Weekly news round up 2016/ Week 3
Political (Cambodia-Specific)
- Incumbent NEC chief returned to top position 16-01-16
http://www.phnompenhpost.com/national/incumbent-nec-chief-returned-top-position
Long-serving secretary-general of the National Election Committee Tep Nytha, whose tenure has been marred by allegations of election fraud and ruling party bias, was on 15th January reappointed to the position.
The National Election Committee was reformed as part of the deal to see the CNRP cease their parliamentary boycott following the 2013 election. The 9-man committee now includes four CPP members, four CNRP members and one ninth neutral member. The neutral member Hang Puthea commented that his vote had been irrelevant as a majority had already been reached, indicating that at least one CNRP committee member had backed the incumbent Tep Nytha. Nonetheless, the CNRP released a statement expressing ‘deep regret’ over Mr. Nytha’s reappointment which it felt would undermine confidence in upcoming ballots.
With commune elections just over a year away, and a national ballot in 2018, the NEC is working against the clock to organize new voter lists and implement a digital voting system. Nytha, as head of the NEC’s executive arm, will implement the committee’s decisions, overseeing finance and administration.
Europe, European Businesses, EuroCham Members
- Kingdom’s road infrastructure pressured by increased car sales 19-01-16
Peter Brongers, president of the Cambodia Automotive Industry Federation (CAIF), has observed imports of new and used vehicles grew by over 10 per cent last year to 55,000 and expects a further increase of another 10% in the coming year.
With more cars coming on the roads each year, the Royal Government is said to be increasing efforts to raise tax revenues from the automobile sector to improve the Kingdom’s roads and infrastructure. An increase in special tax for complete-build cars is being considered, which would make it even more difficult for authorized and tax-compliant dealers to compete with Cambodia’s large grey market of used car dealers. Mr. Brongers that a road tax applying to both new and used vehicles would be more beneficial to the economy.
Infrastructure, Development and Core Industries
- Cambodia ‘Invited to Join TPP’ 17-01-16
The Cambodian Royal Government has established a study group to prepare for possible inclusion in the Washington-brokered Transpacific Trade Partnership (TPP), with one under-secretary of state from the Ministry of Economy and Finance commenting that a delegation of Cambodian officials to Washington had received an invitation for the Kingdom to join the trade agreement. The Ministry anticipates some changes to the content of the TPP and possible participants following this year’s US Presidential election.
Concerns have been raised by exporters in Cambodia, particularly those in the garment and footwear industry, that Vietnam’s inclusion in the TPP could make their goods less competitive in the US market. The TPP would give garment and footwear exports from Vietnam duty free access to the US market, which could erode the competitiveness of Cambodian garment and footwear exports to the US.
- Firms Urged to Opt for Arbitration, Not Courts, to Settle Disputes 17-01-16
The Cambodian Federation of Employers and Business Associations (CAMFEBA) has expressed support for the National Commercial Arbitration Center and encouraged business partners within the Kingdom to include clauses for commercial arbitration within their bilateral agreements. Because commercial arbitrators have more expertise in commercial issues than judges do, arbitration is seen as a quicker and more efficient manner of solving commercial disputes over pursuing a case through the court system.
The National Commercial Arbitration Center, established in 2013, is not seen as a rival to the court system but a complementary tool for specialized cases. All arbitrators at the center specialize on commerce and trade and are trained in mechanisms for solving disputes that meet international standards.
- Government Says No Dams until 2020, 18-01-16
Minister of Mines and Energy Suy Sem has revealed that the Royal Government does not plan to allow construction of any more hydropower dams prior to 2020, except for the Lower Se San Dam, in Stung Treng province which is already under construction.
Cambodia currently operates six hydropower dams in four provinces–Koh Kong, Pursat, Kampong Speu, and Kampot–supplying 1,000 Megawatts of energy per year, roughly 62 percent of the nation’s total electricity production.
The construction of hydropower dams has been a potent political issue with concerns raised over the dams’ impact on local communities dependent on nearby forests and sources of fish.
- With AIIB, Nation Diversifies Funding Options 20-01-16
Cambodia hopes to benefit from the China-led Asian Infrastructure Investment Bank (AIIB), which was launched in Beijing last weekend. The multilateral development bank aims to support infrastructure growth in the Asia-Pacific region through the provision of loans, and supports China’s ambitious “One Belt, One Road” initiative to boost trade and connectivity across the Eurasian landmass.
David Van of Bower Group Asia commented on the opportunity that AIIB represented to diversify Cambodia’s sources of funding: “The more institutions that Cambodia can tap into for funding the better … It wouldn’t be surprising if the AIIB becomes the largest donor [to Cambodia] considering the funds available…[and because] they are keen to develop the Greater Mekong Sub-region.”
The bank is expected to approve its first loan within six months, and thereafter to lend between $10 billion to $15 billion per year to members for at least five years.
The government’s National Strategic Development Plan 2014-2018 allocates about $1.6 billion for infrastructure—including transportation, water, sanitation, power and telecommunications—accounting for 21 percent of the period’s total budgeted allocation of capital expenditures. Lending via the AIIB is subject to the same monitoring, regulatory and transparency standards as the International Monetary Fund, World Bank, and ADB, and therefore is considered more transparent than direct loans from China and more sustainable than dependence on foreign aid.
- Green energy remains untapped 21-01-16
A new report by investment firm Mekong Strategic Partners, titled Switching On: Cambodia’s Path to Sustainable Energy Security, suggests that the Royal Government should consider more investment in non-hydro renewable energy technologies, which would allow the country to pursue energy security while increasing energy access, reliability and affordability. At present, the government’s plan to ensure that 100% of the Kingdom’s villages have access to electricity by 2020 is almost entirely reliant upon existing and planned hydro and coal-fired power stations.
The study, commissioned by the National Council for Sustainable Development (NCSD), found that large-scale hydro and coal-fired power plants currently provide power for between $0.08 and $0.11 per kilowatt hour, once transmission and distribution losses are factored in. But with prices dropping on solar technologies, industrial-scale installations can currently generate electricity profitably for as low as $0.12 per kilowatt hour – or less if grant funding is available.
The authors noted that in addition to being close to par on price, solar power generation has the added benefit of being most plentiful during daytime demand peaks, and can boost supply during the dry season, when hydropower output is much lower. Solar power generation facilities also have a significantly smaller carbon footprint than hydro or coal-fired power plants, and in many cases can occupy the rooftops of existing structures.
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