Hallmark produce such as rice, rubber, vegetables, sugar cane, cashew nuts and soybeans have been the mainstay of exports, along with livestock and aquaculture.
Amid the nation’s efforts to be a middle-income economy by 2030, agriculture was chosen as a priority sector, with the government actively wooing foreign investors.
Korean investment in Cambodia’s agricultural industries has seen a steady rise in recent years, reaching $6.7 million last year. Despite its variety, Korean companies have been inactive in producing goods such as cassava, palm oil and fertilizers, according to ASEAN-Korea Center secretary-general Kim Young-sun.
|Participants pose at an investment and business environment seminar on Cambodia jointly organized by the ASEAN-Korea Center and the Council for the Development of Cambodia at Shilla Hotel in Seoul on Wednesday. In the picture are Lee Tae-ho, the Korean Foreign Ministry's deputy minister for economic affairs (center); Chea Vuthy, deputy secretary general of the Cambodian Investment Board and Cambodia Special Economic Zone Board (fourth from right); ASEAN-Korea Center secretary general Kim Young-sun (third from right); and Cambodian Ambassador Long Dimanche. (ASEAN-Korea Center)|
“Our center in February organized a mission to agricultural and food processing plants in Phnom Penh for investment and research,” Kim said at an investment seminar on Cambodia’s agricultural sector on Wednesday. “There we witnessed firsthand Cambodia’s developing agricultural industry and the great potential it holds.”
Phnom Penh recently launched its Industrial Development Policy for 2015-25, which targets increasing the share of industries in gross domestic product to 30 percent by 2025; diversifying export by boosting the portion of processed agricultural products to 12 percent by 2025; and formalizing small and medium-sized enterprises under the purview of the state.
The policy has provisions for creating special economic zones for the agro industry with special incentives and research and development funding, said Chea Vuthy, deputy secretary-general of the Cambodian Investment Board and Cambodia Special Economic Zone Board.
“There are lots of opportunities for us to work together,” Vuthy stressed. “Korea has capital, technology and the ‘fighting spirit,’ while Cambodia has abundant lands, young and affordable workforce as well as preferential access to the markets in ASEAN, China and Japan.”
Noting the government has embraced economic globalization, Vuthy highlighted that foreign investors could tap into agriculture, agro processing, banking, insurance, telecommunications, among others. A full ownership without requirements for local equity is guaranteed, he underlined, adding that tax holidays and import duty exemption are provided.
Lee Tae-ho, the Korean Foreign Ministry’s deputy minister for economic affairs, said that Cambodia and Korea have made “remarkable advances” in their relations since reestablishing ties some twenty years ago.
Korea is the fourth-largest provider of official development assistance to Cambodia, which is used to rehabilitate and develop the county ravaged by war and conflict under the Khmer Rouge regime and socialist Vietnam forces for two decades since 1970.
“There is no denying that Cambodia is one of the fastest growing economies in the world now with an annual growth averaging 7 percent,” Lee said. “The agricultural industry in particular accounts for 70 percent of Cambodia’s total manpower, and stands as the country’s central pillar of development.”
Korea has become the second-largest investor in Cambodia after China with a cumulative investment over $4.5 billion, particularly in agriculture, banking, construction, property building and manufacturing of garment and electronics. Since 1997, two-way investment has increased more than nine times.
Last year, bilateral trade surpassed $600 million, equivalent to 3.3 percent of Cambodia’s total trade volume. In tourism, more than 400,000 people from both side visit each other’s countries annually.
Cambodian Ambassador Long Dimanche echoed Lee, saying the two countries have rapidly advanced their partnerships over the last 20 years.
In December 2014, Cambodian Prime Minister Samdech Techo Hun Sen and Korean President Park Geun-hye signed five memorandums of understanding covering education, health care and medical science, intellectual property, retail payment systems and youth start-ups, Dimanche noted.
As part of the delegation’s visit, the first meeting of the Cambodia-Korea Joint Economic Committee was held on Tuesday, cochaired by Cambodian Minister Sok Chenda Sophea and Korean Deputy Minister Lee. Both sides discussed investment situation and new fields of opportunities, winning overseas contract, national development issues, multilateral cooperation and overseas laborers.
The event was organized by the ASEAN-Korea Center and the Council for the Development of Cambodia, the country’s highest decision-making body for investment.
By Joel Lee (firstname.lastname@example.org)