being reviewed by the government and the two legislative bodies. When completed within two years, these laws will help ensure that Cambodia will have an adequate system of trade laws and regulations consistent with WTO agreements. The MOC should make full use of all current technical assistance to facilitate integration and speed up work on the above-mentioned bills.
4. Cambodia-Thailand Economic Cooperation
In 2003, MOC, as Chair of the Cambodia – Thailand Joint Committee, should further promote the implementation of key joint projects already agreed, including the establishment of the Export Processing Zones in Koh Kong, Pai Lin and Poi Pet, the establishment of wholesale export malls for exporting and various tourism projects.
5. Triangle Economic Cooperation: Cambodia, Vietnam and Laos
MoC should play a leading role in the analysis and planning of the development of trade in the triangle area between Cambodia, Vietnam and Laos. The outcomes of such analysis and plans will in the future be used to promote the area into sustainable, secure development zones that will greatly help reduce poverty among our people in the area.
6. Quality Control of Products
Products meant for commerce and trade must be controlled for quality and safety. This work has been performed well by the CAMCONTROL of the Ministry of Commerce.
In recent years we have observed a dramatic decline in the circulation of sub-standard and spoilt products in Cambodia. Thus control measures should be applied to all products, importers, transport companies, producers and sellers. Consumer education is crucial to the public’s understanding of the effects of use of poor quality products, especially of food.
Moreover, the MoC should ensure that products such as fertilizers, pesticides and other potentially harmful products bear labels in the Khmer language that provide key information on proper usage. Moreover, actions should be taken to prevent fake trademarks, including prevention, monitoring and implementation of measures on imports, production and circulation to ensure compliance with the Law on Trademarks and Acts of Unfair Competition. Finally, the MoC should work to further build the capacity of national laboratories which certify the quality of products.
7. Administrative Reform and Decentralization Policy
The MOC has set its mission statement as: “Year 2002: the Year of Decentralization and Deregulation”. While the MoC has already achieved significant progress, much more work is required in order that its delivery of public services can quickly catch up with other countries in the region. The MoC and other concerned institutions must study ways to use computerized systems to reduce administrative workloads.
I also urge, once again, all ministries and institutions to completely eliminate the practice of taking bribes or imposing illegal charges since these badly affect the competitiveness of our traders and producers and impede the development of the national economy as a whole. I also call on all private companies to stop paying illegal fees to “bad officials”. Indeed, those who pay bribes as well as take bribes are equally at fault. Furthermore, companies should review their staffs to uncover those involved in corrupt practices and shift the blame to civil servants.
8. Export Promotion for Creation of Jobs for Cambodians
The Ministry of Commerce has contributed considerably to creating jobs for Cambodians. So far more than 220,000 people have found work in the garment sector. Each month, investors pay USD$15 million in wages for garment workers. Now, we need to provide training so that Cambodians can take over the jobs currently held by more than 3,000 foreign experts in Cambodia.
Starting 2003 the EU and Canada will provide Cambodia with preferential treatment, absolutely free of taxes and quotas for Cambodian products entering their markets. This is another opportunity that will foster production, exports and jobs for Cambodia on a sustainable basis.
9. Upgrading of Ports
To further advance trade with countries in the region, I ask the MoC, MPWT and other concerned institutions to conduct a thorough and detailed study on the promotion of ports such as Koh Kong, Sré Ambel, Keo Phus, Kampot and Keb into international ports.
10. Human Resource Development
The MoC has performed in HRD very well. The Ministry has conducted many training courses, seminars and workshops for its officials in topics such as: English and Japanese languages, modern accounting, free market economics, commercial law, computer literacy, product quality education, property and intellectual rights, and ASEAN and WTO affairs.
As I have said many times, the year 2003 is the fifth and last of the second term of the RGC after the 1998 elections. The efforts to rehabilitate and develop our nation, which just achieved full peace a mere four years before, have not been an easy task.
I am encouraged by the Moc’s objectives and tasks for 2003 set by this Annual Meeting. I wish H.E. Cham Prasith the best as Leader of Cambodia’s WTO Negotiating Team, imbued with creativity and responsibility as he has consistently shown.
The Royal Government of Cambodia is confident that the MoC is effectively implementing the government’s policy agenda, transforming those policies into a reality. The RGC is committed to ensuring trade liberalization, free flow of products, strengthening overseas trade relations and the integration of Cambodia into the region and the world. This will definitely bring the benefits for our people freeing them from the poverty. In closing, I would like to wish all of you all the five gems of Buddhist blessings.