News / Asia

    Cambodia Pins Economic Hopes on AEC

    FILE - Farmers plant rice in Samroang Teav village on the outskirts of Phnom Penh, Cambodia, Aug. 23, 2015. Cambodians are expecting a 'seamless transition' when the ASEAN Economic Community (AEC) is launched in two months and hopefully heralds a second investment wave, capable of transforming this country's pool of unskilled labor into a manufacturing hub.
    FILE - Farmers plant rice in Samroang Teav village on the outskirts of Phnom Penh, Cambodia, Aug. 23, 2015. Cambodians are expecting a 'seamless transition' when the ASEAN Economic Community (AEC) is launched in two months and hopefully heralds a second investment wave, capable of transforming this country's pool of unskilled labor into a manufacturing hub.
    Luke Hunt

    Cambodians are expecting a 'seamless transition' when the ASEAN Economic Community (AEC) is launched in two months and hopefully heralds a second investment wave, capable of transforming this country's pool of unskilled labor into a manufacturing hub.

    The first investment wave followed Cambodia's ascension to the World Trade Organization (WTO) in 2004 and gave this country's hopelessly war ­torn and almost nonexistent economy a lift with the garment and tourism industries, and big spending on infrastructure that followed.

    Sok Siphana, a senior government advisor, said neighboring countries Thailand and Vietnam would continue to be the big producers of cars and white goods, but Cambodia would get its chance to emerge as a key manufacturer of smaller components and parts like electrical harnesses.

    “I think for Cambodia the economy is already wide open, as a matter of fact. Since we acceded to the WTO, we made tremendous economic liberalization already, so to me the AEC is a welcoming sign of a second wave of investment that will come to the country,” he said.

    Foreign investors

    This, Sok Siphana added, would lead to further investment in Special Economic Zones (SEZ) with foreign investors taking advantage of a unique Cambodian law, which allows them to own 100 percent of their in­country companies.

    That compares with a maximum 70 percent foreign ownership elsewhere in the AEC.

    “With the AEC, Cambodia will be a gateway not to 15 million people – 600 million people­­ and geographically as you can see we are right in the subcontinental greater Mekong sub­region between two major markets; Vietnam and Thailand," he said. “And with the bridge over the Mekong, now we are part of the supply chain.”

    Infrastructure upgrade

    Cambodia, and in particular Chinese and Japanese donors, have spent huge sums on dual lane carriageways, bridges, port expansions and rail networks to take advantage of its strategic position within the trading bloc of 610 million people.

    Pivotal is the 2.2 kilometer bridge at Neak Loeung, completed just six month ago. The $130 million project across the mainstream of the Mekong River ended the need for ferries while substantially reducing travel times between Phnom Penh and Ho Chi Minh City.​

    FILE - Cambodia's longest bridge is seen under construction before it is inaugurated in Neak Loeung, southeast of Phnom Penh, Jan. 14, 2015.
    FILE - Cambodia's longest bridge is seen under construction before it is inaugurated in Neak Loeung, southeast of Phnom Penh, Jan. 14, 2015.

    Trade barriers

    At the broader bureaucratic level, the AEC will harmonize laws and remove barriers on cross-border trade for the 10 countries within the Association of South East Asian Nations (ASEAN) from January 1 next year. ASEAN would be the world's seventh largest economy, if a country, with a GDP of $2.4 trillion.

    Eight professions -­­ doctors, nurses, dentists, engineering, architects, surveying, accountancy and tourism - will lead ASEAN into its free trade zone. Cambodia was expected to do well with tourism, but lag in others, particularly where internationally recognized skills are required.

    Cambodia-based American lawyer Brett Sciaroni said extra spending on education and vocational training would bridge that gap over the medium to longer term, while laws needed to be amended to attract foreign investors and improve the standing SEZs within the bloc.

    “We have always touted Cambodia as being a key country in the region and as the infrastructure projects continue on the road networks, the railways and so on we'll become more central and more critical for the transit of goods and people,” he said.

    “Diversification of our economy is critical and I think that we need to make the jump from the garment sector being so dominant to light manufacturing which is happening to an extent today but with a new law on investment and a new SEZ law I think it can be a lot better.”

    Regional trade blocs

    Sciaroni and Sok Siphana said the major fear for the Cambodian economy over the longer term is rival trade blocs, in particular the Trans Pacific Partnership (TPP) with the likes of the U.S., Vietnam and Malaysia as members, but not Cambodia, Thailand, Laos or China.

    “I think the real danger for Cambodia in the out years are the other trade agreements going on like the Trans Pacific Partnership where we're not included but some of our neighbors are, so I think countries like Vietnam will get a boost from TPP and I think that we need to take a closer look at some of these other regional trade agreements,” said Sciaroni.

    Other benefits were also expected to follow the AEC launch. Independent political analyst Ou Virak said fewer border restrictions, the freer movement of people and improved job opportunities should cut back demand for human traffickers and people smugglers, and help push them out of business.

    You May Like

    Russia Sees Brexit Impact Widespread but Temporary

    Officials, citizens react to Britain’s vote to exit European Union with mix of pleasure, understanding and concern

    Obama Encourages Entrepreneurs to Seek Global Interconnection

    President tells entrepreneurs at global summit at Stanford University to find mentors, push ahead with new ideas on day after Britain voters decide to exit EU

    Video Some US Gun Owners Support Gun Control

    Defying the stereotype, Dave Makings says he'd give up his assault rifle for a comprehensive program to reduce gun violence

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Brexit Vote Plunges Global Markets Into Unchartered Territoryi
    X
    June 24, 2016 9:38 PM
    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Brexit Vote Plunges Global Markets Into Unchartered Territory

    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Experts: Very Few Killed in US Gun Violence Are Victims of Mass Shootings

    The deadly shooting at a Florida nightclub has reignited the debate in the U.S. over gun control. Although Congress doesn't provide government health agencies funds to study gun violence, public health experts say private research has helped them learn some things about the issue. VOA's Carol Pearson reports.
    Video

    Video Trump Unleashes Broadside Against Clinton to Try to Ease GOP Doubts

    Recent public opinion polls show Republican Donald Trump slipping behind Democrat Hillary Clinton in the presidential election matchup for November. Trump trails her both in fundraising and campaign organization, but he's intensifying his attacks on the former secretary of state. VOA National Correspondent Jim Malone reports.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.
    Video

    Video Internal Rifts Over Syria Policy Could Be Headache for Next US President

    With the Obama administration showing little outward enthusiasm for adopting a more robust Syria policy, there is a strong likelihood that the internal discontent expressed by State Department employees will roll over to the next administration. VOA State Department correspondent Pam Dockins reports.
    Video

    Video Senegal to Park Colorful ‘Cars Rapide’ Permanently

    Brightly painted cars rapide are a hallmark of Dakar, offering residents a cheap way to get around the capital city since 1976. But the privately owned minibuses are scheduled to be parked for good in late 2018, as Ricci Shryock reports for VOA.
    Video

    Video Florida Gets $1 Million in Emergency Government Funding for Orlando

    The U.S. government has granted $1 million in emergency funding to the state of Florida to cover the costs linked to the June 12 massacre in Orlando. U.S. Attorney General Loretta Lynch announced the grant Tuesday in Orlando, where she met with survivors of the shooting attack that killed 49 people. Zlatica Hoke reports.
    Video

    Video How to Print Impossible Shapes with Metal

    3-D printing with metals is rapidly becoming more advanced. As printers become more affordable, the industry is partnering with universities to refine processes for manufacturing previously impossible things. A new 3-D printing lab aims to bring the new technology closer to everyday use. VOA's George Putic reports.
    Video

    Video Big Somali Community in Minnesota Observes Muslim Religious Feast

    Ramadan is widely observed in the north central US state of Minnesota, which a large Muslim community calls home. VOA Somali service reporter Mohmud Masadde files this report from Minneapolis, the state's biggest city.

    Special Report

    Adrift The Invisible African Diaspora