Europe, European Businesses, EuroCham Members
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EU to Provide 10 Million Euros for Election Reform, NEC Still Needs More 10-02-16
On Tuesday 9th February the European Union pledged €10 million to support the National Election Committee (NEC) in preparing for commune elections in 2017 and the national election in 2018. NEC spokesman Hang Puthea said the EU will provide €10 million in aid to Cambodia for election reforms through the Ministry of Economy and Finance. €6.7 million of the funds will be used to buy materials for the NEC, while the remaining budget will go to various organizations working toward election reform.
Infrastructure, Development and Core Industries
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Cambodia suffering a lack of depth in skilled-worker pool 06-02-16
A recent report by the Asian Development Bank titled ‘Cambodia: Addressing the Skills Gap’ suggests that 40% of Cambodian youth lack sufficient education to adequately perform their jobs. The report identifies economic pressures causing families to take children out of school prematurely (prior to secondary education) as a root cause of the skills gap, whilst also highlighting the ill-preparedness of many primary school teachers who themselves may not have completed secondary school.
Heng Sour, director general for administration and finance at the Ministry of Labour and Vocational Training, said the government must work together with the private sector to encourage youth not just to stay in school but to pursue in-demand skills rather than popular business administration degrees.
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Sihanoukville tries not to miss the boat 09-02-16
A Phnom Penh Post profile of the potential for Sihanoukville to serve as a destination for international luxury cruise liners. Sihanoukville port received 36 calls from cruise ships in 2015, 11 more than in 2014 and with a 75 per cent increase in passenger numbers.
However, the city at present is said to lack many of the basic services and facilities that cruise-ship passengers expect such as a diversified tourism product, onshore attractions and consistent, high-quality services. Sihanoukville Port (SAP) is more orientated towards cargo – there is no passenger terminal or tourist amenities at the port such as ATMs or public restrooms. Many of the cruise ships that call at the port must anchor offshore and transport passengers to the port in tenders. There are some claims of local monopolies limited private sector service provision: Angkor TK Travel and Tours is apparently the only travel agency permitted to enter SAP and meet arriving cruise boats with shuttle buses.
However, onshore limitations might not be the only thing holding vessels back from calling at Sihanoukville. In September 2014, the US Coast Guard added the port to its International Port Security Programme (IPSP) blacklist, which charts countries it claims do not maintain effective anti-terrorism measures. Ships stopping at blacklisted ports are subject to additional security measures upon return to the USA which can encourage operators to bypass the port.
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SME Federation Wants its Own SEZ 09-02-16
The Federation of Associations for Small and Medium Enterprises of Cambodia is planning to propose that the government set up a special economic zone (SEZ) specifically for small and medium-sized enterprises (SMEs) so that they can work in clusters, saying this will enhance their productivity, increase the quality of exports and reduce the country’s reliance on imports, its president has said.
Federation president Te Taing Por suggested a smaller-scale project as an initial experiment: “We will call for government to establish a SEZ for SMEs on 10 to 20 hectares of land with about 20 factories. We want to operate this SEZ as a model and if it is successful we will expand it,”. He expressed hope that SMEs could play a role in reducing the need for imported inputs.
In Cambodia most SMEs operate outside of SEZs, though the country may seek to learn from SME clusters in countries like Germany and South Korea.
Sok Chenda of the Council for the Development of Cambodia commented on how the 1994 Law on Investment (that provides provisions for the Qualified Investment Project incentives for large investments) does not provide incentives from SMEs and that the Council was reviewing this as part of efforts to integrate into regional production chains.
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Cassava Prices Drop Sharply Amid Low Demand 10-02-16
Cassava export prices have fallen to new lows amid decreasing demand from international markets, particularly China. Traders in the country’s three main cassava-growing provinces (Battambang, BanteayMeanchey and Ratanakkiri) report a drop in export prices from around 680 riel per kg to 525 riel per kg now, a 23% drop.
Cambodia lacks facilities to process raw cassava, and farmers have traditionally focused on exporting to Thailand and Vietnam, where the crop can be processed and then exported to China. But slack demand in China and competing harvests in Vietnam and Thailand has hurt demand for Cambodian cassava. Reduced Chinese demand is in part due to lower oil prices, reducing the need to import ethanol made from cassava.
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Government Targets Foreign Retirees With New Policy 11-02-16
A draft policy produced by the Ministry of Tourism contains measures to attempt to attract foreign retirees, encouraging foreigners to buy property and stay longer in the country. The proposed policies include the development of “special residences” throughout the country consisting of commercial tourist properties and a wide range of complementary facilities. “Special tourists” would have the right to buy, rent or sell property in these residences, and also be entitled to longer-term and more flexible visas, according to the draft. Private sector representatives highlighted how security and medical facilities would also need to be upgraded to support such ‘special residences’.
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Bangkok grows as hub for Cambodian flights 12-02-16
Seat capacity on flights from Thailand to Cambodian airports increased 20 per cent last year. Whilst Thailand connects to Cambodia only through Bangkok compared to 4 Vietnamese destinations, the increase in Bangkok-Siem Reap and Bangkok-Phnom Penh flights has seen Thailand now overtake Vietnam as Cambodia’s largest international market in terms of scheduled airline seat capacity.
Bangkok Airways, which operates 11 daily flights between Bangkok and Cambodian airports, is second only to Vietnam Airlines in terms of overall seat capacity, with 21,420 weekly seats. Most of these seats are filled with passengers on connecting flights to destinations beyond Bangkok, supplemented by a number of Cambodian tourists who travel to Bangkok for shopping and health services.
A net reduction in seat capacity to Vietnam can be understood in the context of increasing direct flights to other Asian countries, particularly China which now has 8 airlines offering flights between Chinese and Cambodian cities.
