Saving the seven symbols

By Phearun Chey, The Phnom Penh Post, June 6, 2012

Royal Decree on Designation of Animals and Plants as National Symbols of the Kingdom of Cambodia. Photograph supplied by the Ministry of Agriculture, Forestry, and Fisheries

An alarming amount of young Cambodians have no idea know what our national symbols are, a shocking surprise given their knee-jerk reactions when responding affirmatively to being nationalists.

Yang Hakvun, 20, a student at Vanda Institute, said, “I want to know about the symbols of our national pride, but I don’t know what those animals and plants are.”

Hakvun studies accounting, and has heard nothing of Cambodia’s national symbols in the media.

According to a Royal Decree dated March 21, 2005 on the Designation of Animals and Plants as National Symbols of the Kingdom of Cambodia, the seven symbols are the kouprey, giant ibis, royal turtle, giant Mekong barb, sugar palm, rumdul and chicken egg banana.

The kouprey is a kind of wild animal that dwells in low land and forests. They are more intelligent than other species in their family, and they are strong and agile. However, the kouprey is now extinct – it hasn’t been spotted since 1983.

The royal turtle stands out from other turtles because while other turtle species have five claws, the royal turtle has four. The turtle was believed to be extinct in Cambodia, but the animal was spotted again in 1995 in Koh Kong Province. People named it the “royal turtle” because its eggs were eaten only by the king.

The giant Mekong barb is the biggest kind of river fish in Cambodia; its weight can be up to 300 kilograms. There are pictures of Giant Mekong Barb carved on Angkor Wat bas reliefs. The fish is so delicious that Cambodians prefers to eat it more than any other fish, while its scales are used to make shuttlecock.

The giant ibis can be found in Preh Vihear Province, where its population stands around 100. The bird has been widely written about in popular Khmer songs and traditional tales. The giant ibis is very intelligent: if it fails at hunting in one place, the bird will never return to that location.

Sugar palm is a kind of trees with a single stem, large stump and cylindrical trunk with a height of approximately 10 metres. People use sugar palm’s leaves for building roofs, its dates for making cookies and the trunk for building boats.

Rumdul is a kind of flower that’s known for its alluring fragrance. The elderly compare the smell of a rumdul to a virgin girl, both fresh in nature. Rumdul flowers are a white-yellow colour and you can smell them from miles away.

The chicken egg banana is used as an offering to the spirits, Thevada and for presents in many ceremonies. Its purpose is largely ceremonial.

H.E. Chuch Phoeurn, Secretary of State, responsible for Cultural Heritage and Museums, said, “By selecting the seven national symbols of Cambodia, we must distinguish whether it’s rare or extinct to be preserved such as the kouprey, the giant ibis and the royal turtle.”

“Those things must be praised and valued by Cambodian people, relate to the history and culture as in the songs or books and be especially advantageous to every-day life.”

“For example, sugar palm can provide benefits from its roots to its leaves.”

His Excellency added, “The Ministry of Culture and Fine Arts has planned and is preparing an application to put these National Symbols of Cambodia as the Memory of the World Register, like Tuol Sleng Genocide Museum.”

Om Ratha, 22, a Beltei International Institute student majoring in English Literature, said, “I know about the animals and plants from when I read through a magazine, which made me want to read more about these symbols.”

A history teacher at Intraktevi High School, Ke Sokhena, said that she knew about the animals and plants as National Symbols of Cambodia, but she did not have time to talk about it due to a tight lesson schedule.

However, the animals and plants chosen as symbols are taught in geography class, she said.

ADB launches $613m aid plan for Cambodia

Jul 7, 2011
AFP

PHNOM PENH - THE Asian Development Bank (ADB) said on Thursday it will invest around US$500 million (S$613 million) in Cambodia over the next three years to reduce poverty, mainly through infrastructure and agriculture projects.

The soft loan forms part of a new 'country partnership strategy' for 2011 to 2013 between the government and the bank, said Peter Brimble, senior country economist for ADB in Cambodia.

Under the new plan, the ADB aims 'to reach out to Cambodia's poor' with a focus on agribusiness enterprises and rural-to-urban transport links, Mr Brimble told reporters at a press conference in the capital Phnom Penh.

ADB, Cambodia Announce $500 Million Three-Year Partnership Strategy [-More money into the corrupt Hun Xen regime?]

07/07/2011

The FINANCIAL

MANILA, PHILIPPINES – Cambodia and the Asian Development Bank (ADB) have forged a new Country Partnership Strategy (CPS) for 2011-2013 which defines ADB’s strategic approach in Cambodia, in line with Government priorities.

The CPS outlines an ADB resource investment plan of around $500 million.

ADB will contribute to reducing poverty through a dual focus on inclusive economic growth and social development and equity. “The Country Partnership Strategy sets out an ambitious roadmap to reach out to Cambodia’s poor with an integrated approach to rural development,” said Peter Brimble, Senior Country Economist of ADB’s Cambodia Resident Mission.

With nearly 75% of the population engaged in agriculture, a focus on competitive farms and agribusiness enterprises, and related rural infrastructure, will create jobs and raise incomes, and improve food security. ADB will continue improving irrigation systems to promote agricultural productivity in support of the Government’s Rice Production and Export Promotion Policy.

Mekong region farming must adapt to social shifts in next 30 years - report

A farmer sprays pesticide over her rice field in Nakhonsawan province, 270 km (167 miles) north of Bangkok, Nov. 22, 2009. REUTERS/Chaiwat Subprasom

01 Apr 2010
By Thin Lei Win

BANGKOK (AlertNet) - In the Mekong river region, global warming is not the first worry on farmers' minds. Over the next 30 years, mainly social shifts such as a rising population and evolving diets will drive changes in agriculture, researchers said in a wide-ranging report.

But if farmers adapt to a growing demand for food and for increasingly popular meat and vegetables without depleting limited water reserves, they will also be better prepared for future effects of climate change, including an expected rise in the sea level which would flood some highly productive land, they said.

"In the next 20 or 30 years, climate change is not likely to be a major driver of change but beyond that, climatic shifts may call for major changes in agriculture," said the 24-page report by the International Water Management Institute, entitled "Rethinking Agriculture in the Greater Mekong Subregion".

The population of the region - which comprises Laos, Myanmar, Thailand, Cambodia, Vietnam and China's Yunnan Province - is forecast to rise to over 340 million from 275 million, pushing up demand for food by at least a quarter and putting pressure on farmland, according to the report launched this week.

Meanwhile, rapid urbanisation and hydropower and irrigation developments in the region could wreak havoc on farming and fisheries.

So agricultural practices must be rethought - and not only in order to meet the demand for food, but also to protect the 30 to 40 percent of the region's labour force who earn their living in the sector.

Moreover, the region is a significant agricultural exporter. For example, between 2008 and 2009 Thailand and Vietnam exported more than 14 million tonnes of rice, mostly to Africa.

Overall, using more nimble and sophisticated farming methods will ensure farmers are well-equipped to deal with any upheaval - social or climatic - that awaits them in the next century.

"People's capacity to adapt to change is closely linked to wealth, diversification of income sources, education and access to infrastructure and technology. Promoting broad-based agricultural development to lift deprived rural communities out of poverty is probably the most effective adaptation strategy available," the report said.

Some recommendations by the report's authors:

• Land should be better managed so more crops can be grown in less space
• Fish can be cultivated in rice paddies. Rice paddies provide natural food for fish, while fish eat weeds and insects in the paddy field and fish manure fertilises rice
• Precautions should be taken to avoid losing rice and other crops in the process of drying, packing and transporting it. Such losses are estimated to be between 10 and 40 percent.
• Governments can promote agricultural diversification to protect farmers against wholesale crop failures
• Insurance schemes can be introduced to reduce the risk of adopting new practices. As one author, Robyn Johnston, put it, "we're asking for change from poor farmers who have very few options".
• Tariffs can be imposed on pesticides to discourage unnecessary use of the environmentally-harmful chemicals
• Water can be used more economically by, for example, collecting and storing water run-off on farms

EU To Help ‘Bridge Gap’ in Food Security

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
25 February 2010

The European Union announced Thursday it will provide $25 million for five projects to help Cambodia deal with climate change and rising food prices.

“The EU has decided to implement a very big program of food security that will help the poor people in rural areas of Cambodia to go to overcome this food price,” Ajay Markanday, Cambodia’s Food and Agricultural Organization representative, told reporters Thursday.

The projects are designed to “bridge the gap” between emergency food aid and longer-term development, by improving agricultural production, the EU said in a statement.

“This aid project is very important for Cambodia,” Srun Sakhum, deputy secretary-general of the Ministry of Agriculture, told reporters. “The project will provide rice seedlings and fertilizer and training to the poor farmers to promote agriculture products to avoid food insecurity as Cambodia faces high prices and climate change.”

He also said the projects will promote the growing of produce, the development of fish farms and irrigation improvement. This will improve overall nutrition, he said, and help the country prepare against possible adverse affects of climate change.

Separately on Thursday, the Ministry of Environment joined the EU, UNDP and the Swedish and Dutch development agencies in launching the Cambodian Climate Change Alliance, an effort to join developing countries together in mitigating the effects of climate change.

Catching Cambodia on the cusp of development

February 14 2010
By Elaine Moore
Financial Times (UK)

Douglas Clayton, founder of frontier market fund manager Leopard Capital, has a habit of relocating to the country he believes is on the cusp of development. Right now, his home is Cambodia.

“It’s fun to be in countries that are changing rapidly,” he says. “Cambodia is where Thailand was 30 years ago, and where Vietnam was 15 years ago. There is a lot going on.”

Leopard Capital manages funds in what it calls “overlooked, transitional economies”. It boasts contrarian investor Marc Faber, author of the Gloom, Boom and Doom newsletter, as a non-executive director and seeks to invest in start-ups as well as existing businesses in South East Asia.

In April 2008 it launched the Leopard Cambodia Fund, which closed in January 2010 with more than £34m (€39m $53m) to invest in a variety of multi-sector Cambodia projects. Mr Clayton says a second Cambodian fund is planned for later in 2010.

Investors tend to have some knowledge of Asian developing economies and tolerance for the idiosyncrasies that investment in these countries involves.

Cambodia’s economy is, at around $8bn (£5bn, €6bn), smaller than some multi-national companies, and with per capita gross domestic product of less than $800, it is still one of the poorest countries in the world.

Another obstacle to investment is the lack of transparency and endemic corruption in the country. The 2008 Transparency International survey ranked Cambodia 166 out of 180 countries.

“The legal system in Cambodia is a work in progress but it gets better every year,” says Mr Clayton. “Cambodia is no worse that any other south-east Asian developing country and most importantly, the government wants to attract foreign investment.”

In fact, Mr Clayton rates Cambodia alongside Hong Kong and Singapore as one of the most open countries to do business in. Corporate income tax is 9 per cent and there are no laws against 100 per cent foreign ownership of companies, although land can only be fully owned by Cambodians.

After it was ravaged by the Khmer Rouge in the 1970s Cambodia has experienced 30 years of remarkable growth and has attracted a steady stream of investors lured by the country’s political stability under long-serving Prime Minister Hun Sen, and the potential for its undeveloped natural resources.

The capital city may still lack a coherent public transportation system or large shopping centre, but its transformation from ghost town to thriving city is used to illustrate Cambodia as a post-war success story.

Between 2000 and 2007 the country’s economy grew by 9.5 per cent a year, second only to China.

When the Cambodia fund was launched by Leopard Asia in April 2008, the founders planned to raise $100m, with a projected investment return of 30 per cent.

But as the global recession took hold across Asia, interest in frontier funds such as the Leopard Cambodia Fund, which require investors to tie in their money for relatively long periods of time, dwindled, and the group decided to close the first fund and invest the money.

So far the largest investment made has been $5m to CamGSM, which operates Cambodia’s largest mobile phone network. As with many developing countries, landline coverage in Cambodia is fairly sparse, but mobile phones are widely owned.

The fund has also invested $2m into Kingdom Breweries, a Cambodian beer brewery, which aims to produce high quality beer in a microbrewery in Phnom Penh; over $1m in Greenside Holdings to construct a rural power distribution system; and $1.5m for 24 per cent of a property project in downtown Siem Reap, near the tourist attraction of Angkor Wat.

The fund will also invest up to $4m into Cambodia Plantations to lease approximately 3,000 hectares of land to grow rice. The first harvest is expected in 2011.

Agriculture remains one of the dominant industries in Cambodia and a number of countries such as Malaysia and Korea have taken advantage of the cheap price of land to lease thousands of hectares to grow rice.

The second Cambodian fund is expected to continue investment in agriculture, as well as potentially including investment in Laos.

Before this is launched the group will focus on two new Sri Lanka funds. The private equity Leopard Sri Lanka fund aims to raise $100m, while the Leopard Sri Lanka Value fund will seek to raise $30m to invest in listed equity. Although Sri Lanka is a more sophisticated and larger economy than Cambodia, it has lacked investors while in the grip of a brutal civil war. Leopard Capital plans to invest in industries that were already well developed but came to a halt during the war, such as tourism, retail and agriculture.

“We are the first wave of money coming into the economy,” says Mr Clayton. “Once the world realises that this country is safe again this economy is going to take off.”

UN Agency To Prioritise Development Areas In Cambodia

PHNOM PENH, Jan 22 (Bernama) -- The Cambodian government has said that its development partner, the United Nations Development Programme (UNDP), is planning to prioritise five areas for development projects in the country from 2011 to 2015, China's Xinhua news agency reported.

A statement released by the Council for the Development of Cambodia (CDC) on Friday, said government officials from various institutions had held a meeting with their development partner UNDP to review the implementation of projects assisted by the UNDP in 2009 and the ongoing projects for years ahead.

The statement said the meeting was chaired by Keat Chhon, deputy prime minister and minister of the economy and finance, and also the first vice chairman of the CDC.

From 2006 through 2010, the UNDP were focusing on governance; promotion of human rights protection, agriculture and poverty in rural area; capacity building and human resource development; and national development plan.

UNDP has assisted Cambodia between 80 million and US$120 million a year.

Cambodia gives big boost to military budget

14% of the national budget will be allocated to defense, including the upkeep of Brigade B-70 (Left), Hun Sen's private bodyguards unit, in stark contrast to the 1.7% budget spent on agriculture, Cambodia's economic backbone

By Ek Madra

PHNOM PENH, Oct 31 (Reuters) - Cambodia, one of Southeast Asia's poorest countries, plans to boost defense and security spending by 23 percent next year, its budget showed on Saturday, raising the prospect of a clash with the IMF.

Cambodia plans to spend $274 million on defense and security next year, up from $223 million this year, the budget showed. The total budget for calendar 2010 was $1.97 billion, which meant the military was allocated about 14 percent of total spending.

That compares with 1.7 percent spent on agriculture, the backbone of Cambodia's economy, and 0.7 percent on water resources. About 1.7 percent was set aside for rural development.

Military spending is a sensitive topic in Cambodia because of the millions of dollars of donor money flowing into the country, largely to social programmes.

"This big budget for defense is meant for preventative measures in response to international conflicts," said government spokesman Phay Siphan.

Siphan said the spending was unrelated to tensions with neighbouring Thailand over land surrounding a 900-year-old, cliff-top Hindu temple known as Preah Vihear. Skirmishes in the border area have killed seven troops in the past year.

Thailand is challenging a U.N. decision to make the temple a world heritage site under Cambodian jurisdiction. Cambodia was awarded the temple in a 1962 international court ruling that did not determine who owns 1.8 square miles (4.6 sq km) next to it.

The International Monetary Fund (IMF) criticised Cambodia last year for its military spending, leading the Cambodian government to cut back its defense budget during a debate in parliament after questioning by the IMF.

"Donors will not be happy," Ou Vireak, head of the Cambodian Center for Human Rights, said of the latest military budget.

He said Prime Minister Hun Sen was likely trying to whip up nationalist support by projecting an image of a strong military at a time of heightened tension with Thailand.

"By doing so, he is turning the country effectively into a military state," he said.

(Editing by Jason Szep and Dean Yates)

UAE seeks East Asia food security links [-Looming land lease and evictions for the UAE?]

Sultan Bin Saeed Al Mansouri, Minister of Economy, said the UAE is looking for partners in rice, wheat, sugar and meat production and Emirati delegations have been negotiating with potential partners to achieve this goal.Image Credit: Supplied Picture

UAE explores investment in Cambodian rice

October 18, 2009
By Duraid Al Baik, Associate Editor
Gulf News

Dubai: Rice consumed in the UAE might soon come from Cambodia as the visit of the UAE delegation to the East Asian country proves "very encouraging" according to Sultan Bin Saeed Al Mansouri, Minister of Economy.

Al Mansouri, who headed the Emirati delegation to Cambodia last week, told Gulf News there is great potential in agricultural investment there and a technical team has been formed to evaluate the feasibility of launching a large-scale planting facility there next year.

The minister, who just concluded an official visit there, said Cambodia could become a hub for UAE investments in a variety of activities including food production and fisheries.

"The visit was very successful in exploring the potential for investments in the agriculture sector and other economic sectors including tourism," he said.

"We went to Cambodia to explore the feasibility of producing rice as part of the government's policy to achieve food security in 15 basic food items; we realised that other food products might be successful as well, including soya beans and meat," he said.

In addition, he said the fact that the Cambodian capital, Phnom Penh, is just a one-hour flight from Bangkok, Thailand, makes it very attractive for tourism from the Gulf and the rest of the Middle East.

"Thus, tourism represents another investment opportunity for investors from the UAE," Al Mansouri said.

Cambodia produces 7 million tonnes of rice per annum with the potential to double the harvest if modern technology is used.

One third of its rice is consumed locally and the rest is exported to neighbouring countries including Thailand and Vietnam from where it is exported to the rest of the world.

The UAE consumes 800,000 tonnes of rice of a variety of types, all of which is imported from a number of countries.

Research

The delegation visited a research centre that is striving to enhance the quantity and quality of rice that Cambodia grows and explored the possibility of conducting tests to produce the kinds of rice that are popular in the UAE.

If an agreement materialises, Cambodia will be the fourth country after Sudan, Egypt and Pakistan to receive UAE agricultural investments intended to achieve a food security plan drawn up by the federal government.

A number of private local companies are taking part as strategic partners to assess, invest and manage agricultural projects in foreign locations.

Al Mansouri said the technical team will study investment laws and infrastructure that will contribute to the success of investment in Cambodia and will start detailed negotiations to gain a full picture about the feasibility of investment in the agricultural project.

"The delegation will assess the possession of land either by purchase or through a 99-year lease contract with the government.

"The VIP welcome for the UAE delegation illustrated the great interest on the part of Cambodia in investments from the UAE. The delegation was received by His Majesty Norodom Sihamoni, King of Cambodia and Prime Minister Hun Sin, in addition to eight other ministers including Deputy Prime Minister and Minister of Finance Economy Keat Chhon.

"All Cambodian officials expressed deep interest in promoting relations between their country and the UAE," he said.

He said the UAE is looking for partners in rice, wheat, sugar and meat production and Emirati delegations have been in direct negotiations with potential partners to achieve this goal.

No financial limit

Al Mansouri said: "We are looking for potential partners to invest in agriculture projects abroad including countries in Asia, Africa and the Middle East."

He added that there is no financial limit to how much the UAE can invest in these projects since the objective is to achieve food security for the country.

"We have been looking for investments in meat-producing projects and wheat farms in Australia.

"Canada has substantial opportunity for wheat production for the UAE," he added.

Apart from building a strategic reserve in 15 food items which have been identified as the most necessary for residents of the UAE, he said the strategic reserve can be used to curb manipulation of prices in case of shortages in the market.

Khudaim Abdullah Al Dar'ie, Vice President of Dahra Agricultural Company (DAC) and member of the UAE delegation to Thailand, said the technical team will test all aspects of rice production in Cambodia including laboratory tests on the current production and its suitability for the market and consumer tastes in the UAE.

"Logistics, transportation and storage facilities will be checked to ensure the feasibility of the UAE investments in Cambodia," Al Dar'ie said.

DAC is the strategic partner of the UAE government in foreign agricultural investment and is currently managing projects in Egypt, Pakistan, Spain and the US.

Al Mansouri called on other countries in the Gulf Cooperation Council (GCC) to take a unified stand and start negotiating foreign agricultural investments as a bloc, a step that he said would give the GCC an advantage in negotiating their terms.

"We are aware of similar moves from parties in the GCC to invest in agricultural projects in foreign destinations. We believe that with the expertise and potential we have in the region, the UAE can play a great role in amalgamating the goal of achieving food security in the region," he added.

Key Sectors Challenged by Downturn: UNDP

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
10 July 2009

The world economic crisis is having a direct impact on four of Cambodia’s key economic drivers, which will need to become more competitive, according to a report released by UNDP this month.

Agriculture, construction, garments and tourism each face challenges from the economic downturn, and “Cambodia now needs to consolidate its progress, nurture its potential and sustain its growth,” the UNDP said in its report, “Cambodia Country Competitiveness: Driving Economic Growth and Poverty Reduction.”

“It is a unique opportunity right now,” Douglas Broaderick, the UNDP’s chief representative, told VOA Khmer. “Cambodia needs to get some of the things done that could set-up Cambodia to be stronger economically and to be able to help people in a much better way, in terms of competitiveness linked to economic growth.”

The agricultural sector, which generates a third of Cambodia’s GDP and employs more than half its workforce of 8 million people, suffers from low education in the rural work force, limited access to financing, poor roads and irrigation and limited market access, the report said.

The UNDP recommended the development of rural non-farm economies, such as roads, rural electrification, education and financial training, as well as better coordination between suppliers and manufacturers.

And while the cost of labor is a main motive for garment manufacturers to come into Cambodia, productivity remains lower than neighboring countries, the report said, citing as an example productivity that is three times lower than in Thailand.

The UNDP also recommended that the government re-examine its investment laws, to improve the manufacturing of textiles and garments, which comprised 12 percent of the GDP in 2007 and employed more than 360,000 people.

The sector lost 51,000 jobs between September 2008 and March 2009, as a global economic crisis, kindled by a US financial meltdown, spread. Around 70 factories have closed in that time.

The UNDP recommended training workers to begin producing goods higher in value, and to improve industrial relations.

Meanwhile, competitiveness in the tourism sector remains poor, ranking 112th of 130 countries at a recent World Economic Forum, due in part to high energy costs and expensive flights, as well as limited infrastructure and costs associated with corruption, the UNDP said.

Human resources in the sector remain low, and an uneven application of policies and rules plagues the sector.

“Rich cultural assets, such as Angkor Wat, give Cambodia a competitive advantage, but reliance on Angkor Wat as the primary tourist attraction cannot be sustained,” the report said.

The UNDP recommened relaxing tourist visa restrictions, exploring open sky policies and reducing the costs and improving the quality of tourism products.

In the construction sector, Cambodia has enjoyed an increase in both scale and value of projects, including high-rise apartment and office buildings currently under construction.

The country has the lowest wages for construction workers in Southeast Asia, but productivity is relatively low and there are shortages of labor to meet demands and of skilled workers, the report said.

Engineers and architects are overwhelmingly foreign, while electricians, welders, carpenters and other skilled workers are in short supply.

Added to these difficulties is the complicated constrution law, which means it takes an average 710 days for approval of construction permits—compared to 200 days in Vietnam and 150 days in Thailand.

Companies say they resort to paying bribes in order to shorten the time frame.

“The highly bureaucratic regulation of licensing in the construction sector may reduce its competitiveness,” the report said.

Cambodia is at the bottom 10 percent of countries in the World Bank’s corruption index, leading to a dearth of investment from the world’s largest industrialized countries, whose own national laws forbid participation in corrupt practices.

The UNDP recommended investments in vocational training, improvements to permit procedures and the strengthening and enforcement of building standards.

With the four key sectors flagging, costs remain high in information and communication technology, discouraging further investment.

Overall, the UNDP recommended putting more resources into education, as Cambodia lags behind its Southeast Asian neighbors, ranking lowest in the region.

Cheam Yiep, a Cambodian People’s Party lawmaker and head of the National Assembly’s finance commitee, said the UNDP’s analysis was “just partly true,” but he did not elaborate.

Still, the goverment will take the report’s findings under consideration, he said.

Out Of Luck?

UNFORTUNATE: Cambodian workers leave after their shift at a garment factory in Phnom Penh. (Photo courtesy: TANG CHHIN SOTHY/ AFP)
UNDER CONSTRUCTION: Foreign companies that were the main drivers of the Cambodia’s construction sector have been winding down their activities in response to developments in their home countries. (Photo courtesy: TANG CHHIN SOTHY/ AFP)
BONE OF CONTENTION: The Preah Vihear temple. (Photo courtesy: The Straits Times/ AsiaNews)

2009-01-31
By BRUCE GALE In Phnom Penh
The Straits Times (Singapore)
AsiaNews

Just as the stage seemed set for further growth, the four drivers of Cambodia’s economy—agriculture, garment exports, tourism and construction—were hit by changes in external conditions.

"Unlucky.” This was the assessment of the Cambodian economy by Vikram Nehru, the World Bank’s chief economist for East Asia and the Pacific, late last year. It certainly seems appropriate.

While citizens in just about every country in the region can blame the current global economic storm for at least some of their problems, Cambodians probably have more reason than most to feel aggrieved.

Still one of the world’s poorest countries, Cambodia was nevertheless doing well before the global crisis hit. Recovering from a long period of political and social disruption dating back to the 1970s, the economy grew by an average of 11.1% a year between 2004 and 2007.

And the elections of July last year, which saw a landslide victory for the ruling Cambodian People’s Party, suggested that the country would soon be able to add political stability to its list of attractions.

The garment sector, which began to expand rapidly in the mid-1990s, provided employment for about 350,000 people. The tourism industry was also booming, with the number of foreign visitors rising by more than 20% annually. Further evidence of the country’s success could be seen in the growing level of direct foreign investment, which reached a high of 10% of gross domestic product (GDP) in 2007.

There were problems, of course. They included rampant corruption, rising inflation, a dysfunctional public service, infrastructure bottlenecks and a developing property market bubble. But with the economy making great strides, and with leaders no longer preoccupied with political survival, there was hope that at least some of these issues would be addressed.

Indeed, soon after the elections, economic managers moved quickly to minimise financial sector risks arising from the enthusiasm with which local banks were rushing to profit from the economic boom. The central bank doubled reserve requirements in July, introduced a ceiling on loans to the real estate sector, then tripled capital requirements in September. Meanwhile, plans were well advanced for the establishment of a stock market.

But just as the stage seemed set for further growth, the four drivers of the Cambodian economy—agriculture, garment exports, tourism and construction—were hit by changes in external conditions.

The tourism industry got into trouble as early as July, when the decision by Unesco to list Preah Vihear temple as a World Heritage Site resulted in a military stand-off between Cambodian and Thai forces. Cambodia also suffered from the effects of Thailand’s internal turmoil last month, when anti-government protesters forced the closure of Bangkok’s international airport. The result was a wave of cancellation of hotel reservations at Siem Reap during the height of the tourist season. The global financial crisis looks set to cut further into tourist arrivals.

The garment industry, meanwhile, has begun to suffer from lower demand in the United States, its main export market. Expectations that rice exports would boost economic growth have also been dashed by the fall in international prices since their mid-2008 peak.

The juxtaposition of these political and economic developments has already been reflected in a 25-per-cent drop in revenues from the kingdom’s trade-dependent railway network last year. Rail links with Thailand were cut completely during the tension with Thailand in October.

Finally, South Korean and other foreign companies that were the main drivers of the nation’s construction sector have been winding down their activities in response to developments in their home countries. Modern Cambodia’s first-ever property boom is no more.

Influenced, perhaps, by years of rapid growth, the government late last year rejected as too gloomy an International Monetary Fund report that suggested that GDP growth would fall to 4.8% this year. But officials have since responded to the global slowdown by announcing a budget that increased spending and offered incentives to the garment industry. They have also delayed the launch of the stock exchange.

Early last month, foreign donors demonstrated their continued faith in the country by pledging more than US$950 million in aid, an increase of almost $300 million over pledges made in 2007.

Even so, there is little doubt that the nation faces difficult times. Foreign direct investment fell last year and, according to the World Bank, will likely fall again this year.

With the garment and tourism sectors faltering, widespread unemployment is a distinct possibility. Fifty per cent of the population is under 20 years of age, suggesting that a large number of job seekers will begin to enter the workforce over the next few years.

Yet all is not lost. While international rice prices have fallen, they are still relatively high. Programmes designed to boost agriculture could help absorb some of the unemployed.

Meanwhile, continued strong supervision of the banking sector, an increase in government-funded infrastructure projects and further moves to upgrade the legal framework for investment could help prepare the country for the inevitable recovery. In times like these, Cambodia needs to make its own luck.

Cambodia for sale by Hun Sen: Price tag $3 bln

Cambodia holds land deal talks

November 20 2008
By Raphael Minder in Hong Kong
Financial Times (Hong Kong)

Cambodia is in talks with several Asian and Middle Eastern governments to receive as much as $3bn in agricultural investment in return for millions of hectares in land concessions, according to a senior government official.

Some of the deals would be finalised “in coming months”, said Suos Yara, under-secretary of state responsible for economic co-operation.

The revelation comes as impoverished countries rich in fertile land and water such as Cambodia, but also nations in east Africa, seek agriculture investments from resource-poor but capital-rich countries.

Kuwait and Qatar were “very strongly interested” in securing more farming land, he said, with South Korea and the Philippines, which suffered from rice shortages this year, among potential Asian investors.

“Food prices have recently fallen but that really makes little difference because the food supply issue will be there for the long term,” he said. “With this financial crisis, we need to seize this opportunity to develop our farming and switch [foreign] investment from construction to agriculture.”

Kuwait has already agreed to give Cambodia loans totalling $546m (€436m, £369m) to develop agriculture, the second largest aid pledge ever received by Cambodia, after aid and loans totalling $601m offered by China last year.

This week, Daewoo Logistics of South Korea secured a landmark deal with Madagascar to grow food crops to send back to Seoul on a 99-year lease. Daewoo hopes to farm its Madagascar lease for free but is promising local jobs and infrastructure investments in road and irrigation.

Suos Yara would not detail the terms of the potential deals but said leases would run between 70 and 90 years. He did not say how much investors will pay for the leases, with the $3bn more likely in infrastructure investments than rent.

Phnom Penh calculates that Cambodia has 6m hectares available for farming, of which 2.5m are under cultivation. By comparison, the Korean deal with Madagascar covers 1.3m hectares.

Apart from boosting farming acreage, Suos Yara said the deals would make an equally significant contribution in terms of infrastructure and technology upgrades in a country that has emerged from decades of war and a 1970s genocide.

Last year, Cambodia produced 2.5m tonnes of rice, of which about 1.3m was exported, from a sector that relies on a single annual harvest and family-run farms. “With better technology and irrigation, rice production could double in some areas,” he said.

Cambodia’s farming push comes as the government faces an abrupt economic slowdown after averaging growth of 9 per cent over the past decade, as Korean property developers and other cash-strapped foreign investors start to shelve real estate projects.

Cambodia attracted about $3bn of foreign direct investment in 2007, of which 45 per cent was in real estate projects and 25 per cent in agriculture. Suos Yara said the land deals would help maintain foreign investment at such levels but with about half of the total coming from farming investments.

The country has suffered a food crisis, with the Asian Development Bank providing $35m in emergency food assistance last month. However, Suos Yara said conditions had returned to normal. “It was a distribution problem and not a food shortage problem,” he said.

While most of the potential investors were seeking to bolster their food reserves, Phnom Penh had also been talking to biofuel producers, including Indonesia, about ceding land for crops such as jatropha, a succulent plant becoming increasingly popular in the production of biofuels.

Experts: Climate Change a Worry in Cambodia, Too

Thida Win, VOA Khmer
Original report from Phnom Penh
25/05/2007

Experts from the government and Geres, a French environmental group, said recently that Cambodia should be just as worried about global climate change as any country.

As a poor agricultural country, Cambodia risks food supply problems in a world where climate patterns are changing.

Recent statistics show that in the last five years, 70 percent of Cambodia's rice crop has been damaged by flood and about 20 percent from drought.

Mekong agriculture ministers to discuss food security issues

10-04-2007
VNS

BEIJING — Agriculture ministers of six Greater Mekong sub-region countries met in Beijing yesterday for the first time to discuss a far-reaching programme in agricultural co-operation.

The six ministers of Cambodia, China’s Yunnan Province and Guangxi Zhuang Autonomous Region, Laos, Myanmar, Thailand and Viet Nam have since 1992 been working together under the GMS Economic Co-operation Programme initiated by the Asian Development Bank (ADB).

The programme has helped create transport corridors among the six countries, enabling faster trade of goods, and increased economic growth.

Urooj Malik, director of ADB’s Southeast Asia Department, said that agriculture must aim toward a more prosperous yet socially equitable sector, in which the full benefits of the "new agriculture" are shared by the poor.

Changes in the area have resulted in a range of new issues for the countries to address such as the possible effects on national and subregional food security on the rural poor because of the switch from food to bio-energy crops.

New animal and crop disease risks are becoming prominent, especially with the recent outbreaks of avian influenza in some countries of the subregion.

To deal with these issues, the countries must increase their capacities in science and technology as well as create new policies and regulations and food safety standards, the ADB said.

Over the past few years, an advisory body to the subregion’s agriculture ministers, the Working Group on Agriculture, has co-ordinated with a variety of stakeholders to create the Core Agriculture Support Programme.

These stakeholders include government and donor agencies as well as international and regional research and development organisations, non-government organisations and civil society.

The programme focuses on cross-border issues to encourage cross-border trade and investment in agriculture while contributing to food security and poverty reduction and ensuring the protection of the environment and sustainable use of natural resources.

Included also are the use of advanced agricultural science and technology in biosafety and biotechnology areas, policy and investment co-operation in biofuels and rural renewable energy, and the establishment of emergency response systems for agriculture-related crises.

The ministers’ meeting was preceded by a meeting on Sunday of senior agriculture officials from the six countries to finalise the framework for the cooperation programme agreement.