After delays, Cambodia rekindles stock market dream

PHNOM PENH (Reuters) – Construction cranes and unfinished high-rise buildings surround the silty marshland where a year from now Cambodia hopes to turn the page on decades of upheaval by opening a stock exchange.
The idea of a Cambodian stockmarket has been floated since the 1990s but has struggled for traction in a country known for a culture of political impunity, chronic poverty and a history of violence, including the Khmer Rouge "Killing Fields."
But authorities argue those days are over and plan to sign a deal this month with World City Co Ltd, a South Korean-backed developer, to start building a $6 million, four-storey stock exchange on the waterfront of a new financial district.
"We want to do it next year," Mey Vann, director of the financial industry department at Cambodia's Ministry of Economy and Finance, said in an interview. "It'll be good timing for us with the economic recovery."
It was supposed to open in September, a target set last year when South Korea's stock exchange operator agreed with the Cambodian government to set up and run a joint stock exchange.
But the global financial crisis intervened, ending an unprecedented boom which saw Cambodia's economy expand 10 percent annually in the five years up to 2008. Foreign investment collapsed, tourist arrivals fell by double digits and garment exports, a mainstay of the economy, shrank by 15 percent.
In recent weeks, Cambodian officials have cautioned against moving too fast, in some cases questioning whether a country whose education system was decimated during Pol Pot's 1975-79 reign of terror is ready to invest in stocks.
"We've been waiting for a green light," said Intyo Lee, project director for Korea Exchange, Asia's fourth-largest bourse operator which will own 49 percent of the exchange and is recruiting and training workers for it. Cambodian will own the rest.
"We're pretty much ready," he added, "but many people say it's too early. The government is trying to build consensus."
STARTING SMALL
The exchange expects to start small with just four or five companies issuing about $10 million worth of shares each, said Lee. That's comparable to neighboring Vietnam's first stock market launched in 2000 with its initial market capitalization of $43 million. Today, Vietnam's market is worth $27 billion.
Yet there are risks to Cambodian investors. In Vietnam, most of the investors were local, often unaware of the risks, and many were burned as the market steered a rollercoaster course. Meanwhile, foreign investors largely sought to dip into the potential high returns of an emerging frontier market while hedging their bets with a highly diversified portfolio.
Like its communist neighbor, Cambodia is giving privatizing state companies priority with a place to sell stock. The Finance Ministry has asked three state-owned companies to list shares: Telecom Cambodia, port operator Sihanoukville Autonomous Port and the Phnom Penh Water Supply Authority.
Some of those companies have a simple question: why do it?
"We don't have any financial constraints. I don't understand the reasons we are going to be listed," said Ek Sonn Chan, who runs the Phnom Penh Water Supply Authority, which employs about 600 people, has about $200 million in assets and generates about $25 million in annual revenue. He said the company is profitable.
"If we become a public company, maybe we are more responsible, more transparent and maybe we can help the government allocate financial support to our company. But in the meantime, we don't know much about how it happens. It's very new to Cambodia, very new to me," he said.
Others say the timing may not be right for some time. Foreign direct investment nearly halved to an estimated $490 million from $815 million in 2008, according to the International Monetary Fund, which expects Cambodia's economy to shrink nearly 3 percent this year before growing about 4 percent next year.
Most of the disappearing capital had flowed into construction projects, including a $2 billion satellite city on the outskirts of the capital Phnom Penh where the exchange will be built.
Developed by South Korean-backed World City, the two-year-old project known as Camko City aims to create a new financial district by 2018 spread over 125 hectares, complete with glass-walled office towers for stockbrokers, upmarket apartments, securities regulator offices and sleek retail spaces.
But construction has slowed, said Kim Duk-kon, a vice president at World City. Although the first phase is nearly complete with many of the residential villas built and sold, subsequent phases are on hold after capital dried up.
FLOODED SWAMPLAND
The area where the stock exchange will be built is flooded swampland on the edge of Boeung Kak Lake in the heart of the city. The Finance Ministry said the end of the rainy season this month will allow workers to begin building the exchange on the corner of what developers are calling Phnom Penh Boulevard.
Cambodian officials rejected an initial design, saying the exchange's exterior was too modern and not Cambodian enough. It has since been redesigned using traditional Khmer accents.
Vann at the Finance Ministry and Kim said a news conference this month will announce construction of the exchange. A new Securities and Exchange Commission of Cambodia, he added, is drafting market regulations that will be issued soon.
"We have a very good team at the Securities and Exchange Commission. They graduated from overseas. They are new blood in terms of enforcement of the law," he said. "Our law is very strict in terms of speculation."
Some observers are unconvinced and say authorities need to demonstrate how investors will be protected in a country with a reputation for corruption at nearly every level of the bureaucracy. Some fear speculative gambling by public employees.
David Cowen, deputy division chief for the International Monetary Fund's Asia and Pacific Department, met recently with the new securities regulator and urged its officials to work closely with the central National Bank of Cambodia.
He said the Commission would soon issue operational guidelines on securities firms. The IMF wants to see if those rules are consistent with banking laws and recognize the central National Bank of Cambodia's role as the nation's chief regulator.

Source: Yahoo News

Vietnam Trade Fair opens in Cambodia

The Vietnam Trade Fair 2009 “Friendship, Cooperation and Development”, the second of its kind, opened at the Mondial National Exhibition Centre in Phnom Penh on September 2.Attending the opening ceremony, Cambodian Deputy Prime Minister and Trade Minister Cham Prasit described the event as a great effort on the part of the Vietnamese Government to boost trade ties between the two countries toward the goal of raising two-way trade to US$2 billion in 2010, as set by Prime Ministers Nguyen Tan Dung and Hun Sen.Deputy PM Cham Prasit said that through trade fairs, trade turnover between the two countries has consistently increased in recent years from US$935 million in 2006 to almost US$1.7 billion in 2008 and is expected to be higher this year.He took this occasion to call on businesses from both countries to accelerate trade and investment for the benefit of the two peoples and nations.As many as 125 Vietnamese businesses are displaying their wares, including industrial products, commodities, foodstuff, cosmetics and garments.During fair, seminars on business and investment opportunities between enterprises of the two countries will also be held.
The fair will run through September 6. (VNA)

Japan dolls debut in Cambodia

PHNOM PENH (Kyodo) Japanese dolls were introduced for the first time to Cambodia on Tuesday as part of activities to mark Mekong-Japan Exchange Year 2009.

At the launch of the Japanese Dolls Exhibition in Phnom Penh, Kazuo Chujo, a councilor at the Japanese Embassy, said he hopes many Cambodians view the traditional, beautiful Japanese dolls that will be exhibited until Sept. 21.

"Traditional appreciation for dolls has resulted in a belief that dolls are not only children's toys but also works of art to be displayed and admired," he said.

He said Japan enjoys a rich culture of dolls, each with its own distinct meaning and purpose deeply connected to daily life.

According to Chujo, Japanese dolls are characterized by serene and delicate facial expressions and beautiful colors that show the richness of ancient costumes and pageantry.

The exhibition features about 70 dolls depicting Japanese traditions such as the Hina Matsuri (Doll Festival) and noh and kabuki dramas.

Yan Ny, director of Santhormuk Primary School, one of the largest schools in Phnom Penh, said at the exhibition he was impressed by the Japanese dolls as they are completely different from Cambodian ones in terms of character and style.

For Mekong-Japan Exchange Year 2009, various cultural events, including academic forums and youth programs, are being held in Japan and Mekong-region countries Cambodia, Laos, Vietnam, Thailand and Myanmar.

Source: The Japan Times

Promoting Vietnamese goods at the Cambodian border

Now that demand from Western customers is depressed by the global economic crisis, Vietnamese businesses have been eyeing Cambodia, a neighbouring market to which they have paid little attention in the past.

Fifty Vietnamese businesses joined an ‘export-on-the-spot’ fair on August 23 at the newly-opened Tinh Bien Border Economic Zone (BEZ). The new facility is at a border crossing between Vietnam’s delta province of An Giang and Cambodia’s Takeo province, south of the Cambodian capital, Phnom Penh.

The export fair was jointly organized by the Ministry of Industry and Trade and the An Giang province People’s Committee.

Boosting export through bonded zone

A bonded zone has been established, to which businesses can bring goods and contact many prospective buyers from Cambodia, from petty merchants to big distributors. The Vietnamese businesses will not have to pay taxes (VAT and export tariff) on their sales, and they can take advantage of simplified export procedures. Meanwhile, Cambodian distributors will be able to take ownership of goods right on the other side of the border.

Many businesses have expressed their interest in this model of selling goods. Vu Quoc Dung, representing the footware maker, Bita, said that the company had sent 100,000 sample pairs of shoes to distributors in Cambodia a month earlier, and now he had come to Tinh Bien to make direct contacts with partners. Phu An Sinh Company is striving to sell frozen and processed food to Cambodia, while Kem Nghia Company aims to sell low-priced beauticians’ tools.

Many enterprises have successfully contacted Cambodian distributors, while Sacombank has helped businesses in payment procedures.

Setting up direct distribution systems

To boost exports to Cambodia, My Hao Cosmetics Company has decided to recruit a Cambodian sales director. My Hao General Director Luong Van Vinh said that because Cambodian people’s income remains low, they are interested in low cost products. This has prompted My Hao to make products suitable to that market.

The Duy Tan Plastics Company has concluded that Vietnam-made household plasticwares can compete well with Thai products in the Cambodian market, said a representative of that firm. The company’s sales in Cambodia have increased steadily. Vinamit, a farm products processor, has also decided to set up a direct distribution network in Cambodia to boost sales instead of selling goods though agents. Nutifo od said that dairy products for old people and for children will be its key products in Cambodian market.

Exports to Cambodia have been increasing so smoothly that export revenues of HCMC businesses to Cambodia in the first seven months of 2009 increased by 44 percent over the same period of 2008, even though the city’s export revenues in general decreased by 13.9 percent. Medicines, fertilizer, steel, construction materials, cosmetics, fruit, seafood and apparel are in particularly high demand.

The HCM City Trade and Investment Promotion Centre has been tasked with coordination of the export offensive. Four big corporations are expected to support the plan’s implementation: the Saigon Trade Corporation, Saigon Co-op, the Saigon Industry Corporation and Saigon Agricultural Corporation. Another large scale Vietnamese products fair is planned to be held soon in the western Cambodian city of Battambang.

Source: Vietnam Net

Cambodian Network Looking for New Investors

Cambodia based CDMA operator, GT-Tell says that it is seeking an investor to fund its nationwide network expansion. Currently GT-Tell, operating under "Excell" brandname offers services both voice and data, including EVDO (3G) Mobile Broadband services in Phnom Penh and surrounding province.
Commercial operations of the company started last July and has signed up some 40,000 subscribers.
Japan's DoCoMo recently expressed an interest in buying a stake in a Cambodian mobile network without specifying any details. Millicom International recently existed the country by selling its 58.4% stake in CamGSM and associated companies for US$346 million.
Figures from the Mobile World notes that the country ended Q1 '09 with an estimated 4.4 million mobile phone users - representing a population penetration level of 30%. The country has eight mobile networks.
On the web: Excell - Mobile World

Source: Cellular-news

Vietnamese firm to build fertilizer plant in Cambodia

The Vietnam Five Star International Group on Friday said it will start work on a joint-venture fertilizer plant in Cambodia later this year.
The group will put up 90 percent of the chartered capital in a joint venture with the Investment and Development Joint Stock Company of Cambodia (IDCC) holding the remaining 10 percent.
Construction of the plant, located in Kean Svay District’s Somrongthom Commune, is expected to be completed within 20 months.
Once completed, the US$65-million plant will produce 350,000 tons of fertilizer a year.

Reported by Quang Thuan

Border trade zone draws thousands

AN GIANG — The official opening of the Tinh Bien Commercial Zone in An Giang Province today coincides with a festival to promote high quality Vietnamese goods in the Tinh Bien area that borders Cambodia.
The 10ha commercial zone with duty-free businesses attract 1,500 visitors every day.
Forty-three companies have registered to conduct business in the zone, representing a total of more than VND350 billion (US$19.5 million) in registered capital. Twenty-four of them have begun operations.
Domestic and international tourists are allowed to buy imported products at the supermarket in the Tinh Bien Commercial Zone, and are exempt from import taxes, value-added tax and special consumption taxes for the first VND500,000 of purchases.
The two-day festival of Vietnamese goods attracted 60 Vietnamese businesses to display high quality goods, including textiles and garments, footwear, handicrafts, chemicals, foodstuff and construction materials.
The festival is part of Viet Nam’s efforts to enhance exports and duty-free sales to Cambodia, according to organisers.
Participating enterprises could take the opportunity to promote trade and explore distribution channels, said the An Giang People’s Committee chairman, Lam Minh Chieu.
Cambodian distributors can also sign import deals at the event.
Nguyen Minh Tri, head of the zone’s management board, said the fair played a significant role in the export of Vietnamese goods to Cambodia.
During the fair, Hau Giang Pharmaceutical Joint-Stock Company and An Giang Province’s General Hospital will provide free health check-ups for 400 poor residents living in Cambodia’s border area.
The organisers will also take preventive measures against swine flu during the event.
An Giang, sharing a 94-km-long frontier with Cambodia, is home to five international and national border gates, including Tinh Bien, Vinh Xuong, Khanh Binh, Bac Dai and Vinh Hoi Dong.
The province said total export turnover of commodities transported via the five border gates in the first eight months of 2009 was US$438 million.

Source: VNS

Cambodia hosts meeting to discuss microfinance amid global financial crisis

With the helps from the International Financial Corporation (IFC) and the European Union (EU), Cambodia is hosting a conference to talk on how microfinance can boost country's economy, promote financial inclusion and enhance customer protection.

The IFC which is a member of the World Bank Group is helping Cambodian microfinance institutions to strengthen their contribution to the country's socio-economic development, and expand financial services to the rural population amid the global financial crisis.

The two-day meeting, which began Wednesday, participated by representatives from the Cambodia Microfinance Association, senior microfinanciers, bankers, regulators, and local authorities.

"The microfinance sector in Cambodia has grown fast and significantly contributed to improving access to financial services for the rural population," said Chea Chanto, governor of the National Bank of Cambodia.

"The success of the sector is vital to ensuring quick financial inclusion. We have adopted legislation that enables microfinance institutions to mobilize public deposits to help them access cheaper sources of funds while allowing rural populations to safely save their hard-earned cash," he said.

Participants also shared their views and experiences on how to respond to the global financial crisis, addressing credit culture, risk and nonperforming loan management, ethical debt collection practices, financial education, and consumer protection.

"The microfinance sector, which has loans of more than 280 million U.S. dollars outstanding to about one million clients in rural areas, already has felt the impact of the global financial crisis as no performing loans have increased from under one percent one year ago to 3.8 percent as of June 2009," said Huot Ieng Tong, president of Cambodia Microfinance Association.

IFC also works with individual microfinance institutions to help them diversify and focus their strategies, expanding their product range and improving their risk management capabilities.

"While the crisis has adversely affected microfinance institutions and their borrowers, it also brings opportunities for them to review their lending practices and risk and nonperforming loan management systems so they become more resilient to future crises," said Russell Muir, IFC Acting Head of Advisory Services for East Asia and Pacific.

Source:Xinhua

Holiday Villa to open 2 more hotels in Cambodia, China

HAVING made its presence felt in eight countries, Holiday Villa Hotels & Resorts, one of the leading hotel chains in Malaysia, expects to open two more properties in Cambodia and China by the end of the year.In a statement made available to Business Times, Holiday Villa, a member the public-listed Advance Synergy group, said two more properties were in the pipeline, namely in Sihanoukville, Cambodia, and Kaifeng in Henan, China.Holiday Villa opened its door to guests in Doha, Qatar, with the soft launch of the Holiday Villa Hotel and Residence City Centre on July 20.With the launch, Holiday Villa now operates 18 quality hotels and resorts with a total of 4,000 rooms and suites.
Besides Malaysia and Qatar, Holiday Villa Hotels and Resorts are located in the UK, Indonesia, Australia, Sudan, Cambodia, Vietnam and China. Early this year, the hotel group expanded to Halong Bay in Vietnam and Shenzhen in China.On its property in Doha, Holiday Villa said the hotel is strategically located at Al-Muntazah Signal, opposite the Muntazah Park.

Source: Business Times

Cambodia joins microloan clean-up

Cambodia joins microloan clean-upBy Stephen Kurczy PHNOM PENH - Impoverished Cambodia has emerged as a global microfinance leader, becoming the first Asian nation to hold lenders accountable to their original mission of poverty reduction. If a new global initiative aimed at promoting greater transparency over microfinance institutions (MFIs) recently launched here gains traction, the multi-billion dollar industry could be set for a shake-out. It has long been assumed that microfinance ventures, launched in the 1970s as non-profit enterprises to bring cheap credit to the poor, prioritize alleviating poverty over maximizing profits. In recent years, celebrities such Robert Duvall, Natalie Portman and Yeardley Smith, (the voice of Lisa in animated television series The Simpsons), became official spokespeople for different MFIs such as Pro Mujer (Pro Women), Finca International, and the Grameen Foundation.

The United Nations Capital Development Fund has in recent years channeled millions of dollars in donor funds into MFIs. The International Finance Corporation (IFC), the private lending arm of the World Bank, says it has given more than US$600 million to more than 100 MFIs worldwide and maintains a commitment to double that investment to $1.2 billion by 2010, making IFC the largest investor in an industry servicing more than 80 million people around the world. But so-called barefoot banking has come under growing criticism as MFIs reap huge profits. Reports have shown that many misrepresent their underlying loan fees, with some charging annual interest rates in excess of 100%. For instance, Mexico's Banco Compartamos, originally a non-profit institution, generated $458 million in an April 2008 initial public offering. Private investors piled into the offering because the bank charges its 1.4 million poor borrowers up to 128% annual interest. Chuck Waterfield, a microfinance expert and Columbia University professor, has found that many MFIs, including Compartamos, advertise as pro-poor enterprises with 4% monthly interest rates but when additional hidden fees were added those rates often topped 10% per month. Waterfield recently devised a platform for borrowers and international donors - who underwrite and provide cheap capital for many microcredit banks to on-lend - to view more clearly individual MFIs' true underlying interest rates. "Compartamos was a watershed for the industry. It takes a crisis to make you do what you should have done 10 years ago," Waterfield told Asia Times Online. In mid-2008, he launched MicroFinance Transparency, a database of interest rates charged by individual microlenders that aims through publicity to refocus microfinance on poverty alleviation. The goal, he says, is to collect loan information from all microcredit lenders worldwide and publish their real annual percentage rates at his website, mftransparency.org. "The organizations with the highest interest rates have the glossiest annual reports, with pictures of mothers with babies, and they talk about how they're helping those mothers while making boatloads of profits," Waterfield said on August 7 at a launch event in Phnom Penh. "So we put the prices up there and say, 'Nice annual report but you're charging twice the interest rate as anyone else to those mothers with babies'." Waterfield hopes that all MFIs will openly join the initiative and prove they have nothing to hide. He first introduced the project in March in Peru, then in Bosnia in April, and this month in Cambodia before heading to another launch in Bangladesh. He acknowledges that he can't force microcredit lenders, many of whom bury hidden costs in the small print of their loan forms, to sign up to the initiative. "We've got to build credibility and Cambodia helps us build credibility because it's a willing participant. The next country we go to will be a little less willing. And next year we'll go into the countries that are really reluctant to have us show up." People over profitsWhile Cambodia is renowned for its endemic corruption and is often rated among the world's least transparent countries, Waterfield said he chose the country as the first Asian nation for his initiative because its registered MFIs rank among the world's top in terms of social performance, consumer protection and ethical practices. Of the 12 Asian MFIs that have signed on to a social performance indicators program launched by the Washington DC-based Microfinance Information Exchange (MIX), a provider of MFI business information and data services, half hailed from Cambodia. Five Cambodian banks are also included in MIX's ranking of the world's top 100 MFIs; only India, with six, claims more. In June, Angkor Microfinance Kampuchea was one of three MFIs worldwide to receive the first gold award for social performance reporting from the Michael & Susan Dell Foundation, the Ford Foundation, and Consultative Group to Assist the Poor. "Cambodian MFIs have been at the forefront of industry reporting for many years," MIX's chief operating officer Blaine Stephens wrote in an e-mail in response to Asia Times Online questions. "My guess is that they will demonstrate as much commitment to reporting social performance as they have to reporting financial performance in an open and transparent manner." Cambodian MFIs charge interest based on 30- or 31-day months. This may sound intuitive, but in Mexico and other developing countries most MFIs charge interest rates based on a four-week month, which effectively allows them to charge the borrower for an extra month every calendar year, Waterfield said. The annual interest rates charged by MFIs in Cambodia are among the lowest worldwide at between 24% and 36%. While higher than normal rates on commercial consumer loans, microloans are inherently more expensive because the lender receives less return while incurring overheads and transaction costs similar to those for larger loans. "Here in Cambodia, we are committed to making sure that the financial services provided to the poor come as tools for their empowerment rather than shackles for their exploitation," Cambodian National Bank director general Tal Nay Im said on August 7. The National Bank has recently issued a legally binding sub-decree for MFIs to advertise their real effective interest rates. Cambodia is the only country to outlaw flat interest rate loans, a credit structure where monthly interest is paid on the total loan amount even as the borrower pays down the principal - which means the borrower is effectively paying interest on money already paid back. In comparison, every MFI in Mexico charges a flat rate and only one microcredit bank in impoverished Bangladesh, the Grameen Bank, charges borrowers a declining rate where they pay less and less interest as the outstanding amount owed is paid down. The Grameen Bank was founded in the 1970s by Muhammad Yunus, who was awarded the Nobel Peace Prize in 2006 and the US Presidential Medal for Freedom this week for his efforts to provide low interest loans to the poor. While many microcredit institutions claim to take inspiration from his example, Yunus has publicly lamented the industry trend towards profit maximization over uplift of the poor. He, for one, has strongly endorsed Waterfield's new Microfinance Transparency initiative. "Microfinance emerged as a struggle against loan sharks, so we don't want to see new loan sharks created in the name of microcredit," Yunus told BusinessWeek at the time of the project's launch. While Cambodia's 18 MFIs have agreed to submit their loan data to MicroFinance Transparency, the Bangladeshi government is drafting a law that will require all their MFIs to submit data to the initiative. In Bangladesh, banks do not at present advertise their true interest rates, Waterfield said, and there is the risk of a consumer backlash if published interest rates suddenly appear to double overnight. Leaky lendingNot all MFIs are equally excited about Waterfield's transparency initiative, particularly those whose reputation would take a hit through greater disclosure. One of mftransparency.org's features will show, in graphical form, the relationship between loan size and interest rates charged. That presentation will show more clearly where MFIs' priorities lie. Many MFIs had been so profitable that hedge funds, venture capital firms, and other big private equity investors have sought ways to enter the business. In Cambodia, private equity fund Leopard Capital announced in March that "we are currently evaluating several options to invest in the sector, including participating in any pre-IPO [initial public offering, or sale of shares to the public] capital raising by a leading MFI, acquiring an existing MFI or merging an existing MFI with a smaller commercial bank." Despite Cambodia's lead on MFI transparency, the sector has been facing financial troubles wrought by the global economic crisis. The industry-wide at-risk portfolio for the nation's 1 million microloan borrowers rose from 0.5% in mid-2008 to 3.39% in mid-2009. That's exposed flaws in previous client screening. Mai Yop, a 55-year-old salt farmer in southern Cambodia's Kampot province, admits to having lied to get a $1,000 loan three years ago from microfinance bank Acleda. While microloans are extended solely for business purposes, such as the provision of new cattle or farming tools, Mai Yop says she used the money to pay for her husband's stomach surgery. "I had to lie, or I wouldn't get any money," said Mai Yop, who now lives on a budget of $5 a day. In order to pay back her first loan, she took loans from two other microlenders, and finally from a high-interest charging informal moneylender who eventually seized her farmland due to non-payment. Some borrowers say they'd be in a better situation today if they'd never taken on a microloan. "We are poorer than ever," said Oum Siv, a 50-year-old grocery vendor in Kampot. Earlier this year, she said she owed $10,000 to a private moneylender after taking out a series of microcredit loans for her husband's construction business, which failed to get off the ground amid the economic slowdown. Cambodia's MFIs say they have since adopted more rigorous screening processes for potential borrowers. But the toll from years of lax screening has only now become apparent. The situation is similar in several Cambodian provinces, with tens of thousands of Cambodians unable to repay their microloans and now at risk of losing their homes and farmland. Despite these challenges, Waterfield said that Cambodia remains a relative microcredit success story. Elsewhere, when it comes to openness and transparency, "some of these [lenders] say, 'We've been lying for 20 years for some legitimate reasons, so it's not so easy to start telling the truth.' Here, it was like, 'sure, what do you need, we'll give it to you.' There was no resistance, no nervousness. We'll never see that again ... anywhere we go."

Source: Asia Times

Cambodia: A land up for sale?

Romam Fil is moving rapidly through a dense patch of forest. Every few metres he pauses and points to edible plants and roots that the Jarai people of north eastern Cambodia have relied on for generations.
Then suddenly the trees come to an end. In front of us is a vast clearing, the red earth churned up and dotted with tree stumps.
Beyond that, stretching as far as we can see is a rubber plantation, the young trees are still thin and spindly and sway gently in the breeze.
This is the scene of a battle the Jarai people of Kong Yu village have been fighting, and losing for the past five years.
It started when local officials called a meeting and said they needed some of the forest.
"They told us they wanted to give part of our land to disabled soldiers," said Mr Fil.
"They said if you don't give us the land, we'll take it. So we agreed to give them a small area, just 50 hectares."

The villagers say they were then invited to a party and when many of them were drunk they were asked to put their thumbprints on documents.
"Most of us don't know how to read or write, and the chiefs did not explain what the thumbprints were for," said Mr Fil.
The villagers later found they had signed away more than 400 hectares - and the land was not for disabled soldiers, but a private company who began making way for the rubber plantation.
"They cleared areas where our people had their farms, and they destroyed our burial ground," said Mr Fil.
Political connections?
Lawyers for the owner of the plantation company, a powerful businesswoman called Keat Kolney, insist she bought the land legally.

But groups advocating for local land rights in Cambodia say part of the reason she was able to acquire the land is because she is married to a senior official in the ministry of land management.
It is not the only case where those closely connected to senior government figures are alleged to have taken land from poor Cambodians.
Five years ago, in north-western Pursat province a large grazing area was turned into an economic land concession - land the government grants to private firms for investment in large-scale agriculture.
It was allocated to a politically well-connected company called Pheapimex.
"They just came one day with their bulldozers and started clearing the land straight away," said Chamran, a farmer in the area.
"So we organised a demonstration but then a grenade was thrown among us - we don't know who by. Nine people were injured. The military police pointed a gun in my stomach and said if you hold another demonstration we will kill you."
Transparent process
Under the law, land concessions granted by the government should not exceed 10,000 hectares but the Pheapimex concession, although much of it is so far inactive, covers 300,000 hectares.
Global Witness, an environmental pressure group, estimates Pheapimex now controls 7% of Cambodia's land area.

The organisation says the company's owners, a prominent senator and his wife, have strong links to Cambodian Prime Minister Hun Sen.
Pheapimex did not reply to requests for a response to these allegations, but the Cambodian government maintains that the process by which private companies acquire land is both transparent and legal.
"The requirement is not to be close to the prime minister," said Phay Siphan, spokesman for Cambodia's Council of Ministers.
"The requirement is that you have enough capital, you have the technology to develop the land."
'Kleptocratic state'
It is not just in rural areas that people complain of losing land.
Cambodia's recent stability, following decades of violence, has attracted a rapid boom in tourism and a race among foreign and local entrepreneurs for prime real estate on which to build new resorts.

Many of the country's beaches have already been bought up.
And rights groups estimate that 30,000 people have been forcibly evicted from their homes in the capital Phnom Penh over the past five years to make way for new developments.
The roots of the problem date back to the 1970s when the brutal Khmer Rouge regime abolished private property and destroyed many title documents.
A land law passed in 2001 recognises the rights of people who have lived on land without dispute for five years or more, but in many cases it is not being implemented.
The UN estimates hundreds of thousands of Cambodians are now affected by land disputes.

But land is not the only state asset being sold at an alarming rate.
Beginning in the 1990s, large swathes of the country's rich forests were bought up by logging companies.
Now sizeable mining and gas concessions are also being granted to private enterprises.
Eleanor Nichol of Global Witness believes individual members of the Cambodian government, right up to the highest levels, are benefiting.
"Essentially what we're dealing with here is a kleptocratic state which is using the country and its assets as their own personal slush fund," she said.
The Cambodian government rejects these allegations.
"They could accuse [the government of] anything they like. Cambodia operates under a modernised state of law. Everyone is together under one law,” said Phay Siphan.
Back in Kong Yu village, the Jarai people are waiting to hear the result of suit filed in a local court to try to get their land back.
"If the company gets the land, many of our people will starve," says Mr Fil.
"If we lose the land, we have lost everything.”

Assignment is broadcast on BBC World Service on Thursday at 0906 GMT and repeated at 1406 GMT, 1906 GMT, 2306 GMT and on Saturday at 1106 GMT.

Millicom to sell Cambodian operations

NEW YORK – Luxembourg-based wireless service provider Millicom International Cellular SA said Tuesday it agreed to sell its Cambodian operations to the Royal Group, its partner in Cambodia, for $346 million.
This transaction comprises Millicom's 58.4 percent holdings in CamGSM, Royal Telecam International and Cambodia Broadcasting Services, the company said.
The deal is expected to close before the end of the year.
Millicom provides cell phone service in developing regions in Asia, Africa and Latin America that have limited wireline infrastructure.

Investment in Cambodian tourism reaches $354 mln in half year

The investment in Cambodia's tourism reached to about 354 million U.S. dollars in the first six months of this year and is a leading field that got the most investment, the local media said on Tuesday.
"Council for Development of Cambodia (CDC) approved about 1.22 billion U.S. dollars investment projects totally from private companies and 354 million U.S. dollars of the total is on tourism investment project," the khmer language newspaper Rasmei Kampuchea quoted the document from CDC as saying.
Agricultural field stands second row after tourism with 323 million U.S. dollars and next field is industry with 303 million U.S. dollars.
In total, Cambodia received 53 investment projects for the first half year and tourism field attracted seven projects, while agri-industry has 12 projects, garment industry with 14 projects and three in energy projects.
If we consider on the projects for the first six month of this year, it increases four projects but the investment capital went down about 3.2 billion U.S. dollars compared with the same period of last year, it said, adding that for first six month of last year, Cambodia yielded with 49 investment projects with about 4.43billion U.S. dollar.

Source: Xinhua

Downturn pushes exporters to eye Cambodia

As the wheels of Vietnam’s export machine to the U.S. and Europe begin to slow, local shippers are turning their attention to the often overlooked neighboring market of Cambodia.

Nguyen Thi Hong, deputy chairwoman of the Ho Chi Minh City’s People’s Committee, told Sai Gon Giai Phong (Sai Gon Liberated) newspaper, the city’s total export turnover last month fell by 13.9 percent from the same period last year.
But it was a very different story in impoverished Cambodia. During the same stretch, exports from Vietnam soared 44 percent over July last year, she said.
Cambodia, home to 14 million people and one of Southeast Asia’s poorest countries recorded average economic growth of ten percent from 2004 to 2008. Much of that progress can be tracked back to the UN-backed Paris Peace Accord between the government and Khmer Rouge in 1994.
The country has opened up a great deal since then and today the free market is king.
Between Vietnam and Cambodia - which have often had a turbulent relationship - two-way trade has risen on average by 40 percent annually over the past few years, from US$935 million in 2006 to $1.2 billion in 2007 and nearly $1.7 billion in 2008.
Made-in-Vietnam goods have also gained a foothold in Cambodia through fairs and trade events held in the country.
About three years ago, Vietnam was the third largest exporter to Cambodia after China and Thailand. At present, Vietnamese exporters are offering a wide range of products in Cambodia, from construction materials to consumer goods and household appliances.
Tran Huu Duc, public relations director of Vietnamese food producer Dong Tam Nutrition Food Joint-stock Co. (Nutifood), said his company’s dairy products for the elderly are hugely popular in the country.
But in a possible case of the chickens coming home to roost, most Vietnamese exporters are still unable to gain a better foothold in the market as distribution networks in the country are firmly in the hands of Cambodian firms.
Red tape and fierce competition from Chinese and Thai imports are also among the obstacles for Vietnamese businesses to further explore the neighboring market.
Ho Chi Minh City-based multi-service Saigon Trading Group (SATRA) is working on a plan to build a duty free supermarket chain at the Moc Bai and Tinh Bien border gates between the two countries, Hong said.
A number of warehouses designed for Vietnamese goods will also be set up at Vietnam-Cambodia border gates to help Vietnamese exporters save transportation costs.
Satra is also teaming up with Cambodian business conglomerate Sokimex Group to build a supermarket for Vietnamese products in the country and provide Cambodian language courses for Vietnamese businessmen.

source: Sai Gon Giai Phong Newspaper

Cambodia expects garment exports to drop 30 per cent in 2009

Phnom Penh - The Cambodian government expects garment exports will decline by at least 30 per cent this year due mainly to lower demand in the key US market, local media reported Wednesday. "It is clear that this year's garment exports will drop at least 30 per cent because consumers in the United States have cut purchases," Mean Sophea, the head of the Ministry of Commerce's trade preferences department, told The Phnom Penh Post.

Earlier this year the government said it expected garment exports to drop just 5 per cent in 2009.

However, trade union president Chea Mony predicted that exports would fall even further.

"We are concerned that the situation of Cambodia's garment exports will deteriorate even further than that predicted by the [ministry] unless the government can get rid of rampant corruption in the garment sector," said Chea Mony.

Garments are Cambodia's key foreign exchange earner, generating 3.1 billion US dollars last year. Most garments are exported to the US market and the European Union.

Firms go hi-tech into Cambodian market

VietNamNet Bridge – Vietnamese companies are taking advantage of business opportunities in Cambodia with the transfer of advanced technology, particularly in the agricultural sector.
Nguyen Tran Trung Nam from An Giang Plant Protection JSC's representative office in HCM City said that the company started transferring agricultural technologies to Cambodia in 2002.
"The technical transfer with a focus on opening training courses for Cambodian agricultural experts and farmers will help our company to better introduce our products, establish our networks in order to enhance our presence in the country," Nam said.
"This move also helps us to explore more business opportunities here," he said, adding that the company plans to open a ten-day training course for Cambodian technicians in the southern An Giang province next month.
Chairman of the Institute of Agricultural Science for Southern Viet Nam Bui Chi Buu agreed that untapped business opportunities existed in the Cambodian market and that technical transfer was an effective method for firms to better take advantage of these chances.
Cambodia is the third largest export market to Viet Nam after Thailand and China.
The country plans to raise trade turnover with Cambodia to US$2.45 billion by 2010.
In 2008, Viet Nam earned $1.43 billion from exports to Cambodia, a year-on-year increase of 50 per cent.
Major exports from Viet Nam to Cambodia include fuel, steel, instant noodles, plastic products, fertiliser, materials for the textile and garment sector, cosmetics and detergents.
Many Vietnamese enterprises have set up representative offices and shops in the country.
However, the Vietnamese Trade Mission to Cambodia said that few Vietnamese businesses have long-term plans for developing this market.

Source: VietNamNet/Viet Nam News

Cambodia rejects landmine beauty contest

The Cambodian government has urged the cancellation of a beauty pageant in which landmine victims will compete to win a prosthetic leg, organisers say.
In the Miss Landmine Cambodia contest, 20 competitors from around the country are due to appear in a photo exhibition opening on Friday in Phnom Penh, followed by an internet voting campaign to select the best candidate.
But in a letter to organisers, the Ministry of Social Affairs has called on them to cancel the contest - although the Cambodian Mine Action Authority said in 2007 it fully supported the event.
"The ministry asks the people who organise this contest to stop this action ... for protecting ... the honour and dignity of people with disabilities," the letter said in English.
But Norwegian pageant director Morten Traavik said the contest, which offers as the top prize a custom-made prosthetic leg, would increase awareness about the victims of landmines.
"I have asked to meet the Cambodian officials to clear up our misunderstanding, and I hope once they know about our project details, they will welcome this," he said.
He explained that the pageant aimed "to raise awareness of what landmines have done to the people", adding that it would be a "big shame" if people could not see the exhibition.
The first Miss Landmine contest was held in Angola last year, drawing protests from rights activists who viewed it as exploitative and racist.
Cambodia remains one of the world's most heavily mined countries, along with Afghanistan and Angola.
Hundreds of people are killed or maimed every year by the millions of landmines and other unexploded ordnance still littering the countryside after decades of conflict.
Cambodian Prime Minister Hun Sen cancelled a Miss Cambodia beauty pageant in 2006, saying he would not allow such a contest until poverty in Cambodia was reduced by more than half.

Source: AFP

Cambodia, Vietnam to step up inspectorate cooperation

Increased cooperation between the government inspectorates of Vietnam and Cambodia would help the latter upgrade its system from central to local levels, said a Cambodian official.
This would in turn contribute to the successful implementation of the second phase of Cambodia’s 2006- 2010 economic development strategy, Minister of National Assembly-Senate Relations and Inspection Sam Kim Suor said while receiving a delegation led by Vietnamese Inspectorate General headed by Vice Inspector General Nguyen Van San in Phnom Penh Wednesday.
The Cambodian minister spoke highly of the practical assistance that the Vietnamese Inspectorate General has given to its Cambodian counterpart, especially in human resources training.
Both parties briefed each other on the political and economic situation in their respective nations, exchanged information on the role inspectors play in helping the government deal with complaints from citizens, and discussed measures to enhance bilateral cooperation between both countries’ inspectorates.

Source: VOV

Germany injects over $1 mln to Cambodia, Laos for fighting against hunger

Fearing with the continued impact by global economic crisis, the government of Germany has provided another 1.3 million euros (approximately 1.8 million U.S. dollars) to Cambodia and Laos to fight against hunger. In a statement released Wednesday, German embassy in Phnom Penh said of the above total amount, one million euro was destined for Cambodia which is expected to help assist about one million Cambodians in 2009. It said the fund was donated through the United Nations agency, World Food Program for its operation in this country. The fund will help improve immediate food security and nutritional status of the Cambodian people while enhancing social stability through interventions in three priority areas: education, health and nutrition, and disaster risk reduction. In April, the U.N. Office in Cambodia issued a statement saying the country's positive trends of its economy will be slowdown after it has enjoyed over decade of increase. And less demand from foreign markets and reducing of foreign direct investment have forced a mass of people losing their jobs, such as in garment and construction sectors. The U.N. data also indicated some 80 percent of Cambodians are living in rural areas, and where many poor families depend upon migrant remittances as their major source of income. It is, then, citing fear that Cambodia's rural poor might adopt "unhealthy" coping measures such as reducing their number of meals per day or eating less-nutritious foods, and cutting back on health services. Safety nets in health, education, food, and work can help break the poverty cycle, it added in the statement. According to the World Food Program, Cambodia might need 76.3 million U.S. dollars for three years project in curbing with people in crisis. It said the project that began in January 2008 and which is due to last until the end of 2010 has, so far, received 33 million U.S. dollars or bout 43 percent of its appeal, and that Germany has donated 2.3 million U.S. dollars or 3.1 percent of the total donated fund.

Source: Xinhua

Thai Cabinet OKs THB1.4 Billion Financial Aid For Cambodia Road Project

The Thai Cabinet Tuesday approved a THB1.4 billion ($ 41.2 million) budget to provide financial assistance to Cambodia for its road development project.
The 30-year soft loan will charge interest at 1.5%, with the principal being repaid from 2019 onward, a government spokesman told reporters after a weekly cabinet meeting.
The project is expected to boost traffic volume between the two countries in both tourism and logistics.

Source: Dowjone