Ladies and Gentlemen,
At the outset, I would like to express my sincere thanks to the World Economic Forum and the Government of Singapore for inviting me to address this august summit. I am honored to be here today to share with all distinguished delegates some of my thoughts on regional integration and Cambodia’s efforts towards this goal at present and its beyond.
The new technology revolution and globalization have brought about profound changes to the political, economic, cultural and social fabrics of East Asia. It presents to us both opportunities and challenges.
The Asian financial crisis has brought East Asian countries together and provides a strong impetus and thrust for ASEAN and East Asia towards a regionalism with an enhanced institutional identity. In this regard, I am convinced that an assessment on dynamism of ASEAN and East Asia should be made based on these developments.
Within the ASEAN framework, we have taken serious strides to deepen economic integration, leading to the formation of an ASEAN Economic Community by the year 2020 as the ASEAN Leaders have discussed in Phnom Penh in 2002. The Declaration of ASEAN Concord II (Bali Concord II) signed at the recent 9th ASEAN Summit in Bali, provides a roadmap for achieving these noble objectives. I believe that in the near future the nations of ASEAN will be living together in a community where goods, services and people move more freely, where personal security is protected.
Cambodia fully supports the recommendations of the High-level Taskforce on ASEAN Economic Community, especially the degree of flexibility that enable those member states that are ready to proceed first can go ahead towards the ASEAN Economic Community. However, to ensure that such flexibility will not lead to widening development gap within ASEAN, which is the key impediment to our move towards a full economic integration in the region, ASEAN has to give priority, particularly to resource mobilization from both inside and outside the region to expedite the implementation of the Initiative for ASEAN Integration (IAI), including the expansion of the coverage of “the ASEAN Integration System of Preferences-AISP”. This will allow less developed member countries to fully and effectively participate in an ASEAN Economic Community and can benefit properly from ASEAN integration.
ASEAN Countries have agreed that intensifying sub-regional cooperation is a part of the Initiative for ASEAN Integration (IAI). Based on this philosophy, last year in Phnom Penh we have taken a step further to intensify GMS development which, we all expect, will greatly contribute to the diminution of the gaps among the ASEAN economies. In this regard, Cambodia is also keen to strengthen economic cooperation with neighboring countries by promoting a triangle development area between Cambodia, Lao PDR and Vietnam, as well as between Cambodia, Lao PDR and Thailand, called “emerald development triangle”, and by implementing the initiative on the Economic Cooperation Strategy (ECS) between Cambodia, Lao PDR, Myanmar and Thailand (CLMT). We are convinced that these initiatives will provide us with unique opportunity to increase trade and investment, enhance competitiveness and generate more employment and improved income and quality of life in the sub-region, in which most are the less developed new members of ASEAN.
Within the ASEAN+3 framework, we have introduced a number of initiatives and concrete projects, aimed at accelerating regional integration and building an identity of East Asia such as: the Initiative for the Development in East Asia (IDEA)initiated by Japan; the East Asia Vision Group (EAVG) and East Asia Study Group (EASG) proposed by South Korea; Framework Agreement on ASEAN -China Comprehensive Economic Cooperation; and similar arrangements between ASEAN and Japan; as well as the ongoing discussion between ASEAN and the Republic of Korea on trade liberalization, investment, and economic cooperation including the establishment of ASEAN-ROK free trade area.
The final report of the EASG presented to ASEAN Leaders in Phnom Penh last November, provides clear direction for the ASEAN+3 cooperation through the 17 short term measures and 9 medium-to long term measures. ASEAN warmly welcomed prompt actions taken by our +3 partners in implementing the short-term recommendations proposed by the EASG namely, the implementation of the East Asia Forum (EAF) by Korea, the establishment of East Asia Think-Tanks Network by China, and the ASEAN+3 Study Group for the Facilitation and Promotion of the Exchange of People and Human Resources Development by Japan. Speedy implementation of these initiatives is important in order to promote and deepen cooperation in East Asia.
Thus, in general, I am of the view that the most critical challenge for ASEAN and East Asia now is to ensure that these initiatives work as a “synergy” and complement to the establishment of a strong regional community in the long run.
In this spirit, we have agreed that the building block approach is the best way forward for the evolution of ASEAN+3. Therefore, ASEAN and the +3 countries decided to give a special attention to the acceleration of sub-regional FTAs that so far can help to maintain East Asian development in a good shape. To point out, ASEAN-China FTA negotiation is well in progress, and ASEAN-Japan Closer Economic Partnership (CEP), and ASEAN-ROK CEP is about to start its consultations/negotiations in the near future. I am of the view that sub-regional FTAs would likely work best as a building block, because promoting sub-regional FTAs between ASEAN and the Plus Three countries can ensure that no one members will be left behind and ASEAN could also maintain its driving seat in the ASEAN+3 process.
Cambodia is very proud of being able to specifically and appropriately contribute to regional efforts toward firm security and peace since the first days of its membership in ASEAN. Cambodia’s strict adherence to the principles of democracy, respect for and protection of human rights, ensuring peace and genuine national reconciliation, the elimination of the Khmer Rouge political and military structure have been significant and meaningful contribution for ASEAN and East Asia.
The Royal Government of Cambodia (RGC) has doubled efforts to meet the requirements of ASEAN membership- from changing laws to bringing finance, investment, commerce and trade sectors into alignment with ASEAN standards. Indeed, Cambodia’s agenda does not end up only with the membership in ASEAN and the implementation of other related forms of cooperation such as ASEAN+3 and ASEAN+1, but Cambodia has a greater ambition. Our agenda is to integrate our national economy into the world trade system at large. To achieve this goal, Cambodia has prepared itself through utmost effort during the last several years to achieve the accession into the WTO at its Ministerial Meeting on 12 September 2003 in Cancun, Mexico.
Cambodia has been commended for being able to meet the stringent and voluminous conditions for WTO membership. This highlights the fact that Cambodia has been on the correct track by committing herself to democracy, respect of human rights and transparency, and modernization of national economy, and in particular, liberalization of trade and investment in order to enable the people of this poor country to benefit from globalization.
However, the government is conscious that becoming an effective member of the WTO may even be more difficult than the process of attaining membership. To this end, Cambodia must exert its utmost efforts to face the numerous challenges, difficulties and obstacles by forcefully implementing and deepening the reform programs in all sectors, especially by strengthening production base, diversifying export, revamping legal and judicial system, building institutional capacity and developing human resource, a process which takes time and requires strong commitment, determination and political will.
During the last five years, the Royal Government of Cambodia (RGC) has been actively implementing reform agenda in all sectors. These efforts generated a powerful momentum, reflected by Cambodia’s robust economic performance. Over the period of 1999-2003, the economy grew at an annual average rate of 6.7 percent, while the exchange rate was stable. Inflation was kept very low under 3 percent. The level of its international reserves has almost doubled.
Nevertheless, the Royal Government of Cambodia admits that reform is not built in a day nor completed in one giant step. It must be a steadfast and continuous process. In The Road to Serfdom (1944), the Nobel laureate F.A. Hayek said that “If we are to build a better world, we must have the courage to make a new start.” In this regard, I am proud that the Cambodian people and government have a clear understanding that Cambodia has no better way, but to continue the reforms that we have started in all our earnest. I thank you for your attention.