Monday, July 30, 2007

Cambodia supplying weapons to Tamil's Tigers

Tigers still getting arms from Cambodia

PHNOM PENH: Tamil Tiger rebels are still getting weapons smuggled from Cambodia, which are fuelling spiralling unrest in Sri Lanka, a security journal reported.

“Cambodia is one of the most significant single sources of weapons for the insurgent group,” Jane’s Intelligence Review said in a report published online last week, without naming any sources. Interior ministry spokesman Khieu Sopheak acknowledged Monday that some weapons might still be getting to the Tigers, but said any smuggling would be small-scale.

“There could be some bad people involved.... We would like information to lead us to the offenders,” he told AFP. “We are victims of weapons, so we don’t want people in other countries to suffer the same crisis,” he said. Weapons from Cambodia had filled Tiger arsenals in the past, but officials here had assured the Sri Lankan government that the arms trade has stopped.

Cambodia remains awash in arms after decades of civil war. But the government has made efforts to reduce its caches, destroying about 230,000 weapons so far.Still, porous borders and poor policing have made Cambodia an attractive base for traffickers of various kinds of contraband.

Five Tigers killed: Five Tamil Tiger fighters were killed in a clash with army troops in the island’s restive northwest overnight, the rebels said on Monday, claiming to have inflicted heavy casualties on the military. The incident in the northwestern district of Mannar came hours after Sri Lankan police found and defused a powerful bomb at a fair just 3 miles from a rally attended by President Mahinda Rajapaksa near the capital Colombo.

It also comes after a rash of land and sea clashes, ambushes and air raids that have killed an estimated 4,500 people since last year alone. “The two-pronged attempt of the SLAF (Sri Lankan armed forces) ... was thwarted by the LTTE frontliners. The SLAF formation fell back with heavy casualties and material loss,” rebel military spokesman Rasiah Ilanthiraiyan said in a statement. The military said it retaliated to a rebel mortar bomb attack and said it had no immediate details of any casualties.

In a separate incident a gunman shot dead a Sri Lankan staff member of the Danish Refugee Council in the island’s army-held far northern Jaffna peninsula, the aid group said on Monday, the latest in a series of killings of humanitarian staff. “One of our national staff in Jaffna was murdered this morning,” said Charles Macfadden, head of the group’s Sri Lanka mission.

“We know nothing. He was on his way to work, we understand he dropped (off) his wife, stopped and had a chat with someone and someone came behind him,” he added. “We have no information as to why or wherefore.” agencies

Cambodia leases islands for $627 million

REUTERS
2:42 a.m. July 30, 2007
PHNOM PENH – Cambodia has agreed to lease five islands in the Gulf of Thailand for $627 million to local and foreign investors who plan to build tourist resorts, the state investment agency said on Monday.

'The projects will become a magnet for tourism. These projects will create natural resorts which are popular with foreign tourists,' Commerce Minister Cham Prasidh said in a statement.

Cham Prasidh, who is also deputy chairman of the Council for the Development of Cambodia (CDC), said the six Cambodian companies that signed the long-term leases will have one year to submit detailed plans for the resorts.

It named the six firms, but did not disclose their foreign investors.

Cambodia's fast-growing tourism industry is seen as another sign of the former French colony's recovery from the destruction wrought by the Khmer Rouge during their four years in power from 1975 to 1979.

Cambodia attracted more than 1.7 million tourists last year, most of them drawn to the 800-year-old Angkor Wat temple complex. But it wants to lure beachgoers as well.

In September last year, a group of Russian investors received approval to build a $300 million tourist resort on Koh Pos (Snake Island) in the Gulf of Thailand.

Friday, July 27, 2007

Cambodia joining the Asian Dragons?

Cambodia, long an Asian mouse, may be ready to roar
Friday, July 27, 2007

PHNOM PENH: Most Cambodians live with two realities: rain and rice. The country that three decades ago abolished money has today embarked on the very long process of adding two new words to the national vocabulary: stocks and bonds.

The Cambodian government recently got its first sovereign debt ratings from the global ratings agencies Standard & Poor's and Moody's, and plans are afoot to open domestic stock and bond exchanges in 2009.

Take a ride into the countryside, where the vast majority of Cambodians live and work in conditions more than one observer has described as more African than Asian, and the very notion of an incipient derivatives market seems absurd.

But in the past few years, investors - not just donors, who still prop up the economy of this tiny, impoverished nation - have started to give Cambodia a good, hard second look. That is no small accomplishment for a nation still recovering from the murderous reign of the Khmer Rouge, a radical communist group that not only abolished money during its 1975 to 1979 rule, but also oversaw the deaths of about two million people - roughly one-quarter of the population at the time. After the Khmer Rouge was ousted by the Vietnamese, Cambodia sank into two more decades of civil war.

These days, the notoriously weak judiciary, lack of openness, deep and pervasive corruption, rampant smuggling, mediocre infrastructure (the postal service is barely functional and electricity costs are exorbitant), and the lack of a well-trained work force make Cambodia what has been politely called a challenging business environment.

But not, apparently, too challenging. Foreign direct investment, led by South Korea and China, rose from $121 million in 2004 to $475 million in 2006, according to data from the National Bank of Cambodia and the International Monetary Fund. Historically high levels of liquidity in global markets, as well as a regional boom and a growing perception that, after 30 years of domestic strife, stability has finally taken root, have all helped draw investment.

In January, the country got its first investment bank, Tong Yang Investment, part of the Tong Yang Group of companies in South Korea. Tong Yang plans to start a real estate investment fund of about $100 million focused on Cambodia and Vietnam and marketed to South Korean investors by the end of this year. Other private equity funds are apparently in the works.

Although Cambodia's meager population of 14 million people means that the country is a hard sell for big consumer companies, others have been drawn by the nation's soaring gross domestic product. In the past decade, GDP growth has ranged from a low of 5 percent in 1998, following the bloody factional fighting of 1997, to a high of 13.5 percent in 2005, according to the Finance Ministry.

Over the past three years, Cambodia has sustained average GDP growth of 11.4 percent a year, and the IMF predicts GDP growth will level off to around 9 percent for 2007. Inflation was at 4.7 percent in 2006, according to the ministry. The government has also been deepening its commercial law framework.

"You've got a story of macroeconomic stability," said John Nelmes, the IMF representative for Cambodia. "That's proving comfortable for businesses to invest."

The Australian mining giant BHP Billiton, and its partner, Mitsubishi, have begun a large bauxite exploration project in Cambodia, and Oxiana, the Australian company that runs the huge Sepon copper and gold mine in Laos, is digging for gold in the jungles of northeastern Cambodia.

The promise of oil off the coast of Cambodia has attracted a host of adventurous companies, including the U.S. oil giant Chevron and China's CNOOC and China Petrotech.

At the end of June, a delegation of French business leaders, including representatives of Total Exploration & Production, Société Générale, France Télécom, Lafarge Cement, and the hotel group Accor, came to Cambodia for a fact-finding tour. Japan sent a similar delegation this month, and Biwako Bio-Laboratory has said that it plans to invest up to $800 million in Cambodia for biodiesel production. On Monday, General Electric opened a branch office in Phnom Penh.

Bretton Sciaroni, a lawyer who has practiced in Cambodia since 1993, cited another factor in the country's appeal: the pro-business stance of the government.

Sciaroni, who also serves as a legal adviser to the government, said that when a client, the U.S. packaging company Crown Holdings, wanted to open a factory in Phnom Penh, getting the government to lower its 7 percent tariff on raw aluminum imports was as simple as asking. "The minister of economy and finance, Keat Chhon, asked my client what they wanted it to be," Sciaroni recalled. "My client said zero percent. He said, fine, and zero percent it is."

"People at the highest levels of government understand the necessity of getting stuff done," he added.

Officials describe the turn to capital markets as part of the nation's natural economic evolution. Last month, donors, including China, pledged to deliver $689 million in aid to Cambodia.

"We still need donor assistance," said Hang Chuon Naron, the secretary general of the Ministry of Economy and Finance. But he added that Cambodia would need more - and more kinds of - financing as its economy expands.

The nation's economic base is still quite narrow, dominated by tourism and the garment industry, which could suffer from Vietnam's recent accession to the World Trade Organization and the expiration of U.S. and European quotas on Chinese textiles, scheduled for the end of next year.

Cambodia also has a high level of public debt - most of it on favorable, concessional terms - and it does a poor job of collecting taxes.

On the upside, Cambodia's manufacturing base has been slowly broadening. Oil, natural gas and the mineral sector are promising, and real estate has been booming, some say too much.

Sciaroni said a number of his clients had been buying up property along Cambodia's southern beaches, hoping that the new airport in Sihanoukville would eventually draw tourists who intended to visit only the Angkor Wat temple, in the north, and then leave. "You don't see it yet, but in three to five years, you're going to see major development on the south coast of Cambodia," he said.

Look around Phnom Penh and the opportunities for growth are evident: no tall office buildings, no real golf course, few malls. But the question Han Kyung Tae, Tong Yang Investment's chief representative in Cambodia, has been asking himself lately is whether all the heady talk about surging investment and the rise of capital markets is premature.

"One day, I see the big potential," he said. "The next I'm skeptical."

Right now, Sciaroni said, few domestic companies outside the financial sector, where annual audits are required, would meet even minimal listing criteria. "Transparency doesn't exist for the majority of companies here today," he said.

That has not stopped the Korea Exchange, which operates the Korean Stock Exchange, from jumping in to help develop Cambodian securities markets.

Talk with Koreans of a certain age in Phnom Penh and they will tell you that Cambodia reminds them of their childhood home. The financial sector is no different: Fifty years ago, South Korea, like Cambodia today, depended heavily on foreign aid and was struggling to develop domestic sources of financing. Korea is now trying to share the miracle of its own growth, said Hong-Sik Choi, the executive director of Global Business Development at the Korea Exchange.

"Korea has experienced a miracle to transform itself from the poorest country to the 11th largest economy in the world during the last half century," he explained. "The securities market was at the center of Korea's economic growth."

Hang, the Finance Ministry official, knows that his country is not for the fainthearted. "Cambodia is high risk, but it's also high return," he said.

And while he concedes that Cambodia's road to economic maturity will be long, he maintains that the advent of publicly traded securities will demand new systems of accounting, openness and accountability, which could improve the quality of the business environment as a whole.

Jie Sun, the deputy director of the Research Center for International Finance at Beijing's Chinese Academy of Social Sciences, said that the major lesson - and perhaps the most instructive for Cambodia - that China learned in the 15 years since Deng Xiaoping opened the gates to Chinese-style capitalism, was that capital markets could help a country with the slow and challenging work of improving its business environment.

"The Chinese have realized that the main function of the stock market is to improve corporate governance," he said at a recent conference sponsored by the Economic Institute of Cambodia, an independent research institute and consultancy in Phnom Penh. "After 15 years, we have now come to the point."

http://www.iht.com/articles/2007/07/27/business/MCambodia.php

Thursday, July 19, 2007

Cambodia's PMT Air has safety problems

PMT Air, a Cambodian airline, was found to have unattended safety deficiencies in an inspection of foreign carriers serving South Korea, a report showed Thursday.

The inspection of seven foreign airlines by the Civil Aviation Safety Authority (CASA) followed the crash of a PMT Air plane last month in southern Cambodia in which 13 South Korean tourists died.

PMT Air topped the list with 10 deficiencies, followed by Russia's SAT Airlines and Cambodia's Royal Khmer Airlines, with seven and five safety problems respectively, the report said.

PMT Air was cited because its crew captains, non-maintenance personnel, conducted safety maintenance checks 26 times over the past three months. The company was also found to have not updated its service route guidelines.

The airline currently runs six flights each week between South Korea and Siem Reap, a popular Cambodian tourist destination.

SAT Airlines was found to have used non-standard parts in the front wheels of its aircraft, while Royal Khmer hasn't updated its service route guidelines.

The report will be forwarded to air safety officials of the nations involved, along with demands for them to strengthen safety protocols, CASA officials said.

The Transportation Ministry announced earlier in the year that it plans to introduce a safety watch list of carriers with a high risk of accidents, similar to the one initiated by the European Union last year, which placed restrictions on 179 airlines from 14 nations because of safety concerns.

SEOUL, July 19 (Yonhap News)

Tuesday, July 10, 2007

Cambodia PM miffed, cuts short visit to India


10 Jul 2007, 0304 hrs IST,TNN

SMS NEWS to 8888 for latest updates
NEW DELHI: India and Cambodia got into a bit of a diplomatic tangle on Monday, with Cambodian PM Samdech Hun Sen cutting short his visit in the wake of state mourning declared here due to former PM Chandra Shekhar's death.

Though the external affairs ministry tried to downplay the episode, sources said the Cambodian delegation was slightly miffed about the communication gap and differing perceptions about protocol to be extended to its PM.

Hun Sen and his delegation, which included deputy PM and foreign minister Hor Namhong, had arrived on Sunday on a four-day state visit.

Sunday, July 8, 2007

Cambodia unveils new National Assembly building

Cambodia officially unveiled on Saturday its new National Assembly building, which stands adjacent to a casino on prime real estate in the capital Phnom Penh.

King Norodom Sihamoni inaugurated the $26 million new lower house of parliament at a ceremony, which also marked the 60th anniversary of the country's legislative body.

The new complex, with 159 offices for the 123 lawmakers in the National Assembly, is 10 times the size of the one it replaced.

It is also next to a casino.

''It shows that the power of gambling is more influential than the power of the legislature,'' Son Chhay, a lawmaker from the main opposition Sam Rainsy Party, said.

''The lawmakers are now being looked down on by the casino building, which is a symbol of evil,'' he said, adding that he skipped the ceremony Saturday out of his disappointment with the new building being located next to a casino.

Some 5,000 people, including government dignitaries and diplomats, attended the ceremony.

Monday, July 2, 2007

Asian Development Bank brings electricity to rural Cambodia

CambodiaADB Helps Wire Northwest Cambodia with Thai Electricity

Press Release - Asian Development Bank

June 28 2007

A major electricity shortage in northwest Cambodia, including around the tourism hub of Siem Reap, is being fixed with the help of an $8 million loan from the Asian Development Bank to build power lines that will import electricity from neighboring Thailand.

The development will be a boost for the regional economy, not just in tourism but also in agriculture, mining and manufacturing. As demand for power grows, it will also reduce emissions as businesses will not have to invest in new diesel-powered electrical generators.

“This will give the region access to cheaper electricity and a reliable supply,” said Tomas A. Norton de Matos, a Senior Structured Finance Specialist with ADB. “It is also promoting regional cooperation because the electricity will be supplied by Thailand. We worked closely with ThaiExim Bank to enable this project, which also includes trade in Thai equipment and services, to proceed.”

ADB’s Board of Directors agreed on June 27 to loan the money to the (Cambodia) Power Transmission Lines Co. Ltd, a private Cambodian company. The high-voltage grid lines will be the first to be privately owned in the Greater Mekong Subregion. It is the first ADB private sector infrastructure project in Cambodia.

“We are pleased to be investing in Cambodia’s critical transmission infrastructure and to have worked closely with Cambodian and Thailand authorities, and all our partners, in this respect,” said Ly Say Khieng, Chairman and CEO of the company.

Northwest Cambodia, like the rest of the country, suffers from insufficient and unreliable power. There is no national grid and electricity is generated almost exclusively by small diesel plants that generate emissions. This hinders Cambodia’s ability to attract investment and promote sustainable economic activities, which are critical to reducing poverty.

Electricity in Cambodia is among the most expensive in the region because of the disaggregated and isolated small-scale systems.

Siem Reap is home to the famed Angkor Wat temples and is an important and growing tourism center. Many hotels in the area rely on their own power generators. There are similar power shortages in neighboring Battambang, an important agricultural center, and Banteay Meanchey, which supports manufacturing and trading activities.

The 115kV power lines will connect with Thailand’s national grid at the border. They will then run about 221 kilometers mainly alongside National Road 5 and National Road 6 to Siem Reap and Battambang. In addition to connecting the major towns, the new lines will provide opportunities to wire rural communities along the route for electricity.

Work on the project has already started and the first section to Siem Reap is expected to be completed this month or next. The second section to Battambang is scheduled to be completed a couple of months later.

ADB’s $8 million loan will go toward the estimated $32 million total project cost. The balance of funding is being provided through equity, as well as loans from the Export-Import Bank of Thailand and local Cambodian banks.