1. 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.

2. GEOGRAPHY -Location of country -Land&Relief -Climate

3. 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 season from October to January

4. 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 );.......

5. 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

6. ECONO.PERFORMANCE Growth of output annual change,%: Annum 1990 95 98 99 2000 2001 2002 GDP 1.2 6.9 3.7 10.8 7.0 5.7 5.5 Agriculture 1.2 3.3 5.8 3.4 -1.5 2.2 -2.7 Industry -2.1 3.2 -2.5 19.3 30.7 12.9 17.7 Services 2.7 8.4 4.8 10.9 5.7 4.2 4.5

7. 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…

8. -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.

9. 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

10. 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.

11. 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 agro- products + 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);......

12. National Level of Marketing Policy Rapid growth Rapid Labor Of population force growth MFN/GSP/AISP More jobsInsufficient Opportunities employment Trade creation Increased incomes Low growth inLow –per-capita Per-capita Income Level Income level

13. 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

14. 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.

15. 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

16. 7-Provincial and rural development 8-Environmental protection 9-Investment in Special promotion Zones (SPZ)

17. 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.....

18. Numerous goods and plantations 1-Cashewnut Surface 20,000 ha. Product 30,000 t will explode 100,000 t soon. 1small factory is processing

19. 4- Great Lake Fish Exports Fisheries play a vital role in supporting rural lively- hoods 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.

20. 5- Cambodia-Lao-Thai Triangle Joint Develop. 6- Cambodia-Lao-Viet Triangle Joint Develop.

21. 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

22. -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

23. 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

24. 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 23 rd April 2003 for draft for consumer protection and anti-monopoly issue. -UNTAD: involving with training for trainer related to competition

25. The structure of Market Too small in market volume of Cambodia: -Retail -Wholesale -Free competition on the markets

26. 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

27. 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

28. 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

29. 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

30. 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

31. Transportation Transportation: No state company -Open sky policy -On the transport on land and water: run private company

32. 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

33. Health Services No restriction to setting up the Health service center in city up to rural areas: -Hospital -Drug stores -Consulting service

34. Anti-Competition Practices -Monopoly in some business activities -Limited service suppliers by nature -Policy implementation by some officials is sometimes inconsistent

35. Consumer Movement No formal consumer movement against anti- completive practices, but complaining and asking for opening up more competitive practices

36. 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.

37. RECOMMENDATION  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

39. Please, Visit Cambodia our wishing dance warmly welcome you. Thank You for Your Attention !