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Japanese investments in Cambodia

Sorn Sarath / Khmer Times Share:
Ambassador of Japan Mikami Masahiro talks with Khmer Times. KT/Tep Sony

Cambodia and Japan have just held the 20th Cambodia-Japan Public-Private Sector Meeting under the agreement for the liberalisation, promotion and protection of investment. This is the only bilateral mechanism between the two countries to promote diplomatic, economic, trade and investment cooperation. Khmer Times reporter Sorn Sarath sat down with Ambassador of Japan Mikami Masahiro to discuss the comprehensive cooperation between the two countries.

KT: What are the Japanese  development programmes that have been implemented in Cambodia so far?


Mikami: Japan’s cooperation here has been provided for the improvement of basic infrastructures such as roads, bridges, ports and water supply systems. We also have been supporting Cambodia to improve the quality of life by helping to upgrade public services such as hospitals and schools.

Japan also helps Cambodia to improve governance, such as the development of the law and legal system.  There are various schemes, but the ultimate purpose is to help to improve the life of Cambodian people. Japan’s economic cooperation also contributes to improving the business environment for investors.

So far, Japan has provided $2.8 billion of grant and technical assistance and $1.7 billion worth of yen loans.

After the Paris Peace Accord was achieved in 1991, Cambodia needed help from outside for the reconstruction of the country where the basic infrastructures and the human resources were severely damaged. Japan, together with the international community, was very happy to help Cambodia to build peace and reconstruct the country.

Cambodia has made a great achievement in terms of political stability and economic growth but there remain problems and challenges that the country has to overcome and solve. With its location in the centre of the Mekong region, if Cambodia becomes unstable
again, that will provide a negative impact on the entire region as well. And, for Japan, we need stability and prosperity in Southeast Asia.


KT: In terms of investment and trade, Cambodia is seen behind its neighbours in attracting Japanese investors.  What is the reason?


Mikami: Cambodia is a little behind in the region, but I think it has a good potential for more investment. Recently, Cambodia is attracting more Japanese investors and I hope more Japanese investors will come here.

I think Cambodia was a bit late with an opportunity for investors compared with such countries as Thailand because of the civil war in the 1970s and 1980s. In the Mekong region, Japan first cooperated with Thailand intensively and Japanese companies came to invest heavily in Thailand in the 1980s and, more recently, we are increasing our cooperation and investment in Vietnam. In the case of Cambodia, because of the situation of the country, it was difficult for Japan to come until full peace was achieved in the 1990s.

However, Cambodia is gradually becoming an interesting place for Japanese investors as you can see in the AEON investment project. Before making decisions, Japanese companies tend to examine the situation very carefully but when they put in their investment, they will stay for a long time . They do not come just to make quick money. And also many Japanese companies seek value-added production in high-tech and processing sectors. The Cambodian government wants to attract more Japanese investors that will create more high-quality employment.

We also see the country’s potential in the agriculture sector that is not being used fully because Cambodia does not have much processing industry and mostly exports raw materials at low prices.


KT: what else should the Cambodia government do to attract more investors, especially from Japan?


Mikami: On September 3, I co-chaired the 20th session of the Cambodia-Japan Public-Private Meeting with H.E. Sok Chenda, the minister attached to the prime minister and secretary-general of the Council for the Development of Cambodia. During the meeting, the Japanese Business Association of Cambodia (JBAC), which has about 270 member companies, raised issues that they need the government to deal with, such as cross-border logistics in Bavet and Poipet/Stung Bot, electricity tariffs and taxation systems.

We hold such a meeting twice a year for Japanese companies to share their serious problems with the Cambodian government and hear the progress in solving those problems from the government. The government has such a bilateral meeting only with Japan and we appreciate that the meeting contributes a lot to improving the investment environment of Cambodia not only for Japanese investors but also for others.


KT: Recently Cambodian authorities asked Japan about waste management. What is your response?


Mikami: Waste management is a very important area for Cambodia to deal with and we are helping Cambodia with several projects implemented by JICA in such areas as dumping stations and recycling of plastic garbage, but waste management is one of the most difficult issues to deal with because you need to have good policies, robust legal systems and people’s understanding and cooperation. I understand that City Hall of Phnom Penh is reforming its system of garbage collection. I hope that our experience can be of some help for the improvement of the situation.


KT: what has Japan done to help Cambodia to contain COVID-19 so far?


Mikami: Japan was the first donor that provided some medical equipment to Cambodia to contain  COVID-19. We also provided financial support through international organisations such as UNICEF [United Nations Children’s Fund] to offer an education programme for people in rural areas and vulnerable people to prevent the spread of COVID-19 and IOM [International Organization of Migration] to help migrant workers coming back from Thailand. We are also providing support for the improvement of hospitals in Siem reap.

And now we are considering providing more financial support for the Cambodian government to implement economic and social programmes aimed at supporting vulnerable sectors and people
who are severely affected by COVID-19.

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