Cambodia yearly trade deficit: $1.5 billion.
Cambodia expects 2008 growth of 7.3 percent - PM
Cambodia's economy is expected to expand by 7.3 percent this year, a slower
rate than in 2007 due to the pressure of high world oil prices, Prime Minister
Hun Sen said on Thursday.
However, a blossoming private sector, overseas aid, sustained foreign
investment and continued political stability should ensure healthy growth in
the key garment, tourism, construction and agriculture sectors, he said.
"Cambodia needs to sustain this growth to catch up with and keep pace with
neighbouring countries," Hun Sen said at a economic conference for
international investors.Cambodia's economy struggled during the 1990s to shake
off the legacy of decades of civil war and upheaval, including the atrocities
of the Khmer Rouge "Killing Fields".
However, it has taken off in the last few years, and expanded at an estimated
9.6 percent last year, making it one of the fastest-growing economies in the
world.Its gross domestic product is $8.4 billion, giving a per- capita annual
income of more than $500.
The garment sector, valued at $3.8 billion last year, represents the lion's
share of exports, a government report showed.The Southeast Asian nation also
received 1.7 million tourists last year and expects a 25 percent increase in
2008.
The report said reserves had increased by $600 million last year to $1.7
billion, but said the country ran a trade deficit of $1.5 billion, mainly due
to the increase in value of petroleum imports.
---------------
Special Economic Zones need more customers
Special Economic Zone (SEZ)s may have to wait for more customers before they
can be fully operational, says the Council for the Development of Cambodia
(CDC).
“SEZ infrastructure cannot be built too extensively because all the companies
with licenses for SEZs are still looking for customers,” CDC Secretary General
Sok Chenda said Wednesday in Phnom Penh at a Cambodian Club of Journalists
forum on the direction imports are taking.
Since 2006, the government has been licensing companies to invest in SEZs
across Cambodia, in order to promote industry and create more jobs. However
only one SEZ, in Svay Rieng province, is officially operational; the others are
being developed.
“We are pushing for the creation of SEZs because we need to diversify our basic
industries,” said Prime Minister Hun Sen, who has personally been behind the
creation of SEZs, believing they will help create a healthy economy in the
future. “The zones create many jobs,” he said.
Sok Sina, independent economic analyst, said SEZs are a large investment
project so investors will need time to develop projects which are going to be
competitive in the market.
“It’s OK to take time with SEZs,” he said.
The government has licensed companies to develop in 19 SEZs-in Phnom Penh,
Poipet and Sihanoukville; and in the provinces of Koh Kong, Kompong Cham,
Kampot, Takeo, Kandal and Svay Rieng. Last weekend the country’s largest SEZ to
date was created in Sihanoukville, potentially worth $US 3 billion..
“We hope the SEZ project will run when there are many customers; companies
cannot develop SEZs before they have customers,” said Sok Chenda..
-----------
Asian nations top investors for 2007
China overtook South Korea as Cambodia’s largest foreign investor last year,
but Japan showed increased interest in investment as opposed to aid, a senior
Cambodian economist said yesterday.
Speaking at a press conference in the capital, the secretary-general for the
government’s Council for the Development of Cambodia (CDC), Sok Chenda, gently
chided Western nations for lagging behind Asian nations in foreign direct
investment.
He said between 1994 and 2003 investment from Western nations made up just 15
percent of the country’s total, with 60 percent coming from Asian nations such
as Malaysia, China and Korea.
“I can’t predict foreign investment figures for 2008 but I hope for even more.
Prime Minister Hun Sen just returned from a visit to South Korea yesterday and
we are hopeful that will generate renewed investment interest there,” Chenda
said.
“There is also new interest from other quarters, and especially Japan. Japanese
investors have certainly now entered the doors of our home.”
Approved foreign investments from 1994 to 2007 totaled US$14.83 billion, he
said, with China accounting for US$1.76 billion of that total, South Korea
US$1.5 billion and Japan US$135 million. Domestic investment increased by 49 %
(45% in 2006), Chinese by 17%, and Korean by 5%.
Industrial investments (garment, shoes, cement…) made up 34 percent of that
total, followed by the service industry with 32 percent.
Agriculture made up just 7 percent, but Chenda said that was a promising area
of growth, and with a boom in global bio-fuel demand and the recent launch of
several food processing factories in Cambodia, it was expected to continue to
grow.
However he admitted the developing nation still faced obstacles, such as
Cambodia’s terrible trade balance and lack of secondary industries, which meant
container ships arrived full but often left with room to spare.
He also appealed to foreign governments to help Cambodia strengthen its ability
to curb money laundering, pointing out that the country lacked an investment
board to investigate potential investors thoroughly, such as the boards set up
in Thailand and Japan.
“Competing regionally remains less than easy. Trading partners use the words
‘friendly’ and ‘cooperation, but of course they always look after their own
interests,” he said.
----------
Expressway to link Phnom Penh with VN
A six-lane expressway linking Phnom Penh with the center of Vietnam’s Mekong
Delta “rice bowl” is in the wind.
Vietnamese and Cambodian authorities met Feb 26 to discuss the proposed highway
from Phnom Penh to Can Tho city, said Kem Borey, director of the Transport
Ministry’s Road Infrastructure Department yesterday.
Can Tho-with a population of over a million- is the thriving capital of
Vietnam’s fertile Mekong Delta, about 170 km southwest of Ho Chi-Minh City.
“Our Vietnamese counterparts have said that two US companies—from Los Angeles
and San Francisco—intend to build the 230 km highway,” said Kem Borey. “It’s
estimated it will cost US$20 million per kilometer [US$4.6 billion in total].”
He said the road will be BOT (Built-Operate-Transfer), which means the company
will receive toll fees from drivers who use the road, until they hand it over
to the two governments after 30 years of use.
Kem Borey said the highway will run from Can Tho, through An Giang province
before the final stretch of approximately 120 km from the border to Phnom Penh.
He added that the final route of this last stretch has not been finalized but
would either follow National Road 2 through Takeo province, National Road 21
through Takeo province, or comprise a new road traversing Kampot province.
The two sides are preparing reports and will meet in mid-March with the aim of
making a memorandum of understanding, Kem Boray said, adding that construction
should be completed by 2015. The six-land road will have a width of 35 meters,
with two more lanes likely to be added in a later phase.
He said that, because the Can Tho-Phnom Penh expressway will ultimately link
Vietnam’s “rice bowl” to Bangkok via Phnom Penh, it will promote socio-economic
development in the whole Mekong delta region, as well as in the two cities.
------------
Fast Food Chain KFC Delays Official Opening
The opening of Cambodia’s first international fast food chain KFC has been
delayed until next week, a company official said Tuesday.
The KFC was scheduled to open today with dry runs Monday and Tuesday but ran
into construction delays at its Monivong Boulevard location, said Debasish
Pattnaik, director of business development, project and investment for the
Royal Group, a co-owner of the franchise rights in Cambodia.
Pattnaik said a dry run for employees of the parent companies will begin today.
“It’s just to make sure that everything is OK and is run properly,” he said.
Royal Group and its partners have five other KFCs planned for Cambodia,” he
said.
------------
NagaCorp Reports 2007 Most Profitable Year Yet
By Douglas Gillison
and Kay Kimsong
Net gains at Phnom Penh’s only licensed casino skyrocketed in 2007, rising 54
percent over 2006 in the 12-year-old company’s best year to date, NagaCorp,
operator of the Naga World casino, announced.
The banner profits, which the company says are partly due to an increase in
clientele from around the region, come as industry experts forecast slowing
growth for the casino industry nationwide.
NagaCorp’s casino revenues in 2007 rose to $144 million, a 68.6 percent
increase over 2006, while net profits rose from $32.6 million to $50.2 million,
according to an annual financial statement released Friday, the company’s
second since listing on the Hong Kong stock exchange in October 2006.
“We attribute it to our marketing efforts and have had an increase in local
business from people with international passports,” Paul Simmons, senior vice
president for operations at Naga World, said Tuesday.
The company in 2007 launched its Premium Players Program to attract local
foreign passport holders who are permitted to gamble despite a prohibition on
casino gambling by Cambodians. They accounted for 81 percent of revenues at the
casino’s “public floor tables,” where walk-in gamblers, who are not part of
tour groups, can bet.
Such tables also accounted for more than half of 2007 revenues, according to
the statement.
The company, which is incorporated in the Cayman Islands, reported tax payments
to the Cambodian government of $1.7 million in 2007.
Simmons said that while many other Cambodian casinos depend on cross-border
clientele, NagaCorp draws gamblers from China, Malaysia, Singapore and
elsewhere.
Mey Vann, director of the Finance Ministry’s financial industry department,
said Tuesday that NagaWorld’s monopoly in the capital helped make it profitable.
Under a 1995 agreement, NagaCorp has until 2035 sole rights to operate a casino
within 200 km of Phnom Penh with the exceptions of Sihanoukville, the Vietnam
border area, as well as Kirirom and Bokor mountains.
Mey Vann also said that to avoid market saturation and attract more gamblers,
Cambodia’s rising number of casinos, forecast to generate $20 million in tax
revenues this year, should also offer entertainment and shopping.
“Gamblers may get bored if they only come to gamble,” he said.
CPP Senator Phu Kok An, owner of the Golden Crown casinos in Poipet and Kandal
province, said NagaWorld is in a different league to the country’s other
casinos.
Golden Crown casinos earned between $3 million and $4 million each last year,
he said.
Gamblers in Poipet must contend with the frustrations of border crossings, he
said, adding that if NagaWorld had competition in the capital, its margins
might be thinner.
“If Phnom Penh had two to three casinos, Naga wouldn’t be making so much
profit,” he said.
Political commentator Chea Vannath said Tuesday that Cambodia should find a way
to ensure that gambling, a religious sin on the order of drink and womanizing,
is not thrust in the public’s face.
“In Buddhism, as well as in Cambodian saying, gambling is one of the three
deadly sins,” she said.
--------------
$3 Billion Coastal Economic Zone to OpenBy Mean Veasna,
VOA Khmer Original report from Phnom Penh26 February 2008
China's Gainxu Taixu company and Cambodia International Economic Cooperation
Investment announced the opening of the Sihanoukville Special Economic Zone
Saturday, which could employ as many as 80,000 workers.
The investment was seen as a significant step to reduce widespread unemployment
and boost economic growth in Cambodia.
"One hundred percent of the products from this special economic zone will have
to be exported," Prime Minister Hun Sen said during an opening ceremony. "I am
convinced that the Cambodian economy will rise, finally employing more than
80,000 workers, as China has a lot of investments. And with the export, our
economic value is high and increasing." Not all are optimistic Chinese
investment will benefit Cambodia in the long run.
"What China cares most about is land, which can be rented or sold to investors
from other countries, and such a thing is not going to help our economy," said
opposition lawmaker Son Chhay. "Thus, the government has to encourage
investment from other countries, with honest investment and that have developed
industry, such as Japan or the US."
---------------------------------------------
S Korean President to visit Cambodia this year
PHNOM PENH, Feb. 26 (Xinhua) -- South Korean President Lee Myung Bak will visit
Cambodia sometime this year, at the invitation by Cambodian Prime Minister Hun
Sen during their Monday meeting in Seoul, a senior official said here Tuesday.
Lee will visit Cambodia to strengthen the cooperation in the fields of trade,
investment, economy and personal relations, Hor Namhong, Cambodian Deputy Prime
Minister and Foreign Minister, told a press conference.
Meeting with Cambodian Prime Minister Hun Sen, Lee stressed the need to enhance
bilateral ties and asked for greater support of South Korean firms wishing to
enter Cambodia's resource and construction markets. Since Lee was former
economic advisor for Hun Sen in 2000, the two men have had deep personal
relations, Hor said, adding that this year is also the 11th anniversary of the
establishment of the diplomatic relations between the two countries.
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