Address at the Closing of 2010 Stocktaking and 2011 Direction Setting Conference of the Ministry of Commerce

Phnom Penh, February 9, 2011

Excellencies, Ladies and Gentlemen!

Today, it is my pleasure to participate in the closing of “2010 Stocktaking and 2011 Direction Setting Conference of the Ministry of Commerce”. I believe the workshop is a good opportunity for collecting ideas, comments and experiences from all the participants in order to fine-tune our future plan and direction. On behalf of the Royal Government, I congratulate the Ministry of Commerce on their marvelous achievement made in 2010. In general, the achievement made during the past year is in line with the Rectangular Strategy Phase II which strives for growth, employment, equity and efficiency.

The stocktaking conference is indeed an important component that allows us to jointly review the performance and policy implementation in this sector as outlined within the framework of the national strategic development plan which regards trade as a source of growth. Drawing on this policy vision, the Royal Government has been working hard on reform inside and outside of the sector, including local infrastructure, production, industry and human resource as well as strengthening of international cooperation and global integration to ensure a sustained growth. In particular, thanks to our effort, international trade has generally increased. In 2010, international trade stood at USD 10 billion, an increase of 6.8% compared to 2009, albeit the global financial and economic crisis. The 2010 exports within the preferential treatment framework increased from USD 2.6 billion in 2009 to USD 3.3 billion in 2010, a rise of 27%.

Along with this, last year’s trade contributed roughly to 5% of growth. Inflation was contained at 4% in 2010, compared with 5.3% in 2009. Cambodia’s international reserves increased from USD 2,376 million in 2009 to USD 2,650 million in 2010. In particular, we expect our economy to grow by 6% in 2011 as our key sectors including manufacturing, garment, agriculture, tourism and construction have started to retake off. The currently rebounding manufacturing sector, especially the garment, absorbs around 376,000 work forces. The total figure of workers’ wage in 2010 was USD 372 million, compared to USD 25.7 million per month in 2006. This indicates that trade activities have played an important role in accelerating growth.

In this spirit, I would like to further encourage the management and all officials of the Ministry of Commerce to keep on implementing trade facilitation, especially negotiating with some developed countries to remove tariff and non-tariff barriers for exports from Cambodia. Along with this, the Royal Government will do its utmost to ensure political stability, peace and security that are the pre-requisites for realizing the full potential of its socio-economic development.

Excellencies, Ladies and Gentlemen!

As I have previously raised, our greatest challenge is to find and open the market for our agricultural, agro-industrial and industrial products as most countries are fiercely competing to export their own products. In this sense, obtaining low tariff treatment from developed countries for our exports is not adequate. We must not only implement practical measures to facilitate exports such as reducing the time request for goods inspection, the joint inspection by the Customs and Excise General Department, and the CAMCONTROL and reducing the inspection time of goods but we must also improve the export capacity and production ability in order to gain competitive advantage.

In fact, I have mentioned before that in order to speed up the development of Cambodia’s commerce sector we have to focus on diversification of markets especially markets for farmers’ yields. Because Cambodia has high potential in agricultural production and needs to continue promoting and attracting investors to invest in Cambodia, especially in agriculture sector and factories using agricultural yields as inputs so that we can increase our competitive advantage in business sector with high potential. Parallel to this, we have to find a measure to obtain Generalized System of Preference (GPS) for Cambodia, continue integrating and deepening Cambodia’s economy extensively into the region and the world in order to maximize the use of Cambodia’s membership in the World Trade Organization (WTO). It is very true that all these tasks requires us together to continue taking further care of because all these factors provide not only ability to Cambodia to compete on international markets but also incentives for innovative productions serving exports market, which is our priority.

In this spirit, in addition to what we have been implementing, and supporting what H.E. Deputy Prime Minister Keat Chhon, Minister of Economy and Finance has brought up and encouraged the workshop to thoroughly discuss in the opening of the workshop on February 7th 2011, with the aim to continue encouraging the development of national and international commerce sector, I would like to take this opportunity to provide some recommendations as followed:

1. Continue promoting the use of system of preferential commerce. The maximum use of imports tariff preferential markets is a key factor for continuing the promotion of Cambodia’s commerce and economic growth. Indeed, Cambodia has already received imports tariff preferential from developed and developing countries for many hundreds of Cambodia’s farmers’ yields such as the United States of America, the EU, Canada, Japan, Australia, China, Korea etc. together with imports tariff preferential market that we have obtained from cooperation in ASEAN region and ASEAN partners as well. Through this Ministry of Commerce has to work hard continuing promotion and encouraging exports of all goods with high effectiveness and efficiency. For that we have to ensure and promote extensive opening of current Cambodia’s market especially American and European markets because in the long term future the United States of America’s and Europe’s markets will remain as big markets for the world economy. In addition, Cambodia also needs some more time to prepare herself to enter the structure and market chains in the region, which is a new opportunity.
2. Encourage and promote the exports of Cambodia’s rice to international markets. We all know that agriculture sector is the third most important sector for Cambodia’s economy, after services and industry sector. At the same time, agriculture is a sector that absorbs the most labors in our country. Hence, the promotion of paddy rice production and rice exports is one important obligation that Ministry of Commerce has to pay attention to the implementation of policy measures on promotion of paddy rice production and rice exports, which was officially adopted on 17th August 2010. For that we have to continue finding solutions for relevant issues such as cutting the informal costs to the minimum and promoting investment in innovating rice to increase its quality to satisfy the quality standard importing countries want. I think that all these tasks will be enhanced because in a parallel manner we also introduced the implementation of another policy measure “Credits Guarantee Fund”, which is a new mechanism to promote production sector and the exports of Cambodia’s rice.
3. Continue maintaining price stability of goods and food security. Nowadays, natural disasters in a number of countries in the world have destroyed a lot of farmers’ yields, and the price of fuel has gone up. In this sense, maintaining the price stability of daily use goods especially food is very crucial for the stability and the development of society. Through this, Ministry of Commerce has to follow up with prices of important good on the markets and has to impose appropriate measures in order to maintain food security especially paddy rice and rice security with high effectiveness.
4. Ministry of Commerce has to continue writing laws and regulations that are not complete, in order to make free-market economic mechanisms in the country even better and to response to the new trends of commerce atmosphere in the region and the world by providing confidence to investors and businessmen doing businesses in Cambodia. Furthermore, Ministry of Commerce, president of National Committee of Copyrights Management, has to continue the cooperation with relevant ministries and institutions in implementing copyrights laws more effectively in order to stop violations of copyrights, stop trafficking of unsafe foods and quality, goods with inappropriate standards and bootlegged goods on markets.
5. Continue completing the tasks of integrating and deepening of Cambodia into the region and the world. The Royal Government of Cambodia is committed to promoting the integration of Cambodia into the region and the world through active participation in implementing the tasks that have been agreed upon in contracts. From those tasks we have to continue drawing benefits for Cambodia especially the opening of access for Cambodia’s products to markets in the region and the world. At the same time, we have to continue working hard with our utmost efforts to use the technical assistance provided by the development partners and try to find more new technical assistance in order to improve the capacity of our human resources in public institutions as well as private sector for the production and supply of our goods.

Indeed, although Cambodia has already integrated into the ASEAN community and the WTO, we need to take speedy action to get maximum benefits from these works. In parallel, we need to find way to tape potential from these cooperation in framework of Greater Mekong Sub-region (GMS), Ayeyawady-Chao Phraya Mekong Economic Cooperation Strategy (ACMECS) and other sub-regional triangle development area as well as East Asia Community and Asia-Pacific free trade area, ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), ASEAN-China free trade agreement, East ASEAN Free Trade Area(EAFTA), and Comprehensive Economic Partnership in East Asia (CEPEA) in long term, because all these works will provide extensive opportunities for investment and foreign trade regime of Cambodia. All cooperation not only promotes trade and economic growth, but also creates a current towards establishing a new kind of Cambodian trade architecture, especially diversifying markets for Cambodian production in order to catch up with pace of world and regional economic evaluation and seize new opportunities from the emergence of Asian economy.

In fact, all cooperation has been providing other new opportunities for investment and international trade reform through liberalizing trade and eliminating barriers to investment. Furthermore, these tasks have pushed for implementation of reform programs, modernizing structure and management system of national economy as well as strengthening competitiveness in conformity to both regional and international standards. In this view, Cambodia not only overcomes obstacles hindering economic growth through implementation of reform programs, but also ensures conditions for growth sustainability, and for appropriate sharing cost and equitable sharing benefits from development.

Excellencies, Ladies and gentlemen!

The Royal Government is committed and pays great attention to trade liberalization, free movement of goods nation-wide, bolstering foreign trade ties and integrating trade with the region and the world in order to bring benefits for the people and our nation. I strongly believe that the conference will consider these recommendations within the spirit of implementing their roles and obligation based on the objectives set for 2011 by putting into account the national interest.

Moreover, the Royal Government will put further efforts to develop various sectors, which are to directly support the trade sector as the Royal Government has, so far, implemented, which includes ensuring the banking and financial stability, improving the protection and prevention of social safety net, re-education, increasing the public spending on physical infrastructures and upgrading productivity in order to boost agriculture, including the creation of “Agriculture Support and Development Fund”. In fact, these affairs have led Cambodian economy to mitigate from the hardship of the global economic crisis as we can firmly maintain the financial stability as well as the macro-economic and social stability, especially ensuring the balance of the living standard of the people throughout the country.

In this regard, although we have tremendous potential in front of us, I would like all colleagues to take the concepts raised in this conference for implementation with high effectiveness and efficiency in order to achieve fruitful results for socio-economic development as a whole. Once again, I would like to appeal to Excellencies, ladies and gentlemen and all participants to actively participate in the implementation according to the plan, that has been put forward, as well as sharing information, knowledge and experience gained from this conference for the sake of improving the implementation to achieve new achievements based on our trade development strategy. In this connection, I strongly believe that Cambodia will move ahead with optimism, progress and prosperity on the more comprehensive and favorable foundation together with maintaining peace, political stability, social harmonization and sustainable development.

Before ending, I would like to take this opportunity to, once again, thank Excellencies, ladies and gentlemen, officials of the Ministry of Commerce and related Ministries/Institutions, private sector and development partners, who have supported and promoted trade sector in Cambodia, to become more successful with pride. These contributions truly contributed to the poverty reduction of the people and the development according to the policy of the Royal Government.

At the end, together with the closing of the 2010 Stocktaking and 2011 Direction Setting Conference today, I would like to wish Excellencies, ladies and gentlemen the four gems of Buddhism blessings: Longevity, Nobility, Health and Strength.