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Kingdom of Cambodia
Ministry of Commerce
Launch meeting of 7-UP Mark II
Hanoi, Viet Name
On 23-24 April,2004
By NEY Sakal, Chief Office of Business-Service and
Competition Domestic Trade Department Ministry of
Commerce.
GEOGRAPHY
-Location of country
-Land&Relief
-Climate
2-Landscape:
-One part is shallows on Tonle Sap,
-Northern covers by basalt land,
-Mekong river across country from
north to south. Mekong water flooded
in rainy season and doubling Tonle
Sap lack size,
-Phnom Penh is Capital,
i) mains ports: Sihanoukville sea
port and Phnom Penh port
-ii) mains air ports: Phnom Penh
and Siem Reap,
3-International border are shared
with Thailand and Lao PDR on west
and north, east and southeast with
Socialist Republic Viet Name
3- Climates: 2 mains seasons rainy
and dry seasons. A small cooler
LAND-RELIEF
Area is 181,035skm.Apart from the Cardamom
mountains in the south,which divide Cambodia’s
interior from it southern coastline,the greater
part of the country consists of a sallow basin
centered on Tonle Sap. The Mekong River
crosses Cambodia from N to S.During the rainy
season a large amount of the Mekong’s
floodwaters are diverted into the Tonle Sap,
doubling its size. Forest covers 62% of land.
Climate : 2mains seasons : RS ( late Jun-Sept );
DS
( Mar-Jun ); Low Temp. ( Oct-Feb );.......
DEMOGRAPHY
1998 general census :11.4m and around 13.5m
in 2002. 36%is classified as poor, and +60% are
literacy. Averaged density’s 74, but 161 people
per skm in crowded region. 90% are Khmer.
85%-90% live in rural area.
Age structure(%of total pop.):0-14y is 42.8;
15-64y is 53.7 and +65 years is 3.5.
Religion: Buddhist
ECONO.PERFORMANCE
Growth of output annual change,%:
Annum
GDP
1990 95 98
1.2 6.9 3.7 10.8 7.0
Agriculture 1.2 3.3 5.8
Industry
Services
99 2000 2001 2002
3.4 -1.5
5.7
5.5
2.2
-2.7
-2.1 3.2 -2.5 19.3 30.7 12.9 17.7
2.7 8.4 4.8 10.9
5.7
4.2
4.5
Social Economic Policy
Industry
industry contributed
17.7% of GDP in 2002
out of which manufacturing
representative
6.9%,
construction 7.6% and
mining and
quarrying 1.7% with
textiles and garments…
-Annual growth of construction
industry grew rate 16.1% and remain higher grow.
-In early 1994, there were 7 garment manufacturers
employ labor 10, 000. Currently there are more than
200 garment factories which employ over 100 000
Cambodian workers estimate monthly payroll
around 8US$ million.
Industrial Policy Framework
-Promotion of export Oriented policies
-Promotion of Labor Intensive Industries
-Promotion of Natural Resource Based Industries
-Encouragement of selective Import Substitution
Industries
-Promotion of Micro & Small Scale Industries
-Promotion of Rural Industry
-Promotion of Downstream Industries Based on
Petroleum
Trade Policy
The role trade is supposed to play in promoting and
reducing poverty cannot be over-emphasized.
-Increased trade, promoted by liberalization
policies,acts as a powerful stimulus to economic
growth.
-Trade may facilitate international diffusion of
knowledge, thereby speeding up growth.
-Trade may occasionally substitute for aid in the
development process.
-Cam. joint Asean in 1999 and new membership of
WTO on Sept.11,2003 at Cancun, Mexico.
Main export goods 2002: 1,487,683,583US$
garment product (+1,200m); rubber(30m); article
of wood(16m); precious stone (17m); man-made
staplefiber(12m);tobacco(4m);fish(4m);cereal
(4,5m); live animal(+1m)… non official agroproducts + 800 000 MT
Main import goods 2002: 1,664,245,246US$
man-made staple fiber(354m); fuel(182,5m);
vehicle(93m);pharma.product(42m); paper(40m);
tobacco (76m);
sugar(28m);
cotton(28m);
fertilizer(8m); cooking oil(7.5m);......
National Level of Marketing Policy
Rapid growth
Of population
Rapid Labor
force growth
MFN/GSP/AISP
More jobs
Opportunities
Trade
Insufficient
employment
creation
Increased
incomes
Low growth in
Per-capita
Income level
Low –per-capita
Income Level
Privatization
Privatization has taken place in two phases:
1-from 1991 until mid 1993
2-after April 1995 when the new privatization regulation were
approved .
During the first phase:
i)
The authority to sell and lease the state enterprises
rested with the sect oral ministries with no provision for
external approval
ii)
Attracting foreign investors was high priority
iii) Maintaining current levels of employment
was considered crucial. The result reflect
these priorities. Ministries simply
privatized their own enterprises,
negotiating the term of the sales/leases
and bringing revenues directly in to
Ministries’ budgets.
Investment
The following are important sectors where investment are
strongly encouraged:
1-pioneer and/or high technology industries
2-Job creation
3-export-0riented
4-Tourism industry
5-Agro-industry and processing Industry
6-Physical infrastructure and energy
7-Provincial and rural development
8-Environmental protection
9-Investment in Special promotion Zones
(SPZ)
OPPORTUNITY FOR BUSINESS
1.
Trading:
Potential Exporter for cereal is recommended: the volume
of cereal in transaction and unofficial exporting through
borders was estimated not less than 500,000tons;
including rice maize soy bean... Peeper is growing to
many thousands tons soon.
Cassava is very high yield in many specifics area.
Cashew nut have developed 30,000tons this year and
exploded to 100,000tons soon.
Hand made silk process was promoted and10,000
weavers produced the famous traditional goods.
Others handicraft both traditional and modern goods.....
Numerous goods and plantations
1-Cashewnut
Surface 20,000 ha.
Product 30,000 t will
explode 100,000 t soon.
1small factory is processing
4- Great Lake Fish Exports
Fisheries play a vital role in supporting rural livelyhoods throughout Cambodia, but especially around
the Tonle Sap area where more than 1.2 million
peoples depend on the fisheries sector for
employment, income, and food security. The annual
inland fisheries catch has been estimated at more
than 400,000t/year.
Fresh and processed fish are traded widely within
Cambodia, and are exported in significant quantities
to neighboring countries and in some instances
exported to more distant market.
5- Cambodia-Lao-Thai Triangle Joint Develop.
6- Cambodia-Lao-Viet Triangle Joint Develop.
Investment Guarantees
The major guarantees available are:
-Investors are treated in a non-discriminatory
manner as set by law, except for ownership of
land as set forth in the Constitution of the
Kingdom of Cambodia
-The RGC shall not under take a nationalization
policy which would adversely affect private
properties of investor in the Kingdom
-The RGC shall not impose price controls on the product pr
services of investors who have received prior approval
from the Government
-Free transfers of return for the following:
i-Payment for imports and repayment of principal and interest
on international loans,
ii-Payment of royalties and management fees
iii-Remittance of profits
iv-Repatriation of invested capital
V-Repatriation of wages and salaries of foreign employees
Consumer policy
Cambodia has not yet the competition and also the
consumer law, but we has a slight concerning on
the consumer protection in law of:
-quality control and
-unfair competition acts
The government of Cambodia has
commitment to construct the competition
law in next two year
-Ministry of Commerce has singed the MoU
with IC ( Consumer International, Regional
Office for Asia and the Pacific) on 23rd April
2003 for draft for consumer protection and
anti-monopoly issue.
-UNTAD: involving with training for trainer
related to competition
The structure of Market
Too small in market volume of Cambodia:
-Retail
-Wholesale
-Free competition on the markets
The New Economic Mechanism
-Started to run out from centrally planed economy to
a market oriented economy in 1989
The Economic System:
-Started to run out from centrally planed economy to
a market oriented economy in 1989
The Economic Integration:
-1997: Member of ASEAN
-2003: Member of WTO
Social and Economic Policy
Affecting By Competition
Power
-Power: under monitoring by government, and loan
from ADB for establish the plantation,
-Cambodia still have only small one of the
hydropower
Nature of Market/Competition
Market Based Economy:
Price liberalization privatizaion, private sector
development support including private land
ownership and open door policy
Level of Competitiveness of the local firm:
Example:
-Exclusive right on import
-Price of transportation grown up during the holiday
-The measurement still a problem
Nature of Market/Competition
Barriers to competition:
-Low education and skill levels of the labor force
-High transport costs
-Small-Scale of private enterprise
-Marketing problem
-Low labor productivity
-Poor financial services
Sectoral Policy
Telecom
driven by 3 private companies in competition the
prices of calling, but still in high prices, and
-For IT Cambodia is a member of the following
international organizations:
1-International Telecommunication Union
2-International Civil Aviation Organization
3-United Nations Education, Scientific and Culture
Organization
4-World Tourism Organization
Transportation
Transportation: No state company
-Open sky policy
-On the transport on land and water: run
private company
Financial Service
Welcome on the bank investment:
The structure of credit:
-Rural credit : run by private bank and NGOs
-Over 5 bank is operating by private sector in
Cambodia
Health Services
No restriction to setting up the Health
service center in city up to rural areas:
-Hospital
-Drug stores
-Consulting service
Anti-Competition Practices
-Monopoly in some business activities
-Limited service suppliers by nature
-Policy implementation by some officials is sometimes
inconsistent
Consumer Movement
No formal consumer movement against anticompletive practices, but complaining and asking
for opening up more competitive practices
Conclusion
Cambodia is moving forwards to a market based economy
by promoting private sector development,
however, it is
still facing numerous internal challenges to market
mechanism in particular to business competition in the
country particularly lack of a comprehensive regulatory
framework including competition law or anti-monopoly law
etc.
In addition, there are numerous constraints to
competition namely
lack of skilled human resources,
poor infrastructure system, limited financial services, low
purchasing power in the country due to high poverty
incidences, weakness in macroeconomic management
leading to relatively macroeconomic instability etc.
RECOMMENDATION
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Strengthen market mechanism
Simplify and clarify the policy and regulatory framework for
private sector enterprise and investment
Improve Productivity
Strengthen competitiveness through human resource development
Clarify the supportive role of government
Promote and facilitate substantive dialogue with the business
community
Strengthen infrastructure development
Strengthen macroeconomic stability
Strengthen trade access to neighboring country markets
Mobilize financial resources and facilitate access to credit
Please, Visit Cambodia
our wishing dance
warmly welcome you.
Thank You for
Your Attention !