Top Story of the Week: IMF Raises Growth Forecast to 6.5 Percent
- For more information on the Council's Cambodia program, please contact Carr Slayton at email@example.com or 202 416-6712 and Wanlapa "Fon" Komkai at firstname.lastname@example.org or 202 416-6706.
Defense & Security
Defense Minister Tea Banh said Thursday that Cambodia and Thailand would comply with the International Court of Justice and withdraw forces from around Preah Vihear Temple.
"We have not yet complied 100 percent with the ICJ demands but we have reached a good stage. We also need some time," he told reporters. "We have agreed to the ICJ demands but are waiting for a good situation so we can do it perfectly."
New war footing on Thai-Cambodian border, Asia Times, Sept. 22
Since early January, Royal Thai Army (RTA) planners have prepared new plans to defend Thailand against potential attacks from Cambodia, a move that threatens to rekindle tensions along the two countries' contested border. The plan, drawn up by the RTA's 2nd Army Region and formally approved in April, represents a significant departure from previous Thai strategic footings vis-a-vis Cambodia and involves the immediate commitment of large regular army combat units along the border.
The new plan is highly unusual for the RTA and could be perceived as provocative given the lack of any immediate and realistic military threat from Cambodia. It would also seem to contradict the policy of the Yingluck Shinawatra administration, which has worked to ease tensions with Cambodia over a disputed land claim at the Preah Vihear temple that spiked during the previous Abhisit Vejjajiva-led government.
The Asian Development Bank says it has reduced its growth forecasts to reflect depressed demand for Cambodian products arising from the slump in global markets. "Falling global demand, especially in Europe and the US, means that the industry sector will grow at a slower pace this year," said Peter Brimble, senior country economist for Cambodia. "However, buoyancy in the services sector, particularly tourism, offsets to some extent the slowdown in garment exports," he said.
The International Monetary Fund (IMF) yesterday raised its growth forecast of the Cambodian economy to 6.5 percent, a rise of 0.3 percent compared to its last estimation in April.
Speaking during a meeting at the Council of Ministers in Phnom Penh, the IMF’s chief of mission to Cambodia, Olaf Unteroberdoerster, told Deputy Prime Minister Sok An that the country had performed better than expected in the tourism, agriculture and construction sectors.
UNDER dazzling white strip-lights a production line of young Cambodians stitch, iron and fold their way to the day’s target of 820 two-piece children’s pyjamas. These garments are destined for the shelves of Los Angeles, shop price $9.97. The workers, mostly women, start at 7.30am and could knock off at 4pm, but almost all stay for two hours’ overtime. There are about 1,300 workers at the Gawon Apparel factory on the outskirts of the Cambodian capital and they can produce up to 20,000 items of clothing a day—or 7.3m a year.
The factory is South Korean-owned and is one of about 375 across the country with an export permit. Garment-making is the country’s most important and dynamic industry. Together with 45 footwear companies and hundreds of subcontractors, the industry employs almost 500,000 workers, out of a population of barely 14m people. The shirts, blouses and trainers churned out by these factories account for 80% of the country’s exports and earn $4 billion of foreign exchange in a country with a GDP of just $13 billion. The success of the garment industry is an encouraging sign of new-found economic vitality in a country that emerged only 20 years ago from decades of Khmer Rouge terror, foreign invasion and civil war.
Cambodia's Commerce Minister Cham Prasidh said foreign investors with production bases in Thailand ought to consider Cambodia for future expansion because of the Kingdom’s greater resistance to floods. Speaking at Phnom Penh Honda’s 20th anniversary yesterday, the Commerce minister said that while Cambodia faces floods each year, the floods did not seriously affect most factories and industries.
“Flooding affects only rice fields along the Mekong River – not factories. We also forecast that this year, the floods will be bigger than the last year, and we are trying to curb any negative effects to the economy. Cambodia’s industry sector, which is mostly located away from flooded areas, should not be affected,” he said. “Cambodia has great business areas, offers a better investment climate and incentives for foreign investors. I do believe that it is a great opportunity for other Japanese companies that have factories in Thailand to consider Cambodia.”
Cambodia is trying to attract foreign investors with manufacturing bases in neighbouring countries, with promises their factories would be safer from flooding.
The Phnom Penh Post reported that Commerce Minister Cham Prasidh is appealing to foreign investors with production bases in neighbouring countries, particularly Thailand, to expand into Cambodia because their factories would be less vulnerable to flooding. The commerce minister boasted that even though Cambodia also faces floods every year, only rice fields along the Mekong River are affected. Most factories are left untouched.
The World Bank urged the Cambodian government Wednesday to accelerate reforms while taking a participatory approach to its National Strategic Development Plan. Speaking at a meeting of the Development Partner Coordination Committee, World Bank Country Director Annette Dixon congratulated the government on its current development plan from 2009 to 2013. "The country successfully overcame both the 2009 global downturn and the 2011 flood and has managed to sustain high economic growth, reduce poverty and improve critical health and education indicators," she said.
Officials yesterday confirmed that the Cambodian government will receive a majority of the revenue share from Chevron’s offshore Block A oil permit area near Sihanoukville in the Gulf of Thailand. The government expects to issue the American oil giant a production permit licence by the end of this year. Ek ThA, A spokesman from the Office of the Council of Ministers said the Cambodian government and Chevron were presently working on the deal, which had not yet been concluded.
Cambodia is working on three fronts to improve its energy security and supply, including the development of its first oil-producing asset, looking for ways to resolve a disagreement over disputed territory in the Gulf of Thailand, and studying the economic viability of building its own refinery.
"Having that security, having our own supply and our own refining will ... enable the country to grow at a faster rate," Sok Khavan, acting director general of the Cambodian National Petroleum Authority, said at the Oil & Gas Investor Summit in Singapore Wednesday. "Right now our electricity price and energy price [are] very high and the benefit that we get from a lower energy price and increased supply security will be more growth," he added.
The Cambodian government expects U.S. oil major Chevron Corp. to begin developing the country's first offshore oil field early next year, and hopes the nation will become a regional hot spot for oil and gas investment, a government official said Wednesday.
Cambodia has vast untapped oil and gas resources both on land and offshore, but development has been slow as the country has emerged from the genocidal rule of the Khmer Rouge and decades of war.
Citibank, one of the largest banks in the US, showed stronger interest in Cambodia yesterday when the Bangkok-based Thailand head of the big international bank met with Economy and Finance Minister Kheat Chhon.
Citibank is the consumer banking arm of the financial services giant Citigroup, which as of 2010 was the third-largest bank holding company in the US by total assets, after Bank of America and JP Morgan Chase.
AN HOUR’S drive south of Phnom Penh, deep in rural Cambodia, Chrek Heang is doing the rounds of his rapidly expanding poultry and fisheries business. Just four years ago he was living, like most of his countrymen, in a small wooden hut with a tin roof, tending to 1,000 chickens. Now he can chat away in the cavernous living room of his new brick-built five-bedroom house, the proud owner of 11,000 chickens as well as 30,000 fish, and the employer of five people. In a dirt-poor country like Cambodia, barely a generation on from the terror of the Khmer Rouge and a devastating civil war, more like Mr Chrek Heang are badly needed.
He would never have prospered without three vital loans from a bank: an initial one of $10,000, followed by another of $25,000 and the last of $70,000. The lender was the Association of Cambodian Local Economic Development Agencies (ACLEDA), to give the bank its full and very unsexy title. It was originally set up in 1992 by the United Nations and the International Labour Organisation as a microfinance non-governmental organisation. The aim then was to support refugees and demobbed fighters at a time when the war-ravaged country was in tatters. Its goals now stretch beyond Cambodia’s borders.
Food & Agriculture
In an effort to promote rice exports among Cambodian farmers, government officials said on Tuesday they will register the type of rice seed set for export and the rice seed produced for the national market.
Cham Prasidh, Minister of Commerce, said on the closing of the 2nd Rice Forum held by the Cambodian Small and Medium Enterprise Union his ministry will list the varieties of rice seed needed for local and international markets and communicate it to the farmers. “We have seven to eight kinds of rice seeds to label and then we can go ahead,” he said.
Cambodia's total export of milled rice via the single window office slightly increased by two per cent over the first nine months of this year compared to the same period last year, according to data from the Ministry of Agriculture.
Speaking at the Cambodian Rice Forum yesterday, Hean Vannhorn, deputy director general of the ministry and director of the single window secretariat, said the country exported 131,064 tonnes over the first nine months, compared to 128,368 tonnes in the same period last year.
Cambodians like pork. The average Cambodian consumes 9.29 kilogrammes of the meat a year and local farmers have long supplemented their incomes by selling an average of two pigs a year. In 2008, Cambodian farmers supplied around 2 million pigs, more than 90% of domestic demand. But the market for small-scale pig farmers is vanishing. Most of the pork local people now eat is imported from Thailand, or comes from large-scale producers who have seized the market once dominated by local farmers.Though bad for the farmers, the changes have been good for consumers: live pig prices have fallen 53.5% to about 7,000 riel (53 baht) per kilogramme in just one year, pork industry executives say.
Health & Life Sciences
Scientists in Bangkok are about to start work on a new flush toilet especially designed for the urban poor in Thailand, Cambodia, and Vietnam. Their aim is to create a toilet that will process wastewater in family homes and convert it into gas or electricity, saving families money and protecting them from deadly diseases caused by poor sanitation.
The Bangkok-based Asian Institute for Technology (AIT) is receiving a $5 million grant from the Bill &Melinda Gates Foundation for the project, part of an estimated $380 million effort by the foundation to tackle sanitation problems in Asia and Africa.
Cambodian villagers armed with a little medical know-how – and their mobile telephones – are the nation’s new foot soldiers in the fight against drug-resistant malaria. In the small village of Phnom Dambang near the Thai border, locals know that early detection and treatment is crucial to containing the virulent strain of the mosquito-borne disease that is blighting the region.
“The malaria here... can kill people in a short period of time if we don’t have the right treatment,” said Long Vuthy, whose home doubles as a walk-in clinic. The village is dotted with bright yellow signs emblazoned with pictures of mosquitoes, warning that the disease is prevalent in the area.
The Ministry of Post and Telecommunications officially launched the Telecommunication Regulator of Cambodia (TRC) yesterday in an attempt to establish laws to control, and resolve conflicts among, telecoms operators.
The move is likely to come as a relief to the eight telecom operators in Cambodia, because fierce competition has caused lower profits for all. Post and Telecommunications Minister So Khun said the TRC’s establishment supported other regulations for managing conflicts among mobile network operators (MNOs).
Prime Minister Hun Sen announced yesterday that Cambodia is going to build a new international airport in Phnom Penh, in response to the rising number of passengers received every year. The Kingdom is expected to get seven million tourists a year by 2020.
The initial concept was made by the Premier during the official launch of the 2012-2020 Tourism Development Strategic Plan at the Peace Palace in Phnom Penh, where Hun Sen said Cambodia is aiming to receive around 10 million tourists by 2020. He added that the existing airport is quite small. “In terms of long-term development, it requires us to have a feasibility study on building a new international airport in Phnom Penh that could receive more than 10 million passengers per year,” he said.
The slump in global markets has depressed demand for Cambodian products, leading to reduced growth forecasts by the Asian Development Bank (ADB) for 2012 and 2013.
“Falling global demand, especially in Europe and the US, means that the industry sector will grow at a slower pace this year,” said ADB Senior Country Economist for Cambodia Peter Brimble. “However, buoyancy in the services sector, particularly tourism, offsets to some extent the slowdown in garment exports.” Forecasts in ADB’s Asian Development Outlook 2012 Update (ADOU 2012), released, predict Cambodia’s gross domestic product to grow by 6.4% in 2012 and 6.8% in 2013, a slight drop from ADB’s earlier projections of 6.5% and 7% in the ADO of April 2012.
Cambodian Prime Minister Hun Sen on Thursday lashed out at a UN human rights envoy for writing "untrue" reports about the Southeast Asian nation, saying he should worry about his homeland Nepal instead.
The attack follows a scathing report by Surya Subedi last month that said a series of Cambodian land disputes "indicate an increasingly desperate and unhappy population". While Hun Sen did not accuse Subedi by name, the strongman premier said the author of the "untrue" writings was a national of a country that "has already abolished the monarchy" and "at this hour... has no constitution". "Hopefully, he will go and help his own country. That would be better than helping Cambodia," Hun Sen said in a speech to graduating students in Phnom Penh.
Cambodia's two main opposition parties have joined forces to challenge Prime Minister Hun Sen's 27-year grip on power at a general election next July, a spokesman for the new group said Wednesday.
The Cambodia National Rescue Party, formed by the Sam Rainsy Party and the Human Rights Party, received official approval from the interior ministry on Tuesday, said spokesman Pol Ham. It will be headed by opposition leader Sam Rainsy, who is seen as Hun Sen's main rival but who lives in France to avoid prison for a string of convictions that critics contend are politically motivated.
Cambodia’s two main opposition parties have formalized their merger by winning approval for self-exiled politician Sam Rainsy to be leader of the newly formed Cambodia National Rescue Party.
Spokesman Pol Ham said Tuesday that his new party was formed after the Sam Rainsy Party and Human Rights Party agreed in July to join forces. He said the Interior Minister Sar Kheng signed the official endorsement Friday recognizing Sam Rainsy as the new party’s president.
Cambodia's Anti-Corruption Unit (ACU) has received about 800 corruption-related complaints in the first eight months of this year, exceeding the whole last year of only 700 cases, Om Yintieng, ACU's Chairman, said Thursday.
"Among the 800 complaints, a half of them are made in conditions of anonymity," he told reporters on the sidelines of an anti-corruption seminar. "So far, we have investigated about 30 percent of the complaints, and in some cases, arrests will be made next week or next month." Cambodia is riddled with bribery and corruption. The Government of Cambodia sees corruption as obstacles to economic development, rule of law, democracy, social stability, as well as the main cause of poverty.
The United States is "deeply concerned" by Monday's conviction of Beehive Radio owner Mam Sonando and his "harsh sentence" of 20 years, State Department spokeswoman Victoria Nuland said.
In a statement released by the US Embassy Tuesday, Nuland also called for the activist to be released "immediately" after being found guilty of leading a secession in Kratie. "A number of observers in Cambodia have noted that the charges against him appear to have been politically-motivated, based on his frequent criticism of the government," she said.
A UN envoy has called on the international community to pay more attention to human rights issues in Cambodia.
The call comes amid ongoing land disputes and legal harassment of activists. Surya Subedi is the United Nations Special Rapporteur on human rights in Cambodia and has submitted a detailed report on land rights to the UN Human Rights Council, following a visit in May. "I met with a number of groups of villages who did not know what was happening to the land around them, so some of them came to know only when a company representative appeared on the side [of the road] telling them that land had granted to them in concession," Mr Subedi told Connect Asia.
A single visa for Thailand and Cambodia will be the test phase of a wider project that will offer a single visa for five of the ASEAN nations located in the lower Mekong River basin.
Suggestions that Thailand has ducked out of the five country single visa project are incorrect. Reliable industry sources confirmed Thailand and Cambodia were selected to test the system and generate feedback that will be evaluated and lead to a wider application including other Mekong Region neighbours, Laos, Myanmar and Vietnam. Tourism Council of Thailand vice president, Thanate Vorasaran, told TTR Weekly, Thursday, that a single visa for travel between Thailand and Cambodia was part of an agreement signed in 2007 and was specifically identified as a pilot project.
More than half of Cambodians living in rural areas still do not have access to treated water, about 200 people heard yesterday at a forum at the Phnom Penh Hotel. The event was sponsored by WaterSHED, an NGO funded by USAID’s Regional Development Mission-Asia and the Stone Family Foundation.
According to WaterSHED’s Executive Director Aun Hengly, Cambodian government officials placed the percentage of Cambodians in rural areas with treated water at 40.5 per cent. According to the Cambodian Millennium Development Goals of 2003, the Kingdom aims to increase this to 50 per cent by 2015. Complete national coverage is expected to be reached in 2025, according to the National Strategy on Water and Sanitation of 2011.
Cambodia will receive a grant of US$3.3 million from the World Trade Organisation to support rice milling, silk production and development of the Department of International Cooperation, according to Heng Sovannarith, communication officer for Trade Wide Sector Approach.
Sovannarith said the Ministry of Commerce would receive the grant from the WTO’s Enhanced Integrated Framework (EIF) project. He said the money would go toward implementing EIF’s three-year project in three main areas: building trading capacities, increasing milled rice export and enhancing high value silk.
In a union office for garment workers on the outskirts of the capital on a recent afternoon, Tith Srey Mom and her sister Mach were pondering what to do next. After losing a 10-year legal battle to keep their 200-square-meter plot of land, they were being evicted. All legal avenues had been exhausted. All they could do was wait for the police to come and forcibly remove them.
The sisters are from Chrolang Village, about 30 miles south of Phnom Penh. Tith Srey Mom’s grandparents assumed control of their land in 1979 as the Khmer Rouge were retreating. The family tilled the patch of dirt for decades, growing rice to subsidize their meager incomes.
Four companies in Cambodia — EZECOM, Manulife Cambodia, Angkor Gold and Unilever — have demonstrated their commitment to corporate social responsibility this month by giving support to schools, a hospital and sustainable living.
CSR Asia, the leading provider of information, training, research and consultancy services on sustainable business practices in Asia, defines corporate social responsibility as “a company’s commitment to operating in an economically, socially and environmentally sustainable manner while balancing the interests of diverse stakeholders”.
Communication services provider EZECOM agreed to a deal with the Cambodian Ministry of Education to provide free internet services and computer equipment to 50 schools around the country. “This particular project will allow us to put our network of 9,000 kilometres of fibre-optic to use by providing educational opportunities to young people across the country,” EZECOM chief executive Paul Blanche-Horgan said.