Cambodia and its future in Asean

17/01/2011
Dr K. Kesavapany
Bangkok Post

Dr K. Kesavapany, director of Singapore-based Institute of Southeast Asian Studies, which focuses on social, political, and economic developments in Southeast Asia, spoke recently with reporter May Kunmakara of the Phnom Penh Post about the benefits and challenges of Cambodia's membership in the Association of Southeast Asian Nations.

Q: As a researcher who has been studying Asean-related matters for many years, what do you think are the benefits Cambodia faces as a member of Asean?

A: Cambodia is a small country and on its own it does not have a voice with other bigger countries. But when we join Asean, our voice is magnified ten times because when we speak we speak with another nine countries - that's the first benefit.

Secondly, Cambodia has suffered many setbacks from the civil war, which created terrible problems in terms of manpower, economic damage, and social relocation. So the second benefit is Cambodia is able to recover more quickly, as there is likely to be more investments, technical assistance and knowledge-sharing.

And what about the challenges?

Cambodia's challenges are not so much in being part of Asean. It is situated between six powers - including China on one hand, US on the other and India is becoming stronger. So the big challenge right now is how to maintain independence in the middle of that? We can see [Cambodia has] many challenges in the political field.

Another challenge is competing in the economic field because investment can go anywhere - why should it come to Southeast Asia or to Cambodia? In Asean, we can show we are a nation with the purchasing power of 500 million people, so the standard of living improves. But for this to happen, we must increase our cooperation within Asean, and that's the big challenge.

There is a GDP per capita gap in Cambodia, Laos, Vietnam and Burma compared to the other six Asean member states. What efforts are being made to close the gap?

We see the way to help people is to offer education and technical skills. For example, I can give you a lot of bread, but you will eat up the bread and put your hand out for more bread. Rather, I should teach you how to grow rice, teach you a better way to do it and how to teach your children. In all of this you need technical skills.

So we have to educate to go forward, but the going may be slow. Just as Singapore, in 1965 was very poor but now it is very rich, mainly because we invested a lot in education. So, you must educate your people.

And, university education alone is not enough. You must educate them from the beginning and then also develop technical education because not everybody can go to university. If everybody went to university, who will do the technical work?

The other difficult thing is language because Cambodia was French speaking, but, nowadays the major language is English, so to connect to people outside, you have to learn English. That's why we've spent a lot of time on English - it's not that we love it but let's say there are advantages to knowing English.

Asean has three main pillars member states have to comply with [Asean Political-Security Community, Economic Community and Socio-Cultural Community]. However, the member states sometimes have some problems with them, for example the border issues between Cambodia and Thailand. What initiatives or policies are there to solve issues where member states don't cooperate?

Well, you see, we are still very young countries - most of us just got our independence. And, we still have our national pride - we don't like interference in our internal affairs. So right from the beginning Asean has said it will not interfere in the internal affairs of each country - like Burma. So, regarding the problem between Cambodia and Thailand, the two countries must try to work it out. Maybe, it will need time.

Early this year, Asean signed a free trade agreement with many other big economic countries - China, Japan and Korea. What will Cambodia gain from that and what might the challenges be in the coming years?

The free trade area is reducing tariffs which make goods cheaper. The benefit is people generally enjoy more trade, and then more investment comes, also creating more jobs. But one challenge might be that China will produce goods more cheaply than Cambodia and then export to Cambodia. So the challenge lies in educating your people in order to offer them more skills to move up the production and value chain to compete.

Asean is considering issuing a single regional currency as EU did? Do you think we can we reach that goal?

No, I don't think we can because we have such different [economic] levels. We can see now what is happening in Europe with the single currency. They were almost bankrupted - mainly Ireland and Greece - but they were all affected. So why do we need to introduce something that now is not much of a success? But let's see how it goes. For the moment, we don't need it and I don't see the possibility of it happening.

What has Asean learned from the European financial crisis to prevent something similar happening here?

Well, we already learned from the crisis in 1997. You know, we make sure that we have enough capital and foreign reserves. And, we tightened our spending habits. In 1997 when the crisis happened in Asia, that was actually good for us because we learned a lot of things.

In the 2008 crisis, the European powers could not come to teach us because we were not in trouble - they were. And they were learning what we learned in 1997. So, all the countries in Asia are in more stable positions now because we have more foreign reserves, we are better capitalised and we have more transparency in economic decision-making.

What do you think is Cambodia's future as a member of Asean?

I think Cambodia will have a very bright future. It has political stability - that's number one that you can concentrate on. Number two is the population is very young, so if you train them well, if you invest in the education, there will be a real strengthening in the knowledge. Also because of the political stability, you have a lot of capital coming in, both in tourism and the garment industry as well as improvements in the of agricultural sector. There is also some potential in extractive industries. That's also good for your country.

Cambodia is expecting to gain revenue from the extractive industries in 2012. Does the government need to make special preparations for that?

Well, this industry is good but what is the value-add for the country? If companies just extract and sell the raw material to other countries, that's not good enough for the country. You need to educate your own people, giving them the technical skills to be able to have your own downstream [oil and gas].