CAF at CSAJ December 21th, 2008

Every year in December, there is an election of president for Cambodian Students Association in Japan (CSAJ). In 2008, the election was held on December 21th, 2008 and Mr. Ear Chariya was elected to be the new president of CSAJ committee 2009. On the day, after the election was finished, CSAJ committee has prepared an Cambodian Academic Forum which we invited guest speaker to give speech at the forum on whatever topic regarding Cambodia. This time, we have the honor of Mr. Okubo, the president of Cambodia International Education Support Foundation (CIESF), to be our guest speaker. At CAF, Mr. Okubo has discussed about the education in Cambodia and has also explained of CIESF activities in Cambodia. For those who are interested in Mr. Okubo speech at CAF, please refer to the following site to access to video took during CAF. The speech is available in Japanese with Khmer interpretation.

http://www.csaj-khmer.org/newsite/index.php?option=com_content&view=article&id=133%3Avideo-of-last-cambodian-academic-forum-for-year-2008&catid=1%3Alatest-news&Itemid=142&lang=en&showall=1

Do you know what is JENESYS?

JENESYS stands for Japan East-Asia Network of Exchange for Students and Youths. This program has been created under the initiative of Mr. Shinzo Abe, a former Prime Minister of Japan announce at the 2nd East Asia Summit(EAS) on 15th of January, 2007. Japan would provide financial assistance amounting to approximately US$315 million for the East-Asia Youth Exchange, inviting approximately 6000 youths/year for 5 years.
The objective of this programme is to form a basis of future vision and construct firm solidarity among Asian Countries through the programme, which will promote mutual understanding of the future generation of ASEAN and East-Asia Summit member countries.
Under this scheme, so far 150 Cambodian high school students have been invited to visit Japan for 10 days which is divided into 3 batchs.

JENESYS, Cambodia 2nd batch

I have worked as a cordinator at Japan International Coorporation Center(JICE) to translate and manage for trip for the youths from Cambodia during their stays in Japan.

Interview by Intec Japan

I was asked for an interview by Intec Japan, and below is the site that was written about me. For those who are interested please visit the site.

http://www.intecjapan.com/abroad2/2008/08/post_6.html

Congratulation! Preah Vihear was listed as UNESCO World Heritage Site

Preah Vihear was listed as UNESCO World Heritage site on July 7, 2008. The temple situated in Dangrek Mountains in Preah Vihear Province. In 1962, following a serious dispute between Thailand and Cambodia over the ownership of the temple, the International Court of Justice in Hargue ruled that it belongs to Cambodia. Preah Vihear is unusual among Khmer temples in being constructed along a long north-south axis, rather than having the conventional rectangular plan with orientation toward the east.

Interview at 「Discover Japan」Radio Program

Today, I received an email from my Japanese friend who asked me to help her in interviewing Ms. Meas Sosophea when she came to Japan for MEKONG CONCERT in May 2008. I was working as volunteer to interview Ms. Sok Sophea about her feeling after arriving at Japan. Please refer to the following site for the content of the interview:
http://blogs.yahoo.co.jp/radio_css

The Development of Securities Market in Cambodia

Cambodia inteded to establish its securities or stock market in 1995, but due to the weak banking system which cannot effectively complement the establishment of this market, the government of Cambodia postponed the project and reset the year 2009 as the starting year of the securities market.

What are the benefits for Cambodia from the development of the securities market?

Answer:
- In addition to bank deposits which are basically held on short term basis, capital market will increase the mobilization of savings, by providing an array of attractive saving instruments, which can be used for financing long term investments. Capital market also provides a convenient mechanism for channeling foreign savings into portfolio investment. At present Cambodia can only attract FDI since capital market and associated securities exchange infrastructure do not exist yet. Foreign portfolio investment will become a possibility once the securities exchange is established and rules are framed for foreigners to invest in Cambodia securities onshore.
- It will lead to a more rational allocation of resources because funds, which would otherwise be spent on consumption, or kept in idle demand deposits with banks, are mobilized and redirected to promote productive business activities;
- Investors are usually reluctant to participate in long-term investment projects, even those with high return. With a capital market, investors can stay liquid while investing long term;
- Securities market improves corporate governance through information disclosure requirements which ensure better management standards and efficiency;
- Public companies owned by a multiple of stocks holders through the stock exchange and subject to regulation tend to have better management records than privately-held companies;
- Companies can require other companies through the securities market for expanding product line and market share, increasing distribution channels, hedging against volatility, and acquire other necessary business assets;

Securities exchange will provide a marketplace that:
- Enhance the liquidity of securities and promotes fair trading prices that reflect the relative strength of supply and demand. With this function, investors can invest in securities with full information and enterprises can raise funds smoothly by issuing securities;
- Published market clearing prices will be the correct indicators of company performance on a rational basis and can be used for assessing the collateral value or the asset value of underlying securities.

For investors of listed securities, the advantages are the following:
- Opportunity to buy and sell securities at market determined, fair price;
- More choices of saving instruments;
- Participation in ownership of a company satisfying strict corporate governance norms;
- Higher trust and higher name value;
- The market value of the securities can be used with more assurance as an indicator of the underlying corporate value;
- The securities of listed companies can be used as currency in Merging and Acquisition dealings.

Phases of Capital market development in Cambodia:
The capital market development plan under the strategy consists of three sequenced development phases as discuss below:
Phase 1 (2006-2009): Comprising
- Enactment of Law on Government Securities. This was accomplished on 10 January 2007. Ministry of Economy and Finance is preparing the sub-decree and Prakas under the law;
- Operation of government securities market should precede the establishment of a private securities market. This will help gain public investor confidence and get the investors to familiarize themselves with the functioning of the securities market.
- Development of appropriate regulatory framework relating to insolvency, and the progressive company framework;
- Enactment of Law on Issuance and Trading of Non-Government Securities. The law was adopted in 2007;
- Continuing improvement of accounting/auditing capacity;
- Implementing the MOU with Korean Exchange (KRX);
- Training to raise public awareness, investor education and human resource development to support financial market development

Phase 2 (2009-2012): Comprising
- Implementing progressive, graduated framework for companies;
- Launch of the Cambodia Securities Exchange in 2009;
- Opening a securities depository in the CSE for all public companies in operation and a public company registration authority;
- Implementation of rules on Financial governance and regulation;
- Continuing development of financial information and company regulation;
- Ensuring that public offering of securities will be permitted only through the securities exchange
- Design of investor compensation scheme to address risks of failure of securities intermediaries holding client assets

Phase 3 (2012-2015): Comprising
- Development of investment funds;
- Development of pensions/provident funds scheme;
- Development of securitization framework/institution;
- Development of derivative market;
- Provide tax incentives to attract investors in government securities

Top 10 Economic News of Cambodia in 2007

According to Xinhua, the major local Chinese-language newspaper highlighted the Top 10 Economic News of Cambodia in 2007 and outlined the robust pulse of the kingdom's economic vibration.

On top of the chart was the signing of the single visa agreement between Cambodia and Thailand on Dec. 17, which allowed foreign tourists from a third country to visit the two countries with a single visa and thus promoted more foreign tourists to visit both countries.

Second, Cambodia re-opened its Sihanoukville International airport on Jan. 15, after more than 20 years of hiatus, in order to perfect its air traffic network and attract more travelers to the seaport city.


Third, the kingdom started to construct its National Road No. 8on March 15, which, upon its completion, will improve the country's road network and provide more choices for its outgoing people.

Fourth, the National Assembly on Dec. 3 approved the government accounts settlement for 2005, which had 89.2 million U.S. dollars in surplus and confirmed its successful economic reform.


Fifth, the Special Economic Zone of Sihanoukville began to be constructed in 2007 with the participation of Chinese investors. The project aimed to provide full-scale business service for export-oriented factories and companies.

Sixth, real estate prices in Phnom Penh surged drastically in 2007, as it inhabitants increased by 3.2 percent on annual basis and foreign investment rushed in to share the country's foreseeable economic boom in the near future.

Seventh, Cambodian has become the sixth largest garment exporter in the world. The industry created job opportunities for about 0.5 million Cambodians and generated some 0.3 billion U.S. dollars of monthly payment for the employees.

Eighth, maiden direct flight between Europe and Cambodia was made on Dec. 7, which would bring more tourists to the kingdom.

Ninth, agricultural exports flourished in 2007, as palm oil, peanuts, rice, pepper and other rural products became ever more popular in the international markets.

Finally, luxury real estate project the Longqing Resort in Kandal province was demolished on July 31, as it expanded its land illegally and in effect constituted menace to the safety of the capital city.

Earlier in November, the Asia Development Bank put Cambodia's economic growth rate for the current year at 9.5 percent and nine percent in 2008, while the Cambodian government gave a conservative estimation of seven percent both in 2007 and 2008.

In addition, the latest World Bank East Asia and Pacific Update said in November that despite slight decline, Cambodia's economic outlook for 2008 will remain strong overall, with its growth rate dropping from 9.5 percent in 2007 to 7.5 percent in 2008.

According to official figures, the economic growth rate of the kingdom in the past three years averaged 11 percent, by which the government said that macro-economic stability has been realized out of decades of war and turmoil.

Cambodia Economic Growth and Rich-Poor Disparity

Although Cambodia has achieved a high economic growth and macroeconomic stability in this decade, the gap between the rich and the poor in urban and rural areas is remaining high or even getting wider and wider. To reduce this gap and inequality, the Government of Cambodia has undertaken various reforms in the economic and financial sector such as Public Financial Management Reform Program, Financial Sector Development Strategy 2006-2015, and strengthening the partnership with the develoment partners on harmonization, alignment and result.

In my opinion, by drawing lessons from overseas, Cambodia should enhance and give priority to reform of its taxation system, social security and more support for rural areas to adjust income disparity. The government should focus on policies that lift the incomes of the poor, such as improving rural access to health, education and social protection. More investment in rural infrastructure could also boost productivity in farming and increase job opportunities for the poor. In addition, other measures should also be taken such as building a framework for helping the poor and those unemployed.

In the report "Sharing Growth:Equity and Development in Cambodia", World Bank suggests a number of policies priorities for Cambodia to narrow the gap and inequality:

1.There is a need for continued effort in economic reform and improvement of investment climate. Maintaining the economy’s openness and global outlook will be the best strategy for continued growth and sustained poverty reduction.

2. Priority in land policy should be to accelerate and intensify systemic titling, extending it throughout the country, including to remote, more conflict-prone areas. Land policies within the agricultural strategy should give priority consideration to household farming, including by redistributing idle plantation land to landless poor households.

3. More needs to be invested in building and then maintaining basic infrastructure to connect up remoter parts of the country to economic opportunities and improved social services. Rural roads clearly have a significant impact in equalizing geographical inequalities. There is also a pressing need for increased investment in improved water supply and sanitation in rural areas: the rural-urban gap in access to these facilities remains extremely wide.

Here you can read the full World Bank Report: "Sharing Growth: Equity and Development in Cambodia":

http://siteresources.worldbank.org/INTCAMBODIA/Resources/293755-1181597206916/Full-Report-E&D.pdf

Japan and Cambodia Investment Agreement

Even Japan is the Cambodia's largest donor, Japan is not ranked among Cambodia's top ten foreign investment countries. According to the official statistics of Japan-ASEAN Center, in 2006 Cambodia attracted US$ 2.33 billion of agreement-bound foreign direct investment (S. Korea US$1,010m; China US$717m, Russia US$277m, Thailand US$100m; USA US$32m; Taiwan US$47m; Belgium US$33m; Vietnam US$31m; Malaysia US$28m; Singapore US$11m; Cananda US$5m; Hong Kong US$4m, UK US$3.5; and JAPAN US$2m.)

However, since the official visit of Prime Minister Hun Sen to Japan in June 2007 and an investment protection agreement was signed by the two countries' leaders, more and more Japanese investment projects such as bank, hotel resort, mansion construction, trade company and island development have increased gradually in Cambodia. I believe the Japan's investment will additionally bolster the domestic capital, productivity, trade, employment and skills, technology diffusion and knowledge transfer which are crucial to Cambodia's further economic growth.

Please click the URL below to read the Agrrement Between Japan and The Kingdom of Cambodia for the Liberalization, Promotion and Protection of Investment:

http://www.kh.emb-japan.go.jp/political/nikokukan/invest-agree.pdf

New Year's Eve at the Royal Embassy of Cambodia

Last evening I really had a wonderful New Year's Eve Party at the Royal Embassy of Cambodia in Japan together with the Embassy's officers, Cambodian students as well as eminent guests invited by H.E. Pou Sothirak, including Professor Yukio Imagawa (former Japanese Ambassador to Cambodia, is now a professor at Kanto Gakuen University); Ms. Sumiko Imagawa (Vice-president of Japan Team of Young Human Power); Dr. Vong Sam Ang (Director, Investment Division of Asean-Japan Center); Dr. Sorpong Peou (Professor of Sophia University), etc.

It is my first time to become aware of the wonderful activities of Japan Team of Young Human Power (JHP) after talking with Ms. Sumiko. So far, JHP has been building and renovating 199 schools in Cambodia and offers educational support and other voluteer-based activities. (http://www.jhp.or.jp/refer/construction03.htm)

As you may know, a long period of civil war had left Cambodia with lack of schools, and more seriously, the children rarely go to school as they have to work to support their family espcially 67% of them are engaging in farming. So I believe all of these donations will strongly contribute to the bright future of Cambodian children.