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Monday, April 11, 2005


Thursday April 7, 2005

News Comment

FOCUS ON TRADE, NOT POLITICS Investment and trade possibilities do exist in Vietnam, Cambodia

Verghese Mathews

The Federation of Malaysian Manufacturers and the Singapore Manufacturers' Federation are jointly organising a trade and investment mission to Vietnam and Cambodia in May.

It is heartening to see the private sectors of the two countries cooperating meaningfully and setting the pace for their politicians.

The hard-nosed private sectors of the two countries see opportunities in both countries.

In Cambodia, the private sector, according to reports, is looking at "investment in infrastructure development, agro-business, light and medium industries, tourism-related activities, engineering, construction, public works and real estate", while Vietnam offers possibilities in "business areas such as electric and electronic, information and telecommunications, construction, agricultural, property and infrastructure development and power generation".

The visit is timely and will be warmly welcomed. There is a far greater acceptance - at the bureaucratic and business levels in the two countries - that the onus is upon them to make their countries attractive to foreign players, in particular to visiting trade and investment missions.

The two countries also realise that they play an integral role in the success or failure of these missions.

On their part, they want the opportunity to work with the Singapore and Malaysian business communities, for whom they have a healthy respect. They also see the networking advantages and the global reach of the Singapore and Malaysian partners in Asean.

Several businessmen in Singapore and Malaysia already have an understanding of doing business there.

First-timers in the mission will be impressed not only by the opportunities the two countries offer but also by some of the officials they will meet.

Cambodia, for example, has young bureaucrats who are extremely competent, dedicated and determined to play a legitimate role in the economy of the region.

They see this as an inevitable means of creating much-needed jobs and enhancing the living standards of their people. These bureaucrats are pragmatic both in their outlook and in their assessments and are deeply conscious that there are elements in their environment which remain an impediment to enhancing business confidence even though Cambodia has been successful in recent years in securing and maintaining macroeconomic stability and in having put in place an attractive and liberal investment regime.

These young bureaucrats, who have the confidence and support of Prime Minister Hun Sen, are the ones who are quietly spearheading the reforms away from the limelight.

Foreign investors, too, have confidence in them and in the direction the Cambodian government is taking, although they bemoan the slow pace of much-needed reforms.

In particular investors want to see an end to the "hidden costs", a euphemism for pervasive corruption, in their business operations and want greater transparency in the judiciary which is widely regarded as being susceptible to external influence - which could favour local partners.

To overcome this, foreign investors often include an arbitration clause in contracts for disputes between foreign and local partners to be resolved in a stated third country.

Cambodia, like Vietnam and Laos, is set to move forward. It is more democratic and has made strides but it often gets bad international press - of its own making.

What invariably makes the headlines are reports on the fractious politics and the unending politicking.

Singapore and Malaysian investors may see it as an impediment. While such concern is not without merit, they should see it in perspective.

Meanwhile, not withstanding the different political styles, Cambodia and Vietnam will become even more attractive investment destinations for our businessmen if the two governments are willing to open up their countries even further.

Our businessmen should also look at Laos, landlocked and with few viable industries, but which has potential for eco-tourism and the production of hydroelectric power.

The World Bank has just agreed to provide loans and guarantees for a $1.95 billion hydroelectric dam project designed to produce electricity for export to neighbouring Thailand. Laos needs all the help it can get.

The writer, until recently Singapore's Ambassador to Cambodia, is a Visiting Research Fellow at the Institute of Southeast Asian Studies, Singapore.

SUBMITTED BY: Verghese Mathews
Email: math...@iseas.edu.sg

Sun, 10 Apr 2005

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