CAMBODIA AND FOREIGN RELATIONS
In December 1999, Cambodia regained its United Nations seat which had kept vacant for more than a year. For a while the Khmer Rouge represented Cambodia in the United Nations. They were allowed to keep the seat even after they were deposed. China, the United States, Australia, France and Japan are all involved in Cambodia. A passport in Cambodia costs $250, a sum that is out of reach for most Cambodians.
Cambodia is the only former recipient country of U.N. Peacekeeping Operation (PKO) forces that has started to dispatch its military personnel to support U.N. PKO activities in other countries. Since 2006, Cambodia has dispatched more than 800 military personnel involved in mine-clearance and construction to different U.N. Peacekeeping Missions to countries such as Sudan, the Central African Re- public, Chad and Lebanon. With experiences in cooperation with the U.N. and in view of sharing its own experiences in national reconciliation, building and maintaining peace while committing to promote inter- national peace within the U.N. frameworks, Cambodia now stands ready to become a non- permanent member of the U.N. Security Council. It is for the first time that Cambodia presents its candidature to the U.N.’s main body for the 2013-2014 term since gaining independence in 1953 and becoming a member of the U.N. in 1955. The approach to put an end to the civil war and the hard-earned peace by Cambodian people themselves can serve as a role model for the international history of peace-making and peace- building. Therefore, Cambodia is very keen to pursue its commit- ment and effective contribution through the UNSC to the cause of international peace, security and peaceful settlement of conflicts in various parts of the world. Cambodia is also supportive of and favorable to the enlargement of the UNSC and other U.N. reforms, with our conviction that the reforms to be carried out should ensure effective collective actions of the U.N. and emphasis on interdependence of international security, development cooperation and respect for human rights.
According to Cambodian government: “Cambodia adheres to policy of neutrality and non-alliance. It indiscriminately establishes relations with all friendly states worldwide. It conducts policies of mutual understanding, equality, respect, and non-interference in other state's internal affairs. Cambodia would fortify bilateral friendship and cooperation with its neighbors. The border issues with its neighbors would be resolved through negotiations, and peaceful means. Cambodia would establish bilateral and multilateral friendships with regional countries, especially with ASEAN. It wants to contribute as it may in jointly building the Southeast Asia to be a region of peace, tranquility, and prosperity. When it becomes an active member of ASEAN, Cambodia would conduct itself within the principle of the agreements. [Source: Tourism of Cambodia ~]
In September 2009 it hosted a meeting attended by 50 Least Developed Countries (LDCs)—the world’s poorest nations—that discussed how to speed up entry into the World Trade Organization (WTO) and deal with globalization. “Cambodia is a member of non-aligned movement. Within the principle of agreements it would increase its diplomatic relationship with other nations, and set up embassies within its financial and human resources. Cambodia with high respect to humanity would conduct itself to be a good member of the United Nations. To solve the problem of illegal immigrants, Cambodia would utilize its immigration law that enshrines the principle set forth in the Universal Declaration on Human Rights. The Royal Government of Cambodia is very grateful tothe international communities for their contribution, peace, democracy and prosperity in Cambodia. ~
Khmer-Rouge-Backed Government Represents Cambodia at the U.N. in the 1980s
In the 1980s the two Cambodian regimes continued to compete for respect and for legitimacy, and they both continued to proclaim a foreign policy based on peaceful coexistence, neutrality, and nonalignment. The CGDK, however, had the major share of international recognition as de jure representative of Cambodia, even though it did not possess supreme authority within the borders of Cambodia. De facto control of national territory was in the hands of the PRK, but, because the PRK had originated during the Vietnamese invasion and occupation of Cambodia, it was unable to gain legitimacy in the eyes of the United Nations. The United Nations would not validate an illegal act consummated by force of arms. Recognizing the PRK regime would be contrary to the UN Charter, which calls for peaceful settlement of all conflicts and for nonintervention in the internal affairs of sovereign and independent nations. In July 1982, the Phnom Penh regime, recognizing the futility of challenging the legality of the CGDK, announced that "in the immediate future" it would not seek "to reclaim the Kampuchean seat at the United Nations." [Source: Library of Congress, December 1987 *]
The CGDK had formal diplomatic relations at the ambassadorial level with Bangladesh, China, Egypt, Malaysia, North Korea, Pakistan, Senegal, Somalia, Sudan, and Yugoslavia (as of late 1987). Chinese and North Korean relations with the coalition occasionally were in the limelight in the 1980s--Chinese relations because of China's role as the principal donor of material and military assistance to the CGDK, and North Korean relations because Sihanouk maintained his "private" residence in Pyongyang (a palace built for him by the president of North Korean, Kim Il Sung, in the early 1970s). Bangkok also was mentioned frequently in Cambodian foreign affairs because it had hosted meetings of CGDK leaders with Chinese and Thai officials regarding events in Indochina. Bangkok was also the site for the Office of Samdech Norodom Sihanouk's Personal Representative for Cambodia and Asia, which was headed by Sihanouk's son Prince Norodom Ranariddh. This office was Sihanouk's informal embassy.*
The CGDK had a permanent mission--consisting of representatives from all three of the CGDK partners--to the United Nations in New York. In formal debates in the UN General Assembly, however, the chief delegate of the Khmer Rouge group represented the CGDK because the coalition's June 1982 agreement said that the diplomatic envoys of Democratic Kampuchea who were in office at that time would remain in their posts. The permanent mission became active each September during the UN General Assembly's opening session. Mission representatives sought to obtain reaffirmation of the General Assembly's September 1979 resolution calling for an unconditional withdrawal of "foreign" (Vietnamese) troops from Cambodia and for Cambodian self-determination free of external constraints. In 1979 ninety-one nations backed the resolution, twenty-one nations opposed it, and twenty-nine abstained. In 1987 although 117 nations reaffirmed the same resolution, the number of countries which opposed it remained essentially unchanged. Some countries, such as the United States, supported resolutions but did not recognize Democratic Kampuchea, the CGDK, or the PRK. Britain and Australia withdrew recognition of Democratic Kampuchea in December 1979, and in October 1980, respectively, but both supported the CGDK's effort to get the Vietnamese troops out of Cambodia and to determine its future freely under UN supervision. *
Following its establishment, the primary foreign relationships of the PRK were those with Vietnam, Laos, the Soviet Union, and the countries of Eastern Europe. The PRK had only one resident mission in a noncommunist state, the one in India. The PRK also maintained diplomatic relations with about twenty other Third World nations, including Afghanistan, Angola, the Congo, Ethiopia, Libya, Madagascar, Mozambique, Nicaragua, and Panama. In 1980 about thirty countries recognized the PRK; seven years later, that number had not changed. In 1987 nearly eighty countries recognized Democratic Kampuchea. *
Diplomacy and Efforts to Bring Peace to Cambodia in the 1980s
The most intractable foreign policy question facing the rival Cambodian regimes in the 1980s was that of how to establish an independent, neutral, and nonaligned Cambodia under a set of terms agreeable to all those, both at home and abroad, who were interested. Despite differing perceptions of potential gains and losses, all parties to the Cambodian dispute were striving for reconciliation. This was a positive sign, especially because in 1979 and in 1980, no one, except perhaps Sihanouk, believed that reconciliation was possible. [Source: Library of Congress, December 1987 *]
In the first two years of the Cambodian crisis, the rival Cambodian regimes had different priorities. The Heng Samrin regime's overriding concern was to consolidate its political and its territorial gains, while relying on the Vietnamese to take the lead in foreign affairs and in national security. The political price of this external dependence was high because it contributed to Phnom Penh's image as a Vietnamese puppet. Vietnam also paid a price for its assertion that it had intervened only "at the invitation" of Heng Samrin "to defend the gains of the revolution they have won...at a time when the Beijing expansionists are colluding with the United States." Phnom Penh and Hanoi also asserted speciously that political turmoil inside Cambodia constituted a civil war and was, therefore, of no concern to outsiders. Vietnam's attempts to shield the Cambodian crisis from external scrutiny led its noncommunist neighbors to suspect that Hanoi was finally moving to fulfill its historical ambition of dominating all of Indochina. *
Anti-Heng Samrin resistance groups pursued an opposite course. Their strategy was to internationalize the Cambodian question--with political support from China and from the ASEAN nations--as a case of unprovoked Vietnamese aggression, in order to put pressure on Vietnam and to undermine the legitimacy of the Heng Samrin administration. At the same time, the resistance groups sought to destabilize the Heng Samrin regime by challenging the Vietnamese occupation forces. The regime in Phnom Penh, with support from Vietnam and from the Soviet Union, nevertheless continued to consolidate its gains. *
In 1981 the rival camps pressed on with their confrontational tactics. The anti-Vietnamese resistance factions, despite their long-standing, internal feuds, began to negotiate among themselves for unity against their common enemy. On the diplomatic front, they worked closely with ASEAN to convene the UN-sponsored International Conference on Kampuchea, which took place from July 13 to July 17, 1981, in New York. The conference, attended by representatives from seventy-nine countries and by observers from fifteen countries, adopted a declaration of principles for settling the Cambodian crisis. The central elements of the declaration were those contained in the UN General Assembly resolution of 1979 and in the proposals for Cambodian peace announced by the ASEAN countries in October 1980. The declaration called for the withdrawal of all foreign forces in the shortest possible time under the supervision and the verification of a UN peacekeeping-observer group; for arrangements to ensure that armed Cambodian factions would not prevent or disrupt free elections; for measures to maintain law and order during the interim before free elections could be held and a new government established; for free elections under UN auspices; for the continuation of Cambodia's status as a neutral and nonaligned state; and for a declaration by the future elected government that Cambodia would not pose a threat to other countries, especially to neighboring states. *
The declaration also called on the five permanent members of the UN Security Council (China, France, the Soviet Union, Britain, and the United States) and on all other states to pledge to respect Cambodia's independence, its territorial integrity, and its neutral status and to declare that they would neither draw Cambodia into any military alliance, nor introduce foreign troops into the country, nor establish any military bases there. The declaration's principles were reaffirmed in successive UN General Assembly resolutions, and they formed the basis of the ASEAN-sponsored framework for resolving the Cambodian question in the 1980s.*
See Paris Peace Agreement in 1991 and United Nations Peacekeeping Effort in Cambodia, History
Foreign Aid and Development in Cambodia
Foreign aid had made up around half of Cambodia’s national budget. The aid has come mostly from Western countries, China, Japan and organizations like the World Bank. Top U.S. aid recipients in 2002: 1) Afghanistan ($1.8 billion): 2) Mozambique ($1.06 billion); 3) Rwanda ($443 million); 4) Cambodia ($342 million); 5) Lebanon ($164 million).
In 1997, foreign donations made up about half of Cambodia’s $600 million national budget. Donor nations pledged to give Cambodia $470 million in 1999. Cambodia asked for $1.8 billion for 2005 to 2007.
In December 2004, a meeting of donors pledged $504 million in assistance to Cambodia despite criticizing the Phnom Penh government for corruption, wasting money nd stunting Cambodia’s development. There was no donor meeting in 2005.
In March 2006, donors pledged $601 million in assistance to Cambodia despite concerns that the Phnom Penh government had done little to curb endemic corruption. The donors said they were encouraged by gestures made by Prime Minister Hun Sen towards political opponents. The Hun Sen government got more money than it projected it would get. The largest pledge, $164 million, was from the European Union. The second was was $114.7 million from Japan.
In June 2007, donors pledged $689 million in assistance to Cambodia while scolding the Hun Sen government for failing to tackle corruption. This time China pledged $91.5 million. It was the first time in participated in the pledging process.
Rural development projects underway in Cambodia include introducing Internet-ready computers with solar panels and satellite dishes for school children, opening up lucrative pig farms, helping women sell silk scarves they produce at home, and supporting a soy milk factory staffed by abandoned women. I met a Canadian who worked for an aid agency on granting land titles to villagers. He said the Khmer Rouge did good irrigation work and said that Cambodians don't worship animals when I asked him about animism.
NGOs in Cambodia
The number of NGOs in Cambodia rose from 12 in 1990 to around 360 in the mid-2000s. NGOs have sort taken up the role of a shadow government, providing many services that governments usually provide and applying political pressure to make changes. They are involved in everything from digging wells to helping abused women to providing job training. Swiss-funded hospitals offer free treatment to villagers.
Japan-based Hope International runs a variety of microcredit programs. Among them is one that provides short loans to villagers to buy cows or rent them to fertilize and plough their fields. If a calf is born to villagers the calf becomes their profit and the returned cow is a “paid back” loan. In Japan the charity host dinners to fund the project. NICCO is a Kyoto-based organization established in 1979 ago by homemakers and students to support Cambodian refugees. However, its activities attracted many other supporters by employing unusual training methods such as teaching farmers how to use human waste as fertilizer.
Seth Mydans wrote in the New York Times, “Over the years, these groups have embedded themselves in Cambodian life, where, particularly in isolated communities, they often represent people who distrust the police and fear powerful officials. "Look at the grass roots, what can people do?" said a Cambodian reporter. "If there is a land grab, they don't go to the police first," he said. "They go to Adhoc or Licadho" - two prominent human rights groups. "In the village, if a husband beats his wife, she runs to Adhoc, not to the police," he said. "So the government does not enjoy the way these two groups help people fight for their rights, for freedom and justice." [Source: Seth Mydans, New York Times, January 10, 2006 <>]
See Health Care, Human Rights, Crafts
Cambodia, ASEAN and Its Southeast Asian Neighbors
Cambodia's boundaries are for the most part based upon those recognized by France and by neighboring countries during the colonial period. The 800-kilometer boundary with Thailand, coincides with a natural feature, the watershed of the Dangrek Mountains, only in its northern sector. The 541-kilometer border with Laos and the 1,228-kilometer border with Vietnam result largely from French administrative decisions and do not follow major natural features. Border disputes have broken out in the past between Cambodia and Thailand as well as between, Cambodia and Vietnam. [Source: Library of Congress, December 1987]
Cambodia joined ASEAN in April, 1999. It had been slated to join earlier but an invitation to join was revoked after the 1997 coup. Phnom Penh hosted an ASEAN region forum meeting, attended by U.S. Secretary of State Colin Powell, in June 2003. Phnom Penh hosted the 20th ASEAN summit meeting in April 2012.
Cambodia took the rotating chairmanship of ASEAN in 2012. This occasion marked the 10th anniversary of Cambodia chairing ASEAN the first time, in 2002. According to the Cambodian government, “Cambodia, as chair of ASEAN, in close cooperation and with the support of all member countries, has continued to work on ASEAN’s current priorities to push forward a dynamic integration toward realizing the ASEAN Community by 2015...Cambodia’s admission was a truly historic moment, fulfilling the vision of ASEAN’s founding fathers to unite all nations in Southeast Asia under the ASEAN roof. The realization of “ASEAN-10” has not only a symbolic significance, but also immense implications for the cause of the regional unity and solidarity in accordance with the principles of mutual respect, equality and noninterference in its member countries’ internal affairs.
Relations with Thailand
There is some bad blood between Thais and Khmers. Their ancient civilizations, Siam and the Angkor, battled one another. Cambodians accuses Thais of acting superior and looking down on them. They also resent the Thais for not acknowledging the impact of Khmer civilization on their culture. One American scholar told the Washington Post, “There is this inferiority complex and the resentment that spreads. I have perfectly reasonable friends who become irrational when they talk about Thailand.”
Thailand and Cambodia share an 800-kilometer border. There have been a number of disputes over land and sea borders on different places. There are hundreds of thousands of Cambodians working illegally in Thailand. Many Thais come to Cambodia to gamble in the casinos and nightclubs set up near the border.
Thailand is significantly richer than Cambodia. The average income in Cambodia is about one seventh of that in Thailand. Thailand dominates the Cambodian economy. Thailand supplies Cambodia with nearly all of its perishable goods and large quantities of food and fuel. Thai fashion, film music and television inundate Cambodia.
The rail link between Thailand and Cambodia was cut in 1962 in a dispute over a Buddhist temple and was never restored. Many of the bridges on the route have been destroyed or are too old to use and the bed has long since been relieved of it gravel and rails. To restore the rail would cost tens of millions dollars.
Attack on the Thai Embassy
In January 2003, massive anti-Thailand riots broke out in Phnom Penh and the Thai embassy and Thai businesses were attacked and burned by mobs after a rumor—that was false—was spread that a popular Thai television actress Suwanna “Kob” Konying said that Angkor Wat belonged to Thailand. One Thai was killed in the attacks an seven were injured. Looters ransacked the embassy and some of the businesses attacked by the mobs.
Rioters burned effigies of the Thai king and insulted him. The Thai ambassador fled for his life by jumping over the embassy wall. The actress at the center of the storm was moved to a safe house. Pictures of Thai pop singers were ripped out of magazines. Shows with Thai actors were yanked off the air. Radio stations stopped playing Thai music. Hun Sen said that Suwanna was “not even worth a blade of grass at Angkor.”
The Thai government evacuated hundreds of frightened Thai citizens by air, recalled its ambassador from Phnom Penh, closed it border with Cambodia and cut off economic and technical assistance of Cambodia. Thai Airways canceled all its flights to Cambodia. Thai authorities condemned the Cambodian government for doing little to try and stop the attacks.
The Cambodian government apologized for the attacks and offered to pay compensation for damage caused by them and arrested 151 people who were involved in the rioting. A Cambodian newspaper that first published the alleged comments by the actress admitted printing the story based on rumors. The editor of the newspaper and a radio boss was arrested for reportedly inciting people to riot. The incident ended three months after it began when $50 million was paid on compensation to Thai businesses and the Thai ambassador was welcomed back to Phnom Penh. Thai officials moved back into the embassy in February 2004.
Thaksin in Cambodia
In November 2009,Thaksin was appointed as an economic advisor to the Cambodia government. "Thaksin has already been appointed by royal decree... as personal adviser to Cambodian Prime Minister Hun Sen and the adviser to the Cambodian government in charge of economy," said a government statement read on television. "Allowing Thaksin to stay in Cambodia is virtuous behaviour...good friends need to help each other in difficult circumstances," it added. [Source: AFP, November 4, 2009]
The Thai government requested that Cambodia extradite Thaksin to Thailand. Hun Sen called Thaksin a “political victim” and was welcome in Cambodia. He said, “I would like to assure Thaksin and his supporters that Hun Sen will be his friend forever.” The statement by the Cambodian government called charges against Thaksin "politically motivated" and vowed not to extradite him if he "decides to stay in Cambodia or travels in and out of Cambodia in order to fulfill his duties". AFP reported: “Hun Sen stoked up tensions with Thailand in October 2009 when he first offered Thaksin refuge in Cambodia and then marred a summit of Asian leaders by saying he had offered him the job as economic adviser. Thailand said that the appointment was an internal matter for Hun Sen's government but it would push for the extradition of billionaire Thaksin if he sets foot in Cambodia.
In response to criticism about his appointment Thaksin said he had a lot to offer Cambodia. “A prosperous neighbor means better opportunities for us to grow together,” Thaksin said. “Of course not all my compatriots see it that way right now. Their domestic political compulsions force them to false patriotism.
A Thai man was given a jail sentence of seven years for spying for passing Mr Thaksin's private flight details to Thai diplomats while the former PM was on a visit to Cambodia. The Thai man 31-year-old Siwarak Chothipong, was freed a few months later after being pardoned by Cambodian King Norodom Sihamoni
The appointment of Thaksin as an advisor to the Cambodian government set off a diplomatic row with Thailand and Cambodia each recalling their ambassadors from each other’s country and Thailand threatening to seal the border between Thailand and Cambodia. Thaksin resigned from his post as advisors to Cambodia in September 2010 nine months after he took the positions as personal advisor to Cambodia, Prime Minister Hun Sen and economic advisor to the Cambodian government.
In September 2011, Thaksin visited Cambodia two days after Cambodia hosted Thaksin’s sister, Thai Prime Minister Yingluck Shinawatra. Thaksin and Hun Sen hugged one another and addressed each other as “brother.”
Relations with Vietnam
Cambodia and Vietnam officially began demarcating their contentious border in September 2006, in a bid to end decades of territorial disputes. The 1,270km (790-mile) border has remained essentially unmarked and vague since French colonial times, with stone markers and boundary flags having disappeared, while trees once lining it were cut down. When a new border line was agreed by the two governments, some Cambodians lost their land. [Source: BBC]
See Sam Rainsy
See Montagnards, Minorities, Vietnam
Nearly 100 Vietnamese hill-tribe people seeking asylum in neighboring Cambodia were told they will be deported back to their home country, U.N. refugee officials said. Nearly 700 Montagnards have been living under U.N. protection in the Cambodian capital since they fled Vietnam's Central Highlands in 2004 during a government crackdown prompted by mass protests against land confiscation and restrictions on religious freedom. [Source: Miranda Leitsinger, Associated Press, July 19, 2005]
Relations with Myanmar and North Korea
The leaders of Cambodia and Myanmar have periodically visited each other’s country. Both countries are members of ASEAN and both have been sharply criticized for their human rights record.
Cambodia is about the only country in the world in which North Korea has some influence. When Cambodia's King Sihanouk was driven out of the country he was protected and given a luxurious villa by North Korean dictator Kim Il Sung. When the king returned to Cambodia in 1991 he was transported by a North Korea airliner and accompanied by North Korean bodyguards. The king has remained loyal to North Korea. When someone suggested that maybe Cambodia should set up diplomatic relations with South Korea, the king barked "Not until I'm dead."
Leaders and top officials from North Korea and Cambodia periodically visit each other’s country
See King Sihanouk and New King
Relations with Japan
The first recorded contact between Japan and Cambodia was a pilgrimage from Morimoto Ukondayu of Kumamoto, Japan to Angkor in 1682 to pray to the Buddha for his father’s happiness. Later Japanese merchants and merchants set up a town in the Ponhea district of Kandal Province at the confluence of the Mekong and Bassac Rivers.
Japan and Cambodia established diplomatic relations in January 1953 on the eve of Cambodia’s formal declaration of independence from France. Japan has an embassy in Phnom Penh. Diplomatic ties were severed in April 1975 following the takeover Phnom Penh by the Khmer Rouge and re-established again in 1994.
Following independence from France on Nov. 9, 1953, Cambodia announced in 1954 that it renounced the right of the state to ask for compensa-tion for damages caused by the invasion of the Japanese Army in Cambodia during the World War II. In 1955, during the visit to Japan of King Norodom Sihanouk, the House of Representatives passed a resolution of thankfulness for Cambodia’s renouncement of compensation. The Japan-Cambodia Treaty of Amity was then signed by King Norodom Sihanouk and Foreign Minister Aoi Shigemitsu. The prime minister at the time was Ichiro Hatoyama, the grandfather of Yukio Hatoyama, who was prime minister of Japan in 2010.
King Norodom Sihamoni was born on Thursday May 14, 1953, in Phnom Penh. As his birthday May 14 was the date on which his father returned to Phnom Penh from his visit to Japan, Sihamoni was nicknamed ‘Tokio.’ For Japan, King Norodom Sihamoni’s father’s visit to the Imperial Palace was the first by an Asian king after World War II.
Japan played a prominent role in the negotiations that led to Paris International Conference on Cambodia in October 1991 that led to a signing of the Paris Peace Agreements on Cambodia. Japan sent peacekeepers to Cambodia and has helped fund and provide expertise build bridges, roads, ports, schools, water treatment facilities, electrical systems, hospitals and other infrastructure. A $56 million bridge linking Phnom Penh to eastern Cambodia is known in Cambodia as “the Japanese bridge.” Japanese archeologists have helped rebuild and restore temples in the Angkor area.
When Japan sent peacekeepers to Cambodia in the 1990s it was the first time Japan dispatched troops overseas since World War II. Through much of the 1990s and 2000s Japan was the largest donor in Cambodia. Japan has contributed millions of dollars to the Khmer Rouge tribunal and a Japanese judge sits on the supreme court that is presiding over the trial.
Cambodia’s first bridge across the Mekong River and the largest bridge in the country, opened in the early 2000s near the town of Kampong Cham. Funded by the Japanese, it is 1.36 miles long and cost $56 million. It links eastern and western Cambodia and makes road travel between the two regions possible for the first time. The bridge took thee years and a labor force of 10,000 people to build. Before it was completed people relied on flimsy ferries to get across the river.
The Chroy Changvar Bridge (the Cambodia-Japan Friendship Bridge) was originally constructed in 1966. During the war from 1973 to 1975 Khmer Rouge forces mined it twice and destroyed large portions if it. When Phnom Penh was abandoned in April 1975, the bridge was neglected has been abandoned without taking care or repairing the damages from the war. After the liberation on 7th January 1979, mixed provincial and municipal population, returned to live in Phnom Penh and the government started to rehabilitate the infrastructures in Phnom Penh that has been damaged from the war and abandonments. However, the bridge would not be constructed due to the financial constraint. But in 1995 the government got the donation of the Japanese government to reconstruct this bridge and the Japanese engineers repaired it.
Trade, Aid and Business from Japan
Trade is sizable between the two countries: Japan to Cambodia: 14.0 billion yen (2006); Cambodia to Japan: 9.5 billion yen (2006) Japanese investment in Cambodia includes Phnom Penh Commercial Bank, a joint venture of Hyundai Switzerland and Japanese SBI Group, opened in 2008. Japanese companies that have invested in Cambodia have included Mitsubbishi, Toyota, Toshiba, Mitsui Oil Exploratio, Idemitsu Oil & gas, Ajinomoto and Maruhan.
Since 1992, Japan has been the biggest donor to Cambodia, offering about $130 million a year. The Japanese Government has provided significant assistance for demining and education. In 2006, Japanese and Cambodian governments signed an agreement outlining a new Japanese aid program worth US$59 million. In 2009, Japan pledged about $3 million to Cambodia for a dam project.
Japanese companies employ 36,000 people in Cambodia. Japanese investment in 2011 as May was $211 million. Japanese companies have invested primarily in as electronics, home appliances, garments, sports equipment, medical goods and automotive parts that have reflected the royal government’s efforts in diversify- ing the country’s export-oriented products beyond the garment industry and agricultural commodities. Remarkably, Minebea Co., a major global Japanese manufacturer, built a factory assembling micro-motors in Phnom Penh this year with a capital investment of $59 million. AEON Co., a leading retailer in Japan, planned to launch a $150 mil- lion investment in Cambodia and will start to build the first- ever large department store in Phnom Penh in 2012. Japanese manufacturers already in Cam- bodia include Yamaha Motor Co., Suzuki Motor Corp., Ajin moto Co., and Sumitomo Wiring Systems Co. Other well-known Japanese assemblers have shown their interests in investing in Cambodia. The growing trend of Japanese investment reflects that more and more Japanese investors have acknowledged the great advantages of investing in Cambodia thanks to the kingdom’s political stability, potential of natural resources, low labor costs and geographical location in the center of the Southeast Asian region.
Takashi Kikuchi wrote in the Yomiuri Shimbun: “Cambodia's motorcycle market is expected to grow from about 100,000 units in 2006 to 350,000 units in 2015. Due to these expectations, a Cambodian subsidiary of Suzuki Motor Corp. started producing motorcycles in 1999. Though the subsidiary had previously imported fully assembled bikes from Thailand, it localized the assembling process because import tariffs on parts at 96 dollars is half those on fully assembled motorcycles. The subsidiary manufactured 35,000 units last year and plans to increase output by 10,000 units every year. Monthly salaries for the 65 plant employees range from 89 dollars to 140 dollars. Rikuo Watanabe, president of the subsidiary, said, "Labor costs account for a tiny portion [of the total cost]." [Source: Takashi Kikuchi, Yomiuri Shimbun, June 14, 2007]
Elsewhere, Toyota Tsusho Corp. formed a joint venture with local investors and constructed a plant in Phnom Penh that will start assembling Yamaha-brand motorcycles in July. The plant will obtain parts from a Yamaha Motor Co. plant in Thailand. Toyota Tsusho also operates another joint venture to import and sell Toyota Motor Corp. cars in Cambodia, aimed at a small but growing market among the country's population of 14 million.
For Japanese companies, Cambodia has the disadvantages of being sandwiched between promising investment targets--Thailand and Vietnam--and having a small population. Some Japanese companies also point out problems stemming from rampant bribery--a hidden cost in certain situations in the country. But investment in Cambodia has many merits.Foreign companies can be exempted from corporate tax for up to nine years with the approval from the Council for the Development of Cambodia.
Cambodia imposes no restrictions on foreign capital in most industrial sectors and its administrative systems are highly transparent. The Cambodian government also plans to set up 10 special economic zones across the country and has made efforts to have close contact with the private sector. Japanese manufacturers have begun looking for new investment locations to replace China, where labor costs have risen and the government started reviewing the preferential treatment of foreign capital.
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Tourism of Cambodia, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.
© 2008 Jeffrey Hays
Last updated May 2014