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Prime Minister Hun Sen continued....
... determination as well as the support 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 major challenges, coupled with some
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. 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. The exchange rate has been broadly stable. While 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 rates will remain stable. And
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 neighbouring 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 investment 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 businessmen and investors, to come
and visit Cambodia in order to carry out feasibility studies on your investment
plans. Indeed, for those of you who might know a little bit about Cambodia
through newspapers or through various media coverage, you may wonder what kind
of potential does Cambodia have to attract your investment, what kind of
policies and measures has the Royal Government of Cambodia 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 development, 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 effort to strengthen the judicial system, develop our legal
framework and institutions in order to provide a favourable 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 potential in
the agriculture and agro-industry, labour-intensive industries, processing,
tourism, mining, and at some sections of the manufacturing and service sectors
which are linked to the favourable condition of land, weather, natural
resources; cheap, honest and disciplined labour 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, 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.
Hence, I would like to invite 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 a favourable and conducive environment for investment,
particularly peace, security, safety, political stability, macroeconomic
stability as well as legal and institutional framework endowed with efficiency,
transparency, accountability and predictability.
Address at the Business Luncheon Organized by FICCI, ASSOCHAM and CII
New Delhi, 8 December 2007
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