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Keynote Address at the The
ASEAN-Korea CEO Summit on "Economic and Social Development through the Promotion of Trade and Investment"
Jeju-do,
Korea, 31st May 2009
Excellencies, Ladies and Gentlemen
It is my great
honor and pleasure today to participate in the
ASEAN-Korea CEO Summit. First of all, allow me to
express my sincere thanks to Mr. Kyung Shik Sohn, Chairman of the Korea
Chamber of Commerce and Industry, for organizing this important summit and
inviting me to deliver the keynote address concerning the "Economic
and Social Development through the Promotion of Trade and Investment"
during this globally challenging time.
There is concern
and uncertainty in the world economic prospects over the past months while the
negative impacts of the global financial crisis have been aggravating. In the
advanced economies, consumer and business confidences have dropped to levels
that we have never seen before, and general economic activities have also
drastically decreased. The combination of financial crisis and shrinking demands
in the advanced economies is having negative impacts on ASEAN and ROK economies
which could cause significant negative impacts on growth.
Indeed, each
country has actively taken bold measures in order to reverse short-term impacts
from the crisis including measures to strengthen management and restore
confidence in financial sector as well as measures to promote growth and protect
social welfare of the people. In my view, in addition to our efforts at the
national level, the promotion of regional economic integration will enlarge the
scale of our regional market and enhance regional trade and investment, which is
an important factor in reducing the excessive dependence on outside markets and
increasing our competitiveness in attracting investment to our region. Indeed,
the success in these efforts will only be possible when we, governments, private
sector and development partners concerned, speed up our cooperation and expand
its coverage to be more comprehensive by focusing on policy coordination, laws,
regulations and procedures related to business, trade and investment; building
institutional capacity and human resources; investing in building linkages of
physical infrastructures; and removing trade barriers in particular eliminating
the development gaps in ASEAN in order to strengthen our competitiveness as a
big regional economic block.
I would like to take this opportunity to raise some of the key
issues related to Cambodia’s current socio-economic developments and our vision
for future. In addition, I will elaborate on what I believe as the comparative
advantage for investing in Cambodia.
The Royal Government of Cambodia has been implementing serious
reforms in all sectors, including Public Financial Management Reform, Financial
Sector Development, Private Sector Development and Governance Reform including
land management reform, administrative reform and legal and judicial reforms
aimed at improving business and investment climate through trade facilitation,
promotion of the private sector participation in physical infrastructure and
development of small and medium enterprises (SMEs). The Royal Government has
strived to achieve all these reforms in an environment of political stability
and peace in the country, which is the most important pre-condition for Cambodia
to move forward in its efforts to improve standards of living of the people, to
respect for human rights and dignity, to strengthen democracy and to achieve
sustainable development.
Having achieved steady growth and successes over the past several
years, Cambodia is now confident that we are on an important path toward a
bright future, full of optimism and hopes. Indeed, the economic growth has been
robust, averaging at 9.4 percent during the last decade with the record high of
13.3 percent in 2005. The economic growth also reached 10.8 percent and 10.2
percent in 2006 and 2007 respectively. Despite the global economic downturn, the
Cambodia’s economy could grow by 7% in 2008, which is still a good rate compared
with neighboring countries in the region.
In 2009, while the global economy continues to be under difficult
condition, Cambodia's economic growth will decrease further. However, the Royal
Government is determined to achieve positive economic growth. The inflation,
which increased to more than 20% by the mid of 2008, has fallen at year end. It
is estimated that inflation will decrease to a single digit in 2009. Cambodia’s
banking system remains strong in general, well capitalized and highly liquid.
Bank deposits and loans continued to grow in 2008 reflecting public confidence
in the banking system. Our international reserves position has been favorable
and was doubled during the last two and a half years only, from USD1 billion in
2006 to USD2 billion in 2008, which is equal to 3 months of total imported goods
and services for domestic consumption.
In the difficult situation resulting from the financial crisis
and global economic downturn, the Royal Government has taken systematic and
well-sequenced measures in order to ensure macro-economic stability and strong
financial sector as well as to stimulate growth through fiscal measures, trade
facilitation and investment. The Royal Government has also focused on further
strengthening the social safety net for the people. In this sense, the Royal
Government warmly welcomes the private sector who wishes to seize the
opportunities in this difficult circumstance to share "Win-Win" situation
with us to tackle our challenges together in the short term and to strengthen
the foundation and sustainability of regional growth in the long term through
their investment and business activities.
Cambodia is a country with great and unexploited potential. The
potential in agriculture, both agro-industry and agro-processing, is tremendous
with fertile land and favorable climate. At the same time, Cambodia is still in
needs of a number of infrastructures such as transport system,
telecommunication, electricity and irrigation system.
The Royal Government clearly understands that agriculture is the key sector to enhance and
expand the base for economic growth and to reduce the vulnerability due to
external instability and crisis through utilizing more on the vast potential of
our domestic economy. Indeed, agriculture sector will provide rapid and positive
impacts, through government’s efforts, on improving the livelihood of people
especially in rural areas where 80 percent of the total population live.
In this perspective, the Royal Government continues to accord
high priority in improving productivity and diversifying the agriculture as well
as promoting agro-businesses. The Royal Government continues to enhance
partnership between smallholder farmers with large-scale farms and agriculture
enterprises and between economic land concessionaires and social land
concessionaires especially in the areas of agro-industry plantation such as
rubber plantation, in line with strategic development plan of rubber, cashew nut
and sugar cane.
At the same time, the Royal Government has also provided land for
large scale agriculture and agro-industry projects through economic land
concessions to private companies. The Royal Government of Cambodia supports
large scale investments in agriculture and agro-industry through economic land
concessions, in which the main objectives are socio-economic development, jobs
creation and improvement in living standards in rural areas by linking
development with sustainable environment conservation.
In the tourism sector, Cambodia is fortunate to inherit great
historical and cultural heritages especially Angkor Wat Temple and a beautiful
natural environment along the mountain ranges, forests, lakes, seashores and
offshore islands. Tourism continues to grow and significantly contribute to the
development of the service sector. The diversity of historical and cultural
heritages, natural and cultural parks such as forests, lakes, seashores and
attractive landscapes has turned the tourism into an attractive sector for
investment in Cambodia. Indeed, the great potential of tourism sector will play
the key role in linking production of goods with demands from hotels,
restaurants and other modern markets. Cambodia is indeed very pleased with the
constant leading numbers of Korean tourists visiting Cambodia over the past few
years.
At the same
time, the promising future from the commercialization of oil, gas and other
mineral resources has opened up new economic opportunities and hopes for
Cambodia to become a new development zone in the region. These factors
highlighted the opportunity to achieve high and sustainable economic growth in
the medium and long terms as well as to promote fast economic diversification.
In addition to the potential of these sectors, Cambodia membership in ASEAN, WTO, AFTA,
Trade Agreement with China, EU and the US as well as other development
initiatives in the region have provided investors with market accesses to most
countries around the world. Many agreements have not been utilized to their
potential leaving lots of investment opportunities for investors to explore and
make investments.
The Royal Government is committed to working together with the
private sector to address challenges in order to improve investment climate that
would benefit both local and foreign investors, particularly the promotion of
trade facilitation, which could turn the private sector to be the driving force
for growth, which is the "life or death" factor for Cambodia.
In this spirit , the Royal Government has focused on improving
governance which is a necessary condition to promote private investments. The
Royal Government has taken measures to remove obstacles to private sector
development by focusing on improving investment climate including improvement of
laws, regulations and administrative procedures.
With key achievements briefly mentioned earlier, the Royal
Government has committed to continue implementing in-depth reforms to improve
domestic business environment. In this sense, the Royal Government will continue
focusing on trade facilitation aimed at reducing costs in doing business
especially the costs related to export and import operations.
At the same time, the Royal Government will continue its focus on
establishing production bases in provinces and cities outside of Phnom Penh and
ensuring economic linkages among these provinces and cities with the rest of the
country. For this purpose, the Royal Government has established a number of
special economic zones (SEZs) along the borders with Thailand and Vietnam
including those in Koh Kong, Poipet, Phnom Den, surrounding areas of Phnom Penh
and Preah Sihanouk province with the purpose to attract more investments into
Cambodia. In addition to geographical advantages, the Royal Government has
implemented the “Single Window” mechanism at each location in order to
facilitate import-export procedures and save time. Moreover, the SEZs offer
investors superior and complete infrastructure and facilities, such as road
network, factory buildings, electricity supply, clean water, water treatment
plant, skill training, banking services, postal services and telecommunication,
etc.
Furthermore, strengthening tourism sector infrastructure and
ensuring the linkages between tourism and agriculture is an important for
upgrading the livelihood of people. In fact, a key component of this Royal
Government’s strategy is to establish green belt zone or agricultural
development zone surrounding tourist sites in order to achieve a pro-poor
tourism development. In this light, in order to facilitate and attract private
investments, the Royal Government has paid great attention on improving key
tourism infrastructure such as road network and airports in Phnom Penh, Siem
Reap, Sihanoukville, Koh Kong and other provinces. The Royal Government has
channeled more fund to build agricultural infrastructure network and provide
facilities to the development of green zones surrounding key tourist sites.
Indeed, in our
development philosophy, which has market system economy as the foundation, the
private sector is considered as the driving force for growth and the most
important partner of the government, who is a development strategist. In this
regard, we strongly hope that the priorities mentioned earlier will further open
new economic opportunities for Cambodia’s sustainable and equitable development.
I am very pleased with the increase of Korean investment flows
into Cambodia over the past decade to a number of important sectors such as real
estate development sector and financial and banking sector. Yet, I would like to invite Korean investors to explore opportunity
for cooperation and investment in Cambodia, namely in three key areas,
agriculture, tourism and oil/gas, where Cambodia has the comparative advantage.
Cambodia is also willing to cooperate with ASEAN and ROK to invest in
alternative sources of energy such as bio-fuels, hydroelectric power and other
energy sources.
Finally, I hope that our meeting today illustrates the long term
vision and the importance of investment and business development in each
country, as well as in our region. I encourage our businessmen and investors to
seize all investment opportunities provided by our region in order to contribute
to the efforts of building a safe and prosperous East Asia community.
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