Ladies and Gentlemen,
Today, it is my great pleasure to join you all in the launching of the first Cambodia Economic Forum (CEF) which is organized by the Supreme National Economic Council with initial start up support from UNDP in Cambodia.
As you all may aware, the Supreme National Economic Council (SNEC) is an important think-tank of the Prime Minister that initiated by myself to mobilize national knowledge and capacity in Cambodia to help the Royal Government, particularly the Prime Minister, in preparing and enforcing the implementation of socio-economic policies for development and poverty reduction. Taking this opportunity, on behalf of the Royal Government of Cambodia and my own behalf, I would like to thank the Asian Development Bank for the support of my initiative since the early stage, and has provided specific assistance in strengthening the capacity of this institution. This cooperation has produced good results, reflecting key contributions by SNEC in preparing and promoting the implementation of the RGC’s socio-economic policies, as well as the initiative in organizing this economic forum today.
I highly appreciate this initiative bringing together national and international policy makers and experts as well as the private sector for dialogue on critical economic issues facing the country. I feel confident that this government-led Forum can provide a most valuable periodic venue for assessing important policy research findings, and generating innovative ideas and practical solutions for advancing Cambodia’s development and further improving the well-being of the Cambodian people.
On behalf of the Royal Government of Cambodia, I would like to thank UNDP, especially H.E. Douglas Gardner, for supporting the launch of the CEF process through UNDP’s Insights for Action Initiative. I still recall well my earlier meeting with Dr. Hafiz Pasha, UN Assistant Secretary General and UNDP’s Regional Director for Asia and the Pacific. We agreed that innovative ideas are needed to help Cambodia meet some important emerging challenges and further develop in a prosperous and equitable way. I even suggested to him that “We need UNDP’s ideas, not your money”.
Moreover, at the United Nations Millennium Summit in New York this past September, I reaffirmed the strong commitment of the Royal Government of Cambodia in reaching the Cambodian Millennium Development Goals by 2015, a set of common goals shared by all of us in this room.
The Royal Government of Cambodia attaches great importance to the ideas and proposals that will emerge from this Forum. It is my hope that the SWOT framework and subsequent discussion will help generate valuable ideas for building upon the economy’s strengths, and practical solutions for redressing the weaknesses. The Forum is organized in the right time since we are seeking the valuable advice of national and international experts on how best to capitalize on the emerging opportunities while minimizing the threats.
Realizing peace and stability in Cambodia is the most important achievement of the Royal Government of Cambodia in recent years. Without stability, there can be no development and progress. With peace, stability and sustained economic growth in consecutive years, Cambodia has accumulated its confidence and is ready for its quest toward a bright future. The people of Cambodia can now foresee optimistic and hopeful future. All options that we have adopted and the development milestones that we have gone through reflect the seized opportunities and positive contributions by us for the development in decades to come. Presently, it is time to choose options and take difficult steps decisively and cautiously with self-confidence and determination.
According to the recent survey, the poverty level has remarkably declined and key social indicators have improved comparing to the year 1993, thanks to a number of economic reforms in recent years. Nevertheless, the survey reveals that some areas still have high level of poverty that requires special attention and targeting in order to attain poverty reduction, reaching Cambodia Millennium Development Goals (CMDGs). Now, it is time to utilize our scare resources objectively and effectively to benefit the poor and vulnerable people and help them to participate in global development.
Nevertheless, the country still faces several structural challenges and constraints. Garment exports, tourism and construction continue to drive growth, but greater economic diversification will be needed to sustain future growth. The rural sector offers a potential source of much greater growth, especially in agriculture, though it is still highly vulnerable to weather and low productivity. The Royal Government of Cambodia hopes to make further progress in these areas via the Rectangular Strategyand the new National Strategic Development Plan (NSDP). I strongly hope that this Forum will significantly contribute to addressing these important issues.
During your deliberations on the Strengths, Weaknesses, Opportunities and Threats facing the Cambodian economy, I would like to suggest a number of critical issues and pose some important practical questions for your consideration in this Forum.
1. In the area of Strengths, Cambodia would appear to have a potentially major comparative advantage in a number of agricultural products. I would be grateful for innovative ideas on how we can quickly overcome some of the sector’s weaknesses, and build upon the strengths, so as to substantially increase agricultural exports and thereby improve farm family incomes. For example, what is the most effective way to improve family-based agricultural productivity?
Again in the area of strengths, I would welcome any innovative ideas for further developing Cambodia’s rich tourism potential, especially in job creating areas.
2. In the area of weaknesses, I would be grateful for your practical ideas on how we might substantially improve the competitiveness of the Cambodian economy and further develop and diversify the job creating export sector, especially in manufactured exports.
In a related area, how can we better capitalize on the rapidly growing export markets in the region, particularly in China, including through the “Early Harvest” program within ASEAN?
Similarly, how can we better take advantage of our membership in WTO?
3. In the area of Opportunities, how can we quickly improve the enabling environment for domestic job-creating businesses, despite our still weak and developing institutional capacities, especially in rural areas where most Cambodian people still live?
Again in the area of Opportunities, how can we quickly attract more quality Foreign Direct Investment that is job creating, but also transfers valuable knowledge and skills so that Cambodia can graduate to higher value added global markets?
4. In the area of threats, what are the kinds of economic incentives to strengthen good governance? Given the complex history and evolution of the land situation in Cambodia over recent decades, and the weak institutional capacity at the sub-national level in rural areas, how can innovative economic incentives best be used to improve the efficiency and equity of land use?
5. Oil discovery is the main focus of the report for today forum. I fully agree with a conclusion that future oil and gas in Cambodia can be either opportunity or threat. Indeed, oil and gas will be a new revenue stream that is an opportunity of developing Cambodia economy. This is positive aspect. However, in light of the negative destabilizing experiences of other low income countries following the discovery of oil, what are some of the policy and institutional safeguards needed to ensure that Cambodia enjoys an “oil blessing” and is not plagued by an “oil curse” in the coming years?
In light of developing country experiences elsewhere, and given the structure of the Cambodian economy, what are the best types of petroleum taxes to ensure economic efficiency and social equity? On the other hand, we have to ensure that new revenue stream is wisely invested to enhance long-term economic growth and social equity, to progress towards the achievement of the CMDGs and to build upon achievement that have been for about a century at large.
Therefore, I am waiting for proceeding of the forum on the sequencing of the implementation policies as well as measurement on institutional development to ensure that discovery of oil in Cambodia is a “blessing” not a “cursing”.
Clearly this Forum has an extremely important role to play. I could offer more critical issues for your consideration, but this is already an ambitious set of issues and practical questions for your deliberations.
As already suggested by earlier speakers, even one innovative idea can have a major impact on the well being of the Cambodian people. The Forum will have the most critical role to play in helping further advance the development of Cambodia, and the well-being of the Cambodian people.
In closing, allow me to again thank UNDP for supporting the launching of the Cambodia Economic Forum, which aims to translate our knowledge and insights into actions.
In future, I hope that other development partners will also join in and support the Supreme National Economic Council in the further development of this important Forum. In addition, I would like to thank all national and international institutions, donor countries and development partners that support the development process in Cambodia. I very much look forward to receiving the proceedings of this Forum, and the various ideas, suggestions and contributions that each of you may offer.
Finally, I wish you all the five gems of Buddhist blessing and wish all of you a rich and fruitful dialogue. I now declare the opening of the First Cambodia Economic Forum.