Mr. Frederic Sanchez, President of the French-Cambodian Business Council,
HE Jean-Claude Poimboeuf, French Ambassador to the Kingdom of Cambodia,
Ladies, Gentlemen and Honorable Guests,
I am so glad to be able to participate in this meeting with the Cambodian-French Business Council organized by the MEDEF International, which I had a chance to address once back in 2005. I wish to express my sincere thanks and high evaluation for MEDEF International and French-Cambodian Business Council for initiating this important program and allowing me to share some socio-economic updates and evolutions relating of Cambodia, especially, the opportunity for business cooperation and investment between Cambodia and France. Please allow me to welcome the presence of Presidents and Representatives of French companies for this event, which clearly marks increasing impression of French business community on Cambodia.
In the past two decades, Cambodia has been recognized by its rapidly improving change in politics, security, economy, social affairs, trade, and investment. It would be better for me to list for you some indicators that reflect progress and evolution of Cambodia.
Firstly, need for electricity. The need for electricity, which stood at 107 megawatt in 2000, has now increased to 572 megawatt in 2010 and 931 megawatt in 2015. Secondly, import of fuel, the amount of fuel imported in 2005 was roughly 734,000 tons had reached 1.5 million tons in 2010 and 1.7 million tons in 2014. Thirdly, rehabilitation of infrastructure, out of 15,315 Kilometers of National Road, Cambodia restored and built road infrastructure up to 2,186 Kilometers by 2005. By the year 2010, we had rehabilitated and built up to 4,362 Kilometers and 5,982 Kilometers in 2014. Fourthly, exports of apparel. Cambodia exported garments for 1,125 million USD in 2000. The figure had reached 3,000 million USD in 2010 and 5,632 million USD in 2014. Fifthly, export of agricultural products. Cambodia exported agricultural products for some 35 million USD in 2000. The figure had reached 131 million USD in 2010 and 493 million USD in 2014, of which rice export, which shared only 216,000 USD in 2000, had increased to about 35 million USD in 2010 and 249 million USD in 2014. Sixthly, tourist arrival to Cambodia in 2000 was only 460,000. The figure had reached 2.5 million in 2010 and 4.5 million in 2014.
Cambodia also realized its economic growth at an average of 7.7% in the last two decades. World Bank has considered Cambodia as one of the record breaking in terms of growth in the world. GDP per capita has grown from 253 USD in 1998 to 1,225 USD in 2015. Based these indicators, the poverty rate has been brought down from 53.2% in 2004 to 13.5% in 2014 making Cambodia the fourth successful country in the world in reducing poverty. As of this time, Cambodia is advancing from low-income country to lower-middle income country in the near future.
As of this moment, Cambodia advances from low-income to lower-middle income country in the very near future and will continue to become Upper-middle income country by 2030. In general, we not maintain firmly macroeconomic stability but also ascertain with pride progress in all fields – political and social. While achieving that distribution of growth to every Cambodian, especially ability to get a job, access to infrastructure and income has largely improved, while reducing poverty among the people. Harnessing Cambodia’s long-term vision towards 2030, especially the “rectangular strategy – phase III” to achieve growth, work, equity and efficiency in Cambodia, the Royal Government organized and put out, on 26 August 2015, a “policy for industrial development 2015-2025” to guide Cambodia’s industrial development. The policy will take part in maintaining sustainably and inclusively high economic growth by means of diversifying our economy, strengthening competition, and enhancing productivity.
The formation and issuance of the policy indicates necessity and urgency in developing “new strategy for economic growth” responding to changes of local economic structure as well as regional and world economic architectures, which include:
1. Favorable geopolitical condition for economic and industrial connectivity of Cambodia to the region, especially the framework for creation of ASEAN Economic Community and regional economic liberalization
2. Industrial role in creating growth and new jobs in the context of open economy, demographic dividend and major structural changes that are favorable for advancement of industrial sector
3. Industrial role is policy tool for strengthening connectivity of major economic buttresses such as agriculture and service, which will contribute to enhancing further economic growth
4. Significance of industrial policy is the works of structural adjustment and national economic management institutions aimed at raising high economic productivity in the long term and evade “the middle income country’s trap.”
In this meaning, the policy for industrial development 2015-2025 is a framework paper that affirms to every stakeholder (state ministries/institutions, development partners, and private operators) directions that Cambodia is advancing to. In order to measure implementation of the policy, the Royal Government put out four concrete measures to achieve by end of 2018:
1. Lowering price of electricity for targeted industrial zone, which includes expansion of coverage and increase of trust in supply of electricity,
2. Organize and implement master plan for development of transport system and means of logistics,
3. Strengthening and developing mechanism for labor market management and skill training, and
4. Developing and transforming Sihanouk province into a multipurpose model of special economic zone.
In this policy framework, aim of investment attraction will focus on three major targets, such as (1) to maintain and expand current activity, (2) to attract new activity that will provide high value added, especially processing what Cambodia has to its best ability and (3) to include Cambodia as part of regional and world processing system.
At the same time, on 22 October 2015, the Royal Government of Cambodia promulgated the implementation of “national policy for employment 2015-2025” aimed at increasing appropriate chance for jobs for Cambodian people and increasing labor productivity, promoting skill and human resource development, and strengthening of job market governance. Issuance of the policy not only interrelates and complements with the policy for industrial development 2015-2025 but also serves as a common framework for relevant institutions to take coordinated actions in line with common objectives and with responsibility.
As we all know, by the end of 2015, Cambodia and nine other country members of ASEAN will advance into a new era of ASEAN Economic Community that we know clearly that it will bring more opportunity as well as challenges. Hence, I would encourage you to leave your thought of investing in Cambodia is for the Cambodian market where there are only 15 million people but a whole market along the Mekong (GMS) with 326 million population, and even more, the ASEAN market of 630 million people. In this meaning, I wish to see French companies invest and produce in Cambodia and export to ASEAN free of tax. I also extend my warm welcome to French companies to invest in Cambodia to serve the EU market for the favorable conditions provided for import of quota-free, duty-free products from Cambodia.
I know that in Asia, there are French companies in China or Thailand and some other countries. In this time of regional supply chain, meaning no product is produced in one location or one country from beginning to end, I think that those French companies can consider some parts of their production lines residing in Cambodia. The country possesses major potentials in agriculture, agro-industry, processing industry, manufacturing, productions and services and comparative advantage of a country that is open, applies reasonable wage, possesses young and active labor (some 9.2 million people between 15 and 54 years of age or 59.4% of the whole population of Cambodia), and enjoys favorable condition of weather, land and natural resource. These potentials are waiting for sustainable investment and development of your companies.
Let me share with you that since when there was the Paris Peace Agreement in 1991 to the present, the government and people of France provided invaluable support politically, financially and technically for the sake of searching peace and restoration and development of Cambodia. Moreover, in the framework of human resource development, the government of France has provided scholarships to Cambodian students to continue their tertiary studies in various fields – law, medicine, and engineering. These assistances have contributed to Cambodia’s ability to stand up as a nation with reputation and civilization once again. However, it is worth making a remark that investment and business undertaken by the French companies in Cambodia is still low as there are only about 50 companies, including some 100 other small companies, serving in various sectors.
On behalf of the Royal Government of Cambodia, I would take this opportune moment to express my sincere thanks and high evaluation for the participations of French companies, small or big, such as VINCI, TOTAL, etc. in Cambodia’s socio-economic development. It is certain that these actions not only contributed to Cambodia’s economic growth but also help strengthen diplomatic relations and political history between our two countries. Before ending this briefing, allow me to invite you to make investment in Cambodia and be our partners through concrete contributions you may have in effort to make a bright future for Cambodia. I wish to emphasize that the Royal Government of Cambodia has always considered private sector as the engine of growth and based on this perception, the Royal Government has initiated mechanism for consultation with the private sector in all fields to discuss issues relating to investment facilitation aimed at improving investment environment to attract flow of foreign direct investment. On behalf of the Royal Government, I guarantee to every investors environment that is favorable and driving for investment, especially peace, security, political and macroeconomic stability, legal and institutional frameworks that are effective, transparent, accountable, and predictable.
Finally, please allow me to wish you all successes in your works. Thank you for your attention./.
