Friday, October 29, 2010

Price index shows rise in petrol, vegetables

CONSUMER prices increased nearly two percent in September this year, compared to the same month of last year, according to government figures.

The price of fuel, transport, and vegetables saw some of the largest increases in the basket of goods – a sample of 259 items observed mainly in five Phnom Penh markets, measured by the National Institute of Statistics at the Ministry of Planning.

The CPI was up by 1.9 percent in September, compared to the same month last year. Month on month, prices rose 0.7 percent over September, a lower rate than the 0.9 percent monthly rise in August.

Rebounding demand, met by increased imports, from an improving economy was the main reason behind the CPI increase, according to Neou Seiha, senior researcher at the Economic Institute of Cambodia.

Although rising prices may affect the Kingdom’s poorest, he said there was no cause for alarm. “Prices are increasing at a manageable rate,” he said.

One of the largest gains was gasoline, which climbed 12.2 percent in September 2010 compared to the same month last year. Other large gains were seen among leafy vegetables, which increased 8.6 percent, fish was up 7.9 percent, and confectionary such as sugar, and chocolate increased 12.4 percent by the end of the third quarter compared to the same date 2009.

Meanwhile, rice prices were down 1.9 percent, and wine prices fell 6.1 percent year on year.

Consumer prices over the first nine months of 2010 were 4.21 percent higher than prices over the same period of last year, according to the data.

(source from the phnompenh post newspaper, Thursday, 28 October 2010 15:00 May Kunmakara)

Tourism Ministry links with Oz university

THE Ministry of Tourism will receive assistance from Australia’s University of the Sunshine Coast to improve education standards and sustainable planning for the domestic tourism industry.

The two parties signed a memorandum of understanding at the public university in the state of Queensland earlier this week.

The deal will see Cambodia benefit from the University of the Sunshine Coast’s expertise specifically in eco-tourism planning, as well as training tourism professionals, according to ministry Chief of Cabinet Kong Solyda.

“The agreement has the potential to strengthen and improve professional skills of employees in the tourism sector in order to attract more local and international tourists,” he said yesterday.

Minister of Tourism Thong Khon was quoted as saying the partnership would be a key element in the Kingdom’s plan to build sustainable tourism.

“So far our government has made a lot of effort to protect and preserve our natural and cultural assets, but we need more experience,” he said at the event signing on Tuesday, according to a report from the Sunshine Coast Daily newspaper.

“That’s why we called for the assistance of the international community, especially the Australian government and USC, to support us on this matter.”

Bill Carter, a professor at the university, located around 100 kilometres north of Brisbane, said it would also benefit from the partnership by opening up research and business opportunities, and by creating a student-exchange programme between the two countries.

Australia was the ninth-largest source of visitors to the Kingdom over the first eight months of 2010, with 61,627 visitors arriving from down under, according to statistics from the Ministry of Tourism.

Meanwhile, Ministry of Tourism deputy director general Neb Samuoth said that Cambodia hoped to be included in a group called the “Most Beautiful Bay in the World Club”. He said the club’s director would be paying a visit to the Kingdom’s coastal regions from October 30 to November 5.

Cambodia’s “K4” coastal areas of Kampot, Kep, Koh Kong, and Kampong Som, or Sihanoukville, were all up for consideration, he said.

(the source from the phnompenh post newspaper, Thursday, 28 October 2010 15:00 Soeun Say)

Mobile warfare

TWO of Cambodia’s largest mobile operators – Metfone and Mfone – have blocked calls between their networks this week over a disputed US$500,000 fee payment, an official said yesterday.

The Kingdom’s second- and third-largest mobile operators respectively, as measured by government data on subscriber numbers, have taken turns blocking services since Tuesday, according to Mfone Chief Financial Officer Naruemon Sriphan.

The dispute arose over more than $500,000 in interconnectivity charges which Mfone believes was owed to it by Vietnamese military-backed Metfone, she said.

Interconnection fees are levied every time a call is made to a rival network.

Mfone claims that more Metfone subscribers had been using its network than vice-versa, due to activity from Metfone’s fixed-line “Methome” phones, resulting in the half-million-dollar fee, she said.

Earlier this month, after several months of follow-ups with regard to the money owed, Mfone informed the Ministry of Post and Telecommunications about the situation, she said.

The MPTC then sent a letter to Metfone asking for payment to avoid any service disconnection, but the warning again came without result, she said.

On Tuesday, Mfone blocked calls for a “few hours” from Metfone’s Methome fixed-line phones “as a warning”, after sending a letter to the MPTC last week to inform them of the action.

“Every step we took, we took with advice from MPTC,” said Naruemon Sriphan.

“Blocking is not good for anyone, especially for the customer. But it’s not fair to us, either, to continue providing services to the partner who never thought about paying the bill,” she said.

MPTC requested that Mfone reopen its network om Wednesday. But after unblocking calls, Mfone says, its competitor blocked all Mfone calls to the Metfone network.

The Post reporters tried without success to make cross-network calls early yesterday.

Full connectivity was restored at around 3pm yesterday, according to Naruemon Sriphan.

While Mfone has still not received the fee it claims it is owed, it hopes to collect it with support from the MPTC.

MPTC Director General Mao Chakrya declined to comment yesterday.

Metfone did not respond to written request for comment yesterday, which Mfone said was submitted during the period of blockage.

The dispute echoes a row last year that saw mobile operator Beeline accuse the Kingdom’s largest provider, Mobitel, of deliberately blocking calls.

The claims came after Mobitel officials accused Beeline of price-dumping.
(the source from The phnompenh post newspaper,Thursday, 28 October 2010 17:45 Jeremy Mullins)

Friday, October 22, 2010

Passenger train service in Kingdom set to resume

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Graphic by: Andy Ball
A map showing the mainland Southeast Asia’s railway network as it stands. A projected US$1.09 billion route linking Phnom Penh with Ho Chi Minh City could complete the connection of the region’s rail networks.
Railroad commissionaire Toll Royal Railways has held preliminary discussions with the government to begin passenger service on Cambodia’s railways.
The first line of the railway from Phnom Penh to Kampot was officially declared open at a ceremony held this morning, three weeks after freight services commenced to and from the costal province.
Toll Global Logistics CEO Wayne Hunt said that though freight remained the first priority of the company, a spirit of agreement had been forged between his company and the government as the two parties worked toward resuming passenger service.
“It will happen, it’s just a matter of time,” he said, but cautioned that the service would have to be demand-driven.
A steady increase in tourists would likely contribute to demand for the passenger service, he said.
“This is about putting Cambodia’s best foot forward now, for the opportunities that are here now.”
Toll Royal is 55 percent owned by Australia-based Toll Global Logistics, and 45 percent owned by The Royal Group, according to information from the firm.
Hunt said the new railway did not expect to jump to an immediate profit, but aimed to break even within two or three years.
The railway presently employs more than 150 people, which is slated to grow to between 600 and 700 when it’s at full capacity. The firm’s investment to date has been about $5 million in the first 12 to 15 months, he said.
The ADB has loaned some $84 million towards the rehabilitation of railway, which fell into disrepair during the Khmer Rouge era.
A loan of $13 million from the Organisation of Petroleum Exporting Countries’ development agency, and grants of $21.5 million from Australia, $2.8 million in kind from Malaysia, and $20.3 million from Cambodia have also been contributed to the project.
Ministry of Public Works and Transport secretary of state Tauch Chankosal said the now reopened Phnom Penh to Touk Meas stretch will be followed by the reopening of the full 254 kilometre Southern Line to Sihanoukville in 2011, and then the 388 kilometre Northern Line linking the capital to Poipet on the Thai border.
There was a 48 kilometre “missing link” between Sisophon and Poipet on the Thai border, he said.
Presently there is no link between Phnom Penh and Vietnam, one of the last connections required to complete the Singapore to Kunming Rail Link, but Tauch Chankosal said the Chinese government had stepped in to fund a survey on building the link.
The cost of the rail connecting the Kingdom to Vietnam has been pegged at $600 million but could change depending on what the Chinese survey finds, he said.
The Asian Development Bank said the Singapore to Scotland link could be completed as early as 2015 in a statement.
ADB transport economist Peter Broch said Cambodia and the rest of Southeast Asia operated on different gauge rails than China and India, though he did not consider this a major obstacle.
“That’s a problem that can be solved on the border where the problem is,” he said.
(source from the phnom penh post newspaper, Thursday, 21 October 2010 12:09 Jeremy Mullins)

Cambodia's gold closer than ever to being mined

THE recent spate of Cambodia-focused gold mining firms seeking capital via initial public offerings is no coincidence. It is a sign miners and investors have regained an appetite for exploration and risk after a difficult period prompted by the global downturn. And Cambodia looks set to benefit.

Last year global expenditure on mineral exploration plummeted a staggering 42 percent on 2008, a sign mining companies were playing a waiting game amid low commodity prices and reduced financing options.

Cambodia was also affected, as noted by the Japan International Cooperation Agency in its February appraisal of Cambodia’s mining sector. Several mining projects were suspended, it said.

However, mining firms are now investing in exploration again, and Cambodia is due a large injection of capital.

Indochine Mining has announced it could raise up to US$24.5 million on the Australian Stock Exchange to invest in exploration in the Kingdom. Meanwhile, Brighton Mining reached its $2.16 million target after it was oversubscribed, a sign of investor appetite. Both will be followed by Liberty Mining, which announced plans this week for an IPO in Sydney. This is all capital that will be invested in finding gold among Cambodia’s 19 confirmed deposits, according to the most recent geological surveys.

OZ Minerals, which operates in the northeast of the Kingdom, has significantly ramped up investment in exploration this year. The firm spent just $11.48 million on total exploration in 2008, a figure that was raised to $16.6 million in 2009 and jumped to $56.9 million for this year, $8.53 million of which will be spent in Cambodia.

Whether this increased investment will lead to a shorter timetable for gold production in the country remains to be seen, but the opportunities surely increase.

Liberty, for example, has stated it is five to 10 years away from a commercial resource, meaning OZ Minerals and Southern Gold remain the frontrunners – both have said this year they expect to produce within the next three to five years.

Greater investment by the likes of OZ Minerals can only aid exploration. The firm announced in mid-March that it had discovered an inferred gold resource of 600,000 ounces at its Okvau concession in Mondulkiri. To start production, OZ has said it would need to identify more than 2 million ounces, a process that has already started with further exploration. Although third-quarter drilling led to poor results on the first attempt, a further two drillings are planned for the fourth quarter at this site, and results from seven drillings just 16 kilometres from the main Okvau resource are due.

Had OZ not raised spending on investment this year, this activity would be a great deal slower.

The chance of finding a resource fit for commercial production is therefore rising significantly, even though the country’s low level of geological mapping makes the task more difficult.

After numerous false starts, the hope is this increasing investment in gold exploration will mean Cambodia can more quickly join the likes of neighbouring Laos and make the most of what appear to be abundant mineral resources.

Thursday, October 21, 2010

Kingdom's property insurance sector still in its infancy

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David Treal, managing director of AG Cambodia, at his office in Phnom Penh. Photo by: Rick Valenzuela
Cambodia’s draft law on property has paved the way for foreign ownership in the real estate sector, but despite the fact that their home countries often require property owners to buy insurance, few foreign owners in the Kingdom are opting in.

David Treal, managing director of AG Cambodia, an insurance company that caters to expatriates, says that the owners of big companies are the only people currently buying insurance. “When you see the kind of problems you can get into,” he said, buying insurance makes sense for small business and homeowners as well.

Foreigners have a higher likelihood of being held accountable for problems such as fire or injuries that arise on their property, said Treal. Yet, there is an abiding lack of confidence among property owners that insurance will actually protect them in these situations, explained Sung Bonna, the CEO of Bonna Realty Group and president of the National Valuers Association.

“People are starting to trust insurance more, but insurance companies themselves have to do more (to earn that trust),” he said, adding that the lack of exposure to potential Cambodian clients is another issue.

The notion that foreigners must mitigate their particular risk of being held liable for damage or accidents that occur on their property is difficult to support, according to Mathew Rendell, a senior partner to Sciaroni & Associates. Replying by email to questions about the importance of insuring yourself against liability claims, he wrote “I am not aware of any such lawsuits here in Cambodia.”

The banking sector, which was in a similar position earlier this decade, is an example of what better regulations and more trust could do for the insurance industry, said Sung Bonna. Private wealth expanded rapidly, however due to a lack of faith in the system, banks did not immediately benefit. Improvements in regulations inspired more trust and now the sector is thriving.

Future improvements in the regulations around insurance could provide a similar boost and give Cambodians in particular a better understanding of its value with little past exposure to the product. Sung Bonna mentioned that he has never actually heard of an insurance company paying back owners for a fire, suggesting a lack of activity in the sector.

With particularly low demand, insurance companies are trying to attract clients to their product by touting affordability. Non-portables, such as furniture, televisions and desktop computers in a rented apartment in downtown Phnom Penh can be insured against fire, flooding or storm damage for as little as US$10 per month, Treal said. A similar policy in America costs over $50 a month.

Home insurance is also relatively cheap, costing $60 to $1,000 per month depending on the value of the home and the level of protection. AG Cambodia is also gearing their products towards expat interest. Burglary insurance guarantees that the company will reimburse the owner for the value of lost items minus a $500 deductible.

The weak infrastructure for investigating lost possessions in Cambodia has prevented insurers like AG from insuring lost or stolen portable items, and even companies like Infinity Insurance, who do provide a portable product insurance package, has policies that cover a relatively narrow scope of crimes. Hann Sophat, a senior sales executive at Infinity, said that clients would still be responsible “if you take your computer into your car and someone breaks in and steals it.”

There is also insurance available for a wide range of threats to automobiles, aviation equipment, marine cargo, construction projects and people in the workplace, according to industry representatives. One thing that isn’t covered is tuk-tuks, which are seen as falling outside the parameters of what can be reasonably insured.
(source from the phnom penh post newspaper, Thursday, 21 October 2010 15:00 Julie Masis)

Bangkok to vote on border

Thailand’s parliament is set to approve the latest round of border negotiations with Cambodia, a move that could bring the neighbours closer to resolving long-standing differences over their shared boundary.
Thai Prime Minister Abhisit Vejjajiva told a delegation of visiting Cambodian journalists in Bangkok that debate on the minutes of three Joint Border Committee meetings would likely open at the Thai parliament next Tuesday.
Negotiations of the bilateral JBC have been stalled since April of last year pending the Thai parliament’s approval of the latest agreements.
“We’re just hopeful that the endorsement of the agreed minutes will pave the way for the future work of the JBC, which should help address the border issues in a comprehensive manner,” Thai Ministry of Foreign Affairs deputy spokesman Thani Thongphakdi said.
At the previous three JBC and foreign minister meetings, Thailand and Cambodia agreed to undertake joint demining and demarcation projects along the border near Preah Vihear temple, and to redeploy troops in the area in a bid to ease tensions.
At least seven soldiers have been killed in clashes in the area since 2008.
Prime Minister Hun Sen said in a speech last week that the approval of the JBC negotiations and the withdrawal of Thai troops near the temple would yield a swift resolution of the countries’ disagreements.
“If the troops are redeployed from that area, it is finished,” Hun Sen said. “We can reopen the border gate [near Preah Vihear temple] and there will be no problem.”
In August, the Thai parliament delayed a vote to approve the negotiations, prompting charges from Cambodian officials of stalling tactics.
Thani cautioned that the approval could be delayed depending on other business facing Thai legislators.
“The issue has been submitted to the parliament to add into its agenda, so it’s on the agenda, but there are a couple of other outstanding issues before we get to this particular issue,” he said.
Senior minister Var Kimhong, Cambodia’s top border negotiator, noted that such votes had been delayed several times before, and said he would wait to see the official vote before commenting on future negotiations.
“I cannot give any predictions now, but if they approve, then we will look into the issue and work together,” Var Kimhong said.
Information Minister Khieu Kanharith was set to return from Thailand yesterday after leading the visiting delegation of Cambodian journalists, who had audiences with Abhisit and Thai Foreign Minister Kasit Piromya. With the trip, Khieu Kanharith became the first government minister to visit Thailand since bilateral relations warmed in August after the resignation of fugitive former Thai premier Thaksin Shinawatra from his advisory position with the Cambodian government.
In an interview with the Bangkok Post, Khieu Kanharith warned against allowing technical issues in the demarcation process to sour the countries’ relationship.
“We need a long-term solution to border issues,” he said.“But we should start with the personal relationships between the prime ministers, information ministers and the journalist associations.”
“We can leave border demarcation to specialists in that job, and we have a joint border commission. Do not rub salt into the wounds. Prime Minister Hun Sen agrees with this.”
ADDITIONAL REPORTING BY JAMES O’TOOLE
(source from the Phnom Penh post newspaper, Wednesday, 20 October 2010 22:17 Cheang Sokha)

Tuesday, October 19, 2010

Island building: Koh Puos sales office on the way

THE firm behind the US$1 billion development on Koh Puos, off the coast of Sihanoukville, will open a sales office and showroom in Phnom Penh early next month, in preparation for launching sales at the island resort.

Located in the PGCT Centre at the intersection of Sothearos and Sihanouk boulevards, the office is being assembled, and is already staffed by a handful of employees, according to Saing Heng, assistant to Koh Puos project director Andrew Halturin.

“We have yet to set prices, but we will begin costing and selling units on Koh Puos for December,” he said.

The massive $1 billion “exclusive” development has been planned since 2007. Phase 1 of villa construction and infrastructure development on the island is set to begin in November.

In July, Halturin told the Post the first phase consisted of residential seafront villas and low-rise apartments buildings, as well as island utilities, infrastructure and a ring road.

Future phases will see hotels, a casino, and other venues are to be developed in separate steps from 2011 to 2016, according to the project’s plans.
Andrew Halturin has said the purpose of Koh Puos development was to create a world-class recreational resort.
(source from the phnompenh post newspaper, Tuesday, 19 October 2010 15:00 Soeun Say)

Plug pulled on Mobitel money transfers

An international association of mobile operators has suspended grant payments to fund Cambodia’s largest service provider Mobitel’s money transfer service following regulatory concerns.
In May, the GSM Association (GSMA) announced Mobitel’s parent firm CamGSM had been awarded a grant under its US$5 million Mobile Money for the Unbanked (MMU) program largely backed by the Bill and Melinda Gates Foundation.
Mobitel launched its Cellcard Cash money transfer service in late September.
The amount of money awarded to the provider has yet to be disclosed.
Officials have since said service began without oversight from the National Bank of Cambodia, as mandated in an August prakas.
The central bank stated last week it would act to ensure its laws were followed.
GSMA has now suspended grant payments until the situation is resolved, according to a statement obtained by the Post.
The association said that CamGSM was working with the NBC to develop the appropriate regulatory framework and secure a formal licence.

“To this end, the two parties have agreed to suspend the payment of further grant monies until the GSMA MMU Fund Panel is satisfied that CamGSM has secured all necessary regulatory approvals,” it said.

“GSMA encourages dialogue between mobile money providers and regulators, however regulation is a matter for the government in each country in which such services are developed.”

Mobitel Chief Operations Officer Kay Lot and Chief Executive Officer David Spriggs declined to comment on the oversight issue. Kith Meng, chairman of CamGSM owner Royal Group, also declined comment.

NBC Director General Tal Nay Im said there were no developments following statements made last week.

Despite the controversy, GSMA remained enthusiastic about the future of banking via mobile phone in the Kingdom.

Cambodia was ideally positioned to benefit from mobile money transfers, as fewer than 4 percent of people have bank accounts, its statement said.

Cellcard Cash’s two competitors, money-transfer service Wing, and ACLEDA Bank’s Unity mobile banking service, both function with oversight by the National Bank of Cambodia.
(source from the PhnomPenh post newspaper,Monday, 18 October 2010 21:13 Jeremy Mullins)

Campu's parent firm to focus on Kingdom

THE parent company of Campu Bank said yesterday its overseas expansion plans were focused on Cambodia and Hong Kong, after recording a 22 percent rise in global profit for the third quarter.

Malaysia-based Public Bank Group’s net profit in the third quarter reached 782.7 million ringgit (US$253 million), a marked increase on the 639 million ringgit recorded in the same period of last year, according to a stock exchange filing yesterday.

Its nine-month profit to September 30 totalled 2.2 billion ringgit (US$710.1 million), 20 percent up from 1.84 billion ringgit a year ago.

The bank attributed improved performance mainly to a 13.7 percent annualised growth in its loan book “in tandem with the improved economic conditions in the country”, the chairman Tan Sri Dr Teh Hong Piow said in a statement.

Loans for the last nine months were 151.73 million ringgit, already eclipsing the 2009 total of 137.6 million ringgit, of which Campu Bank’s contribution was 1.73 million ringgit.

A previous corresponding figure was not provided, but its 12-month total last year was 2.08 million ringgit.

The chairman said that “expansion plans in overseas operations remains focused on Hong Kong and Cambodian operations”, after noting a 14 percent increase in earnings contribution from its offshore businesses. Public Bank also has operations in China, Vietnam, Laos and Sri Lanka. It is set to open its 21st Campu Bank branch by the end of the year, Teh said, while adding two more Hong Kong branches in addition to the 81 now open.

Campu Bank chief Phan Ying Tong declined to comment yesterday, stating that he was not authorised to talk to media.

Last month, the bank cut its loan rate to 6 percent for new customers, sparking concerns of a pricing war among lenders in the Kingdom.
(source from the phnompenh post newspaper,Tuesday, 19 October 2010 15:01 Jeremy Mullins)

Cambodia, China to sign rice-export deal

THE Cambodian government is set to sign a deal with the Chinese government for rice exports later this week, according to Prime Minister Hun Sen.

Speaking at a graduation ceremony at Phnom Penh’s International Institute of Cambodia’s University of Technology, the Prime Minister said yesterday that the rice agreement would help to cement the Kingdom’s trading ties with the world’s second-largest economy

“We have begun actively negotiating with the Chinese in order to boost rice exports,” he said.

“China is also the main rice importer from Thailand and Vietnam.”

The People’s Republic is a largely untapped market for Cambodian exports, according to Hun Sen.

“We will export rice, and then cassava and other agriculture products,” said Hun Sen.

Council for National Economy deputy director Sun Kunthor said the deal would be signed Friday in Phnom Penh.

The size of the rice exports and dates of the shipments to China would be revealed at the signing event, he said.

Qian Hai, spokesman and second secretariat of the Chinese Embassy in Phnom Penh, confirmed yesterday that the agreement signing would be held this week along with the release of more specific figures.

“So far we do not know the total of how much rice will [be] exported to China from Cambodia,” he said.

Cambodia has recently updated its rice policy.

On August 17, Hun Sen targeted increasing Cambodia’s exports of the grain to a million tonnes by 2015.

The premier has also previously announced that the government would guarantee 50 percent of commercial bank lending to rice producers.
ADDITIONAL REPORTING BY SAM RITH

Saturday, October 16, 2010

Brothel owner gets 10 years

SIEM Reap provincial court yesterday sentenced a Vietnamese man and two Vietnamese women to 10 years each in prison after finding them guilty of selling three underage girls for sex in a brothel in Siem Reap town last year.

Patrick Stayton, president of the International Justice Mission, which provided a lawyer for the victims, said yesterday that police raided a brothel on June 29 last year following a tip-off from IJM.

Police arrested Ty Kimhoeung, 50, the owner of the brothel, and released six Vietnamese prostitutes, three of whom were under the age of 18. A Vietnamese woman and Ty Kimhoeung’s son-in-law remain at large after having escaped the raid.

IJM lawyer Sek Saroeun said yesterday that the court found Ty Kimhoeung guilty of procuring prostitution, while finding the two fugitives guilty in absentia of being accomplices.

Stayton said he was unhappy with the court’s decision not to order the three to pay compensation to the three victims.

“We are satisfied with the court’s conviction, which is the right judgment to show they took the case seriously and gave them heavy sentences,” he said. “But we are not happy that no compensation was given to the victims.”

He said IJM might appeal and request the court to “reconsider” the lack of compensation awarded to the victims.

Defence Lawyer Thorng Vanna said yesterday that he thought the sentence was too severe.

“We are not satisfied with the judgment, and it is a very heavy sentence,” he said, and added that a decision to appeal would depend on his client’s wishes.

Also yesterday, Siem Reap provincial court ordered a 44-year-old man to serve pretrial detention after charging him with raping and killing his 11-year-old stepdaughter in Siem Reap town’s Chong Khneas commune on Tuesday, police officials said.

Saom Phorn, 44, is accused of killing Leng Kunthea, whose body was discovered roughly 5 metres from her house on Tuesday. An autopsy revealed the girl was raped, and that she was strangled and suffered head injuries.

Deputy district police chief Mak Sam On said yesterday the court ordered the accused to serve pretrial detention.

“The court prosecutor has charged the accused with sexual assault and intentional murder,” he said.

“He didn’t confess to us, but later confessed to court officials that he killed the girl because she screamed, and he feared that she would alert the
neighbours.”

He added: “It was a brutal killing and the first time in my area that a father has raped and killed a daughter in a long time.”

Court officials could not be reached for comment.
(source from the phnom penh post newspaper, Friday, 15 October 2010 15:02 Chrann Chamroeun)

Friday, October 15, 2010

WiMAX debacle must prove a wake-up call

LAST year it all looked so promising and straightforward. Give internet service providers bandwidth and a licence to operate, creating stability for the likes of Chuan Wei and Mekong Net to feel confident to invest millions of dollars in WiMAX – a technology that could increase broadband coverage and lower connectivity costs in Cambodia.

But that confidence has evaporated. After nearly a year in which the government has failed to solve an overlapping licence issue, the Kingdom’s internet expansion looks to be stalled by years as investors hold back until the fiasco is resolved.

The country is set to lose out on the many benefits associated with spreading internet connectivity. In the words of one anonymous ISP executive whose company has been affected by the debacle: “This licensing problem has come along at the worst possible time for Cambodia.”

How and why did the government allow this to happen?

Just a few years ago analysts were predicting a rapid broadband rollout in Cambodia that would reduce some of the highest connection costs in the region. But with companies now reluctant to spend on costly WiMAX stations, which can transmit connectivity up to 50 kilometres where no cables exist, less comprehensive solutions such as enhanced WiFi are being deployed.

This cheaper technology can travel just 1 kilometre, at best. The result is that internet expansion to rural areas remains stalled. Where cables do exist, WiMAX has often not yet been deployed to compete and reduce costs.

Countless studies have shown that where you boost internet connectivity, you also spur economic activity. A 2009 World Bank study found that where you boost the number of internet users by 1 percent you in turn raise exports 4.3 percentage points. When new users go online they have access to a host of resources that point to potential markets, help advertise their products, increase communication and even secure payments outside of the confines of their town or village.

Rural connectivity also helps communities diversify economic activity away from agriculture, a major advantage when the economy remains extremely narrow. In cities, where you have confident ISPs investing in infrastructure and bringing down costs, the economic benefits are obvious – cheap, comprehensive internet coverage is an indispensable tool for GDP growth.

The government’s fumbling of the internet licensing issue is creating a serious setback for what would be guaranteed GDP growth. The solution is obvious. At the highest levels of government a clear decision needs to be made regarding the jurisdiction ministries have over licences. The problem is, of course, that licences provide lucrative revenue streams.

The debacle should serve as a wake-up call. If ever there was an instance when officials needed to sacrifice self-interest for the wider economic benefit, then surely this is it.
(source from the phnompenh post newspaper, Friday, 15 October 2010 15:01 Steve Finch)

Cambodian economy earns ‘mini-tiger’ recognition

CAMBODIA’S economy has emerged as a “mini-tiger” in terms of textile processing, despite a lack of attention from international investors, according to a report drawn up by Swiss banking giant UBS.

The Kingdom was one of the largest beneficiaries of the decade’s “globalisation boom”, said the report compiled by the Securities Asia division.

“The country has quietly established itself as a mini-tiger in textile processing and assembly, a fact generally overlooked by most investors including ourselves,” the emerging- market report said.

Of 80 emerging countries surveyed by the bank, only six – Cambodia, the Czech Republic, Hungary, Slovak Republic, Thailand and Vietnam
– recorded more than a 25 percent increase in manufacturing exports as a share of GDP from 1997 to 2008.

The report, which described Cambodia’s performance as a “shock”, has drawn support in the Kingdom.

Garment Manufacturers’ Association in Cambodia Secretary General Ken Loo said yesterday the Kingdom was generally an attractive location for foreign investors. With wages for garment workers rising in the China and Vietnam, Cambodia stood to attract additional interest, he said.

“There’s a huge potential here,” he said, although a number of challenges – such as frequent strikes, high electricity costs, and poor infrastructure – needed to be addressed.

Cambodia’s garment exports increased 13.4 percent to US$1.628 billion during the first seven months of the year, according to Ministry of Commerce statistics.

University of Cambodia economics lecturer Chheng Kimlong said yesterday that although the domestic economy was doing well, it was stronger before the financial crisis.
(source from the Phnompenh post newspaper, Friday, 27 August 2010 15:03 Jeremy Mullins and Catherine James)

Orange People going global

Twitter!
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Photo by: Pha Lina
Employees of The Orange People participate in a discussion at the firm’s high-tech Norodom Boulevard office in Phnom Penh.

PHNOM Penh-based communications agency The Orange People sees creativity as a valuable commodity, one that has the potential to thrust Cambodia into the international spotlight.

Set up in 2008 and headed by Cambodian-Americans Nathaniel Chan and Sophy Pich, Orange People has developed from an start-up into a burgeoning enterprise employing around 35 staff members.

Marketing experts, graphic designers and animators – around 60 percent of whom are Cambodian – are among those working at its Norodom Boulevard office to produce TV shows, branding campaigns and advertisements for the private companies and NGOs.

“It is about sending a message to the target audience. We tell stories through many forms,” said Orange People Chief Executive Officer Nathanial Chan.

In a domestic market where global giants such as Bates 141 and Ogilvy operate, the company has developed big ideas to differentiate itself from
rivals backed by international corporations. Diversifying from traditional branding methods, the company has used “social marketing” to spread brands through new media, TV and word of mouth.

For example, it created a touring television show called ‘You’re the Man’ for NGO Family Health International.Its aim was to challenge traditional male cultural roles by encouraging youths to prove themselves through cooking trials, personality tests and physical competitions.

“You are selling a message and a vision to try and impact change and more positive behaviour,” said Managing Director Sophy Pich, explaining that the show aimed to promote social responsibility amongst young men.

Orange People is also looking ahead to diversify the outlook for the Kingdom’s creative businesses. It is investing in technology to enable outsourcing to the United States. They hope American firms will be attracted by comparatively low Cambodian rates.

As Chan points out, much of the hit cartoon The Simpsons is made in South Korean animation studios, while Argentina has a burgeoning creative outsourcing sector.

“We are very technology-driven and want to put infrastructure in place so if you are sitting in New York you can see what is happening on a second-to-second basis,” he said.

“But having recognition on a global scale – it can’t be accomplished alone. It needs the backing of the entire industry.”

Chan said unity needs to be developed within the Kingdom’s growing marketing and advertising sector, which as yet does not have a cohesive voice and was hit hard by the global financial crisis, when many ad budgets were cut.

Among the survivors of the crisis, competition is still fierce. Chan talks of a “price war” among companies that compete for business through a bidding process.

“That’s how we feel at the moment, although we cannot speak for the entire industry,” he said. “But if we are just focused on competition we are forgetting about the bigger picture five to 10 years from now. We need to move forward as a sector.”

Sophy Pich said he believes skills have to be valued. “We have to stick firm on quality over price,” he said.

And Orange People must keep a close eye cash flow. It is especially important in an industry where clients pay a portion of fees upfront.

Though Chan declined to discuss exact finances, besides saying that the firm had no monetary concerns, he emphasised that “diligence” was needed to balance creativity with cash.
(source from the phnompenh post newspaper, Friday, 03 September 2010 15:00 Ellie Dyer)

AsiaInfo-Linkage inks contract with Mfone

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An Mfone employee discusses roaming SIM card services with a customer in one of its Phnom Penh offices. Photo by: Sovan Philong

NASDAQ-listed AsiaInfo-Linkage has signed its first contract outside China with Cambodia’s mobile-phone service provider Mfone, according to an official.

The firm is a provider of telecoms software and IT security, and will develop a “business intelligence” system to give Mfone an edge in the Kingdom’s crowded mobile-phone sector.

AsiaInfo officials declined to comment on the cost and role of the system yesterday, and one official said the firm’s management had “decided to keep a low profile” on the deal.

However, in a press release announcing the agreement, the firm said the business intelligence system was designed primarily to enhance Mfone’s business analysis capabilities in the Cambodian marketplace.

“The system is being built in response to increased competition in the Cambodian telecommunications market,” it said.

According to AsiaInfo-Linkage’s website, the system allows telecoms operators to “win new customers and expanding market share at a cost lower than that of their competitors”.

It uses data warehousing to assist service providers with decision-making while lowering costs by “focusing on the most exploitable customer group while attracting new customers”, it said.

AsiaInfo-Linkage boasts several of the largest Chinese mobile providers – including China Mobile and China Telecom – as clients.

Meanwhile, Mfone has grown to become the third-largest mobile service provider in the Kingdom as measured by active subscriber numbers, according to the most recent information from Cambodia’s Ministry of Posts and Telecommunications.

CEO Adisai Soonthornratanarak previously told the Post that Mfone – 51 percent owned by Thaicom and 49 percent by Asia Mobile Holdings – looked to increasingly target specific demographics.

Mfone has launched SIMs targeted towards Korean and Muslim people living in Cambodia during the last two months, joining a number of tariffs such as those aimed at Chinese-Cambodians and businessmen. Mfone’s CEO could not be reached for comment yesterday.
(source from the phnompenhpost newspaper,Tuesday, 31 August 2010 15:00 Jeremy Mullins)

South Korean tech standard adopted

CAMBODIA has adopted South Korean technology as the domestic standard for broadcasting, covering the spectrum from television to mobile phones, according to Minister of Information Khieu Kanharith.

Terrestrial-Digital Multimedia Broadcasting was agreed on as Cambodia’s standard in an agreement signed by the Khieu Kanharith and Korea Communications Commission vice chairwoman Lee Kyung-ja in Phnom Penh this week.

“We adopted T-DMB as a platform for mobile television,” the minister wrote on Wednesday. “The Ministry of Information will be monitoring this technology.”

Cambodia plans to commercially offer T-DMB service by the end of the year, after trialling the service for much of 2010 at the National Television of Cambodia station, according to a translated KCC press release.

During the October 2009 visit of Korean President Lee Myung-bak to Cambodia, Khieu Kanharith and Korean officials signed a deal to test T-DMB at the Ministry of Information-run National Television of Cambodia.

Lee Myung-bak was formerly an economic advisor to Prime Minister Hun Sen. Khieu Kanharith did not return a request for comment yesterday on whether rival mobile digital television technologies – such as the European Union’s “preferred technology” DVB-H – would be permitted to operate in Cambodia.

South Korea-based phone manufacturer LG electronics launched the first-ever DMB-compliant mobile handset in 2004, according to a Cambodian representative of the firm. However, the firm did not return request for comment yesterday on whether it had DMB compliant handsets available for purchase.
(source from the phnompenhpost newspaper, Friday, 27 August 2010 15:01 Jeremy Muillins )

Visitors to Angkor Wat on the rise

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A monk walks through Siem Reap’s Angkor Wat complex, which has seen the number of foreign tourists rise by about 24 percent so far this year. Bloomberg

ANGKOR Wat has seen a 24 percent increase in visits by foreign tourists over the first nine months of 2010, compared to the same period last year.

Some 804,170 foreign tourists visited the temple complex during the period, a 23.91 percent increase on the 648,972 tourists who visited during the first nine months of 2009, according to a senior official at the Apsara Authority, who wished to remain nameless.

Apsara is the management authority for the temple complex.

Although total visits had increased, the Apsara official with knowledge of the situation declined to release year-on-year revenue figures.

Apsara Authority General Director Bun Narith said he could not immediately confirm revenues yesterday, as he was travelling. But he said that calculations were not simply a matter of multiplying total visitors by tickets prices.

“There are some 200 to 300 government delegations attending meetings in Siem Reap, and they visit the Angkor Wat for free,” he said.

Some 70 to 80 percent of foreign tourists travelling via bookings with the Cambodian Association of Travel Agents visit the Siem Reap temples, said association president Ang Kim Eang.

“Most guests think they did not see Cambodia if they miss visiting Angkor Wat,” he said.

Siem Reap is the largest hub for foreign visitors to the Kingdom, according to Kong Sopheareak, director of the Ministry of Tourism’s Department of Statistics and Tourism Information.

Foreign tourists pay US$20 to visit the temples for one day, $40 for three days, and $60 for a weeklong visit, he said.
(source from the phnom penh post newspaper, Friday, 15 October 2010 15:01 Rann Reuy) 

Outsourcing 'fair' tech trade

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Dominik Stankowski hopes that information technology outsourcing can be fair-trade certified in the future. His Phnom Penh-based company values training and aims to compete with European software developers. Photo by: Rick Valenzuela

We try to provide high quality, with the additional value that we are a social business.


FAIR trade coffee is increasingly sipped by globally conscious consumers. But the future may see fair trade certification for outsourcing in the software industry, according to the head of one domestic IT startup.

Dominik Stankowski, executive director at Phnom Penh-based technology firm Web Essentials, said fair trade software outsourcing was a prime motivation behind the creation of the company in April this year.

While tech outsourcing is becoming big business in places such as India, it often employs people who work for low salaries – suffering the pitfalls common to other profit-maximising industries such as long hours and poor working conditions.

But Web Essentials, which employs 22 Cambodian and four expatriates to help run websites built around content-management software called TYPO3, is based on a different business model.

International companies are increasingly concerned with their social relevance, according to Stankowski, providing a ready market for a ‘fair’ approach to unconventional industries such as software.

With about 80 percent of its contracts coming from companies based in countries such as Switzerland, Germany and the United States, the firm claims its services can demand better prices due to an emphasis on the social aspect of its business.

Stankowski said the company paid its employees better wages than most outsourcing firms in developing countries, a move coupled with shorter hours and extensive skills training.

The measure put the company in direct competition with Europe’s freelance software developers, he said.

“We try to provide high quality, with the additional value that we are a social business,” he said.

“My long term goal would be [to create] a certificate for fair trade software.” A large part of Web Essentials – which Stankowsi terms a “social business” – is the training and mentoring of its Cambodian staff.

The firm prides itself on developing its own employees.

“In IT, people are the main resource, as opposed to any other product,” he said.

“That’s why it’s very relevant to invest in staff from a business point of view.”

With a personal history working with overseas firms and in large Cambodian companies, Stankowski said he aimed to better target domestic small and medium enterprises.

“The only way to compete with others is a good ability to learn, and adopt new technology,” he said.
(source from the phnom penh post newspaper, Friday, 15 October 2010 15:01 Jeremy Mullins)

Business secrecy a concern for organisers of economic census

GOVERNMENT officials have voiced concerns that Cambodia’s first economic census, slated for next March and costing up to US$3 million, could be made more difficult by uncooperative businesses.

The economic census, largely funded by Japan International Cooperation Agency, aims to gather concrete business-related information to facilitate foreign investment and organise national-level business strategy, according to officials.

San Sy Than, general director of the Ministry of Planning’s National Institute of Statistics, said concerns of business confidentiality made the economic census more difficult to carry out than the population census.

But he encouraged businesses to trust the census officials.

“[The economic census] is smaller, but it’s more difficult to do than the population census,” he told the Post at the close of a meeting held between the NIS and JICA officials on Tuesday.

“We expect that the businesses will cooperate well and give the correct information. We will keep all the [company specific] information confidential.”

Cambodia’s last population census in 2008 cost around US$7 million, he said.

Mong Reththy, senator and head of agriculture giant Mong Reththy Group, said he would be willing to cooperate without secrecy with government requests for information.

“I have no reason to hide anything. I’m happy to answer all the questions they want to ask,” he said.

The economic census, which is undertaken in many other countries throughout the world, would help the government gather official data to construct national economic policy and attract investment to the Kingdom, San Sy Than said.

The census will take place from March 1 to 31 and will employ more than 20,000 people and 4,000 officials to interview business owners, he said. Preliminary results will be released in July next year, with official results released in March 2012.

The NIS’ last survey in early 2009 found 375,095 enterprises operated in the Kingdom, not including agriculture, forestry, fisheries and mobile-network businesses.
(source from the Phnom Penh post newspaper, Thursday, 14 October 2010 15:01 Rann Ruey)

Trade with Malaysia rises after visit by Najib

CAMBODIA’S trade with Malaysia is increasing in line with the world economy and benefited from the visit of Malaysian Prime Minister Najib Tun Razak to Phnom Penh in May, officials said yesterday.

Speaking at the first Malaysia trade fair, which began at Phnom Penh’s NagaWorld, the Malaysian ambassador Mohd Hussein Mohd Tahir Nasruddin said trade links between the two ASEAN members were becoming increasing strong.

“Cambodia is not only an important emerging market, but also an important destination for investments and sources of imports,” he said
The Malaysian Prime Minister’s May visit had encouraged investment from companies running hotels, restaurants, the beverage industry, and hospitals, he said, but he did not mention specific ventures by name.

During that trip deals said to be worth $1 billion were signed.

According to the Ministry of Commerce, bilateral trade totalled US$113.4 from January to the end of August 2010, which the Post calculated to be a 13.8 percent rise on trade worth $99.6 million for the same period of 2009.

The Malaysian ambassador added that Cambodia’s rice exports could increase in the future.

Cambodia’s Minister of Commerce Cham Prasidh said that under the ASEAN Free Trade Agreement, trade was likely to continue increasing as duties would be fully removed by 2015.

“Cambodia and Malaysia are dynamic market economies that depend on international trade for stimulating economic growth,” he added.
Francis WK Ng, sales manager at Amerseal Industrial, which sells glue and cleaning products, said yesterday: “Cambodia has lots of potential.”
(source from the Phnom Penh post newspaper, Thursday, 14 October 2010 15:01 Soeun Say)

JICA sets out plan to help investors

THE Japan International Cooperation Agency has announced a US$2 million project to improve investment information and staff expertise at the Council for Development of Cambodia.

Officials said the scheme aimed to make it easier for Japanese companies looking to enter the Kingdom.

At a signing ceremony at the CDC’s Phnom Penh office yesterday, JICA chief representative Yasujiro Suzuki said the agency wanted to further boost private investment “especially from Japan” by “improving the capacity of CDC ... in this emerging and competitive region”.

The funding would be used to further train staff, especially those in the CDC’s operational arm Cambodian Investment Board, as well as build a new “investor-friendly” website and a reception desk, he said.

The plan should help “attract more diversified industries which have not existed in Cambodia before”, he said.

An increasing number of Japanese firms were indicating a desire to grow their business here, such as food processing companies and small parts manufacturers, he told the Post at the ceremony.

“Cambodia has been involved mainly in specific industries like the garment industry before, but now we are expecting more companies from other production sectors to come from Japan,” he said.

Sok Chenda, secretary general at the Council for the Development of Cambodia, signed the funding agreement and officially thanked JICA on behalf of the CDC. Though the project details were not finalised, JICA expected to begin its implementation early next year.
(source from The Phnom Penh post newspaper, Friday, 15 October 2010 15:02 Catherine James)

Cambodia: Budget draft 2.3bn for year 2011

THE Council of Ministers is set to approve a draft law on the Kingdom’s 2011 budget today, after officials earlier this year pointed to a US$830 million expenditure rise.

Yesterday, Hang Chuon Naron, secretary of state for the Finance Ministry, declined to discuss further details, saying to “wait and see” if it was approved.

But Cheam Yeap, chairman of the National Assembly’s Commission of Economy, Finance, Banking and Audit, said the proposal may be unchanged from a statement made by Finance Minister Keat Chhon earlier this year.

The minister told National Assembly members in July that the government drafted the budget of 12 trillion riels (US$2.83 billion) for the 2011 — up from 8.5 trillion riels in 2010. Of the amount, 9 trillion riels would stem from various revenue streams, leaving a shortage of 3 trillion riels.

Cheam Yeap said yesterday that a gradual increase of the budget would meet broader needs for economic and social development in the Kingdom.

“For Cambodia, our priority sectors are still education, health, rural development, agriculture, women affairs, social affairs and physical infrastructure,” he said.

“The national security and defense budget may not increase,” he added.

Thursday, October 14, 2010

ASEAN focuses on logistics

ASEAN officials have vowed to cooperate more closely on logistics integration in the region, as officials estimate that government barriers account for 30 percent of the cost of moving goods between the 10 member states, including Cambodia.

Members of the bloc had launched a road map aimed at streamlining a number of business activities including supply, distribution and monitoring the movements of goods, ASEAN director of market integration Subash Pillai said yesterday.

“The road map aims to speed up logistics by 2013, and, in the long term, make ASEAN a logistics centre in the Asia-Pacific region,” he said yesterday at a meeting of ASEAN economic ministers in Da Nang, Vietnam.

Government-imposed barriers accounted for about 30 percent of costs for intra-ASEAN shipping, he said.
That was a number the road map aimed to reduce.
Launched two years ago, the road map encourages four paths of action – lowering tariffs to increase the flow of goods, trade and investment liberalisation to improve investment in the logistics sector, enhancing the capacity of the sector and improving human resources capacity.
Procedural delays on shipments are due to be reduced under the terms of the road map, said Cambodia Chamber of Commerce deputy chairman Sorn Sokna.
He cited the example of goods travelling from China to Cambodia via Vietnam. Previously, shipments like these required a customs check in Vietnam.
However, once the new scheme comes into effect, goods may be shipped directly from the People’s Republic to Cambodia, he said.
“When this scheme happens, it will help logistics services become faster and cheaper within ASEAN,” he said yesterday.
Cambodia maintains a less-extensive logistics tail compared with neighbouring Vietnam and Thailand, according to Ministry of Public Works and Transportation Planning Department deputy director Cheam Sovanny.
“Our roads, railroads, waterways and air connection are still weak,” he said.
“Through this new road map, we hope Cambodia will strive hard to develop the physical infrastructure to keep up with the development of logistics services in these countries.”
It is still a complicated process to transport goods across the Cambodian border, as both the Finance Ministry’s Department of Customs and Excise and the Ministry of Commerce’s CamControl Department are charged with overseeing part of the process, he said yesterday.
“This scheme will be good for Cambodia and other ASEAN countries. Facilitating logistics will play an important role in reducing time and costs, and improving efficiency.”
(source from the phnom penh post newspaper, Monday, 23 August 2010 15:01 Nguon Sovan)

Tobacco-control law should be passed by 2015, officials say

THE government has set a 2015 deadline for the passage of a tobacco control law that was first drafted in 2003, officials said yesterday following a meeting of the Inter-Ministerial Committee for Tobacco Control.

Ung Saran, deputy director of the government’s National Health Promotion Centre, said he “hoped” the law would be implemented by the 2015 deadline.

He said the government was committed to tobacco-control reform, but that the passage of the law was complicated.

“It takes a long time because it must go through many inter-ministerial committees,” he said.

Mom Kong, the executive director of the NGO Cambodia Movement for Health, said yesterday that, among other regulations, the draft law proposed prohibiting smoking in workplaces and on public transport, banning tobacco advertising, and increasing taxes on tobacco products.
He said he believed it would be possible to finalise the law before 2015.

“It will not take as long as until 2015 because it started in 2003,” he said, and added that the law had already been revised and amended numerous times following suggestions from the Council of Ministers, the Ministry of Economy and Finance and the Ministry of Commerce.

Mark Schwisow, country director for the Adventist Development and Relief Agency, said yesterday that the draft law “encapsulates all of the commitments covered under the World Health Organisation’s Framework Convention on Tobacco Control”, which was ratified by Cambodia in November 2005.

He said ADRA and other civil society groups would like to see the law finalised before 2015.

“Political will has not been strong enough to send it forward,” he said. “We’d like to try to encourage the acceleration of the passage of that law. It’d be nice to have a commitment from the committee to pass this law by 2011 or 2012.”

He said he did not know all the reasons for the delays to the passage of the law, but noted that the Ministry of Finance and Ministry of Commerce had objected to some articles in the draft addressing the taxation of tobacco.

Domestic tobacco products are currently taxed at 20 percent and imported products at 25 percent.

Mom Kong said the World Bank has suggested introducing taxes of up to 65 percent.

Schwisow said there had been some recent progress in tobacco control reform, with the Health Ministry showing a particularly “strong commitment” to speeding up the passage of the law.

“Recently there’s been a considerable push to get it before the Council of Ministers,” he said.

A sub-decree making it mandatory for all cigarettes sold in the Kingdom to feature written health warnings went into effect on July 20. Companies were given nine months to comply to the new regulation.

Khun Sokrin, director of the NHPC, said it was possible the draft law would be completed before the 2015 deadline.

“We will try our best to do it as soon as possible,” he said.
(source from the Phnom Penh post newspaper, Thursday, 14 October 2010 15:03 Phak Seangly)

MFIs see loans, profits soar

LEADING microlenders have seen loan portfolios expand and profits soar, in one case by almost 100 percent quarter-on-quarter, as Cambodian business activities are boosted by economic recovery.

Prasac, Cambodia’s largest microfinance institution, reported yesterday that its loan portfolio increased by 21 percent to US$88.2 million at the end of quarter three, from $72.9 million at the second quarter’s end.

Its client numbers increased by 16 percent to 105,900 nationwide.

“The loan portfolio and number of borrowers grew due to increased demand in the agricultural sector and in small and micro-enterprise sector,” Sim Senacheert, general manager of Prasac, said yesterday.

“We expect to grow 10 to 15 percent in the last quarter of this year,” he added.

Prasac earned a net profit after tax of $728,000 in the third quarter, an increase of 99 percent from $365,000 at the end of second.

This was partially due to its increased portfolio and a drop in the rate of non-performing loans.

NPLs decreased from 1.44 percent to 1.14 percent during the last quarter.



The loan portfolio grew due to increased demand in the agricultural sector ...


Microlender Hattha Kaksekar Limited saw oustanding loans increase by around 14 percent to $39 million at the end of the third quarter.

Hout Ieng Tong, its general manager, said yesterday: “Business activities seem to be stronger because loan demand is increasing.”

HKL's net profits increased by 20 percent as loan repayments improved. The rate of bad loans continued to drop to 2.3 percent, from 2.6 percent in quarter two.

Hout Ieng Tong forecast that for 2010, HKL expected its loan portfolio to reach $40 million, 30 percent up on last year.

The Kingdom’s third-largest MFI, Sathapana Limited, also reported better performance during the quarter. Lending rose by around 13 percent to $50 million and the MPL rate dropped to 1.56 percent, from 1.84 percent.

“Economic improvement can reflect that business activity is getting better, clients can generate sufficient income to repay the debts,” chairman Bun Mony told the Post yesterday.

Quarter on quarter, Sathapana saw the value of construction loans increase by 22 percent, household consumption loans rose 21 percent, services and transportation were up 25 percent, small trades were up 13 percent, and agricultural loans rose by 11 percent.

The lending growth was also experienced among smaller MFIs.

Cambodia Business Integrated In Rural Development Agency, reported that its lending increased by 2 percent increase to $1 million in the third quarter.

Customers increased by 5 percent to 2,100. The institution provides the interest rate between 2 and 3 percent per month.

“We saw from one quarter to another, lending has gradually increased. It could reflect the recovery of the economy,” Prom Mary, CBIRD board director, said yesterday.

Tal Nay Im, director general of the National Bank of Cambodia, said yesterday: “In general, we saw that the demand for loans is pertinent to the situaton of the economy, and since late last year, the recovery has started, and lending has gradually increased.”
(source from the Phnom Penh post newspaper, Thursday, 14 October 2010 15:01 Nguon Sovan)

NBC puts Mobitel on notice over cash service

The National Bank of Cambodia says it will take action after the Kingdom’s largest mobile operator, Mobitel, launched a money-transfer service without applying for central bank oversight.
Under a prakas issued by the NBC on August 27 this year, the bank must oversee credit remittances – such as money-transfer services provided by mobile-phone companies.
According to NBC officials, Mobitel’s Cellcard Cash service was launched on September 20 without the filing of an application.
Yesterday, NBC director general Tal Nay Im weighed into the controversy by stating that the bank “will apply our law”.
Although she declined to comment on what action the central bank was considering, she did not rule out legal action against the market leader.
“I cannot tell you yet [what action we will take], but we have to do something,” she said.
Every player in the domestic mobile money-transfer business should comply with the prakas, she said.
Mobitel’s competitors have complied with regulations.
ANZ Bank’s WING money-transfer service and ACLEDA’s Unity mobile banking are operating under NBC oversight.
Mobitel Chief Executive Officer David Spriggs declined to comment on the issue, but operations manager Kay Lot has said that the company did not consider mobile-money transfers to be banking.
He could not be reached for comment on Wednesday.
Chairman of Mobitel’s parent company Royal Group, Kith Meng, said he was “unaware” of the issue and that he was in a meeting.
Chief Financial Officer of Royal Group, Mark Hanna, declined to comment.
Mobitel established the Cellcard Cash service after receiving a grant from the GSM Association’s Mobile Money for the Unbanked initiative in May.
The programme is largely funded by the Bill and Melinda Gates Foundation.
 (source from the Phnom Penh post newspaper, Wednesday, 13 October 2010 21:31 Jeremy Mullins)

Wednesday, October 13, 2010

Indochine Mining to raise millions

Gold and copper miner Indochine Mining Ltd, which is exploring concessions in two Cambodian provinces, said it expects to raise as much as A$25 million (US$24.5 million) in an initial public offering after receiving commitments from investors around the world.

Indochine’s Phnom Penh-based operations manager and board member Ross Hill said that many institutional investors were seeking exposure to Cambodia’s gold and copper resources, with investors confirmed from the United Kingdom, Switzerland, the United States, Papua New Guinea, China, Malaysia and Australia.

“Already attracted at an early stage and continuing to support the company are some of the world’s most prestigious and professional investment houses,” he told the Post via email.

“For example, the company’s largest single investor Jabre Capital Partners is one of Europe’s biggest and the best performing fund in 2009.”

Geneva-based Jabre has $4 billion in funds under management, according to its website.

Sydney-headquartered Indochine will list on the Australian Stock Exchange (ASX) by early November with its IPO due to close to institutional investors “in coming days” and to retail investors shortly thereafter, Hill wrote.

Priced at A$0.20 per share, Indochine aimed to raise $12 million with provision to float another $13 million worth of shares, depending on market demand.

“Current indications are that the company will have received applications at the higher end of the [$12 - $25 million] range by the time the offer closes,” the company said in a statement posted on its website.

Indochine also announced the hire of a new chief executive, Stephen Promnitz, who is currently the corporate development manager of ASX-listed Kingsgate Consolidated, which owns and operates the Chatree gold mine in  neighbouring Thailand.

Hill said Indochine’s former chief and company founder, David Evans, supported the change of leadership.

“[He] recognises that the injection of a contemporary career professional executive, with worldwide development experience including Thailand, Indonesia and Papua New Guinea and Argentina, would be of enormous assistance to further advance, develop and enhance the prospects of the company,” he said.

Evans remains with the company as an executive director.

Indochine began exploring in Cambodia in 2007. With tenements of 2,900 square kilometres in Ratanakkiri province and 1,400 square kilometres in Kratie province, it claims to have the largest landholding of all miners in the Kingdom.

Hill said the new funds would be used to start drilling multiple key targets that the company has identified.

Meanwhile, Cambodia-focused gold explorer Brighton Mining Group has officially listed on the ASX with shares set to start trading within the next ten days, after reaching its A$2.2 million target in a recent IPO.

The Perth-headquartered company, with tenements in Mondulkiri, declined to comment on its investor base or company plans, saying it would wait until shares began trading.
(source from the PhnomPenh post newspaper, Tuesday, 12 October 2010 22:38 Jeremy Mullins)

Wireless “WiMAX” derailed in the Kingdom

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Photo by: Rick Valenzuela
Suong Senghuot, a leased line supervisor for Wicam, checks a line for a customer on the corner of Monireth and Sihanouk boulevards. Wicam spent $30,000 preparing WiMAX stations but says the technology may never launch.
Companies planning to offer wireless ‘WiMAX’ internet in the Kingdom are exploring alternate business models and writing off investments, after a long-running dispute over frequency allocation put their licences in doubt.
In January, seven leading Internet Service Providers (ISPs) wrote to Prime Minister Hun Sen to lodge a complaint regarding the allocation of a specific frequency range – which had already been granted to the ISPs for WiMAX use.
The Ministry of Posts and Telecommunications had also issued the 2.5GHz to 2.7 GHz frequency range to a firm called Star Digital TV – putting ISPs’ existing permits in doubt.
Despite talks, ISPs have told the Post that the issue has yet to be resolved and firms are now counting the cost of the furore.
Sok Channda, CEO of Cambodia Data Communications, parent company to both Mekong Net and Angkor Net ISP, said it was still not cleared to operate WiMAX technology, despite meeting with the Ministry on several occasions.
“It really affected our business,” she said. “We had already invested.”
She estimated the inability to launch WiMAX could cost them in excess of US$1 million, and added the firm had already signed a 10-year partnership to bring the technology to the Kingdom.
The firm had also considered a separate partnership to introduce Voice over Internet Protocol calls using WiMAX, she said, but it was now looking at different ways to provide internet connections to households.

Hy Borin, system administrator at Wicam ISP, said the dispute had lasted for over a year, and that a solution had not been found.

Wicam – which also signed the letter to the prime minister – claims to have spent some $30,000 preparing WiMAX stations, but now plans to reinvest in fibre cables to deliver internet the “last mile” to homes.

As negotiations with the Ministry of Posts and Telecommunications proved fruitless at resolving the dispute, he said there may never be WiMAX in Cambodia.

Hyam Bolande, vice president at Chuan Wei – another affected firm – declined to comment directly on the issue, but said Cambodia’s economic and social development needs more affordable broadband in the hands of more people.

“The only way that’s going to happen in this country on a mass level is wireless [internet],” he said.

The other companies that saw their WiMAX licences affected included Wireless IP, Angkor Data Communication Group, CityLink, Craig Wireless Systems, Global Telecom, and Sotelco.

The letter sent to the prime minister said that reissuing the licences sent “the investment community, both current and potential, the wrong message about investment protection and rule of law in Cambodia”.

Minister of Posts and Telecommunications Sok Khun declined to comment on the issue, as did representatives of Star Digital TV. ADDITIONAL REPORTING SEN DAVID
 (source from the phnompenh post newspaper, Tuesday, 12 October 2010 22:38 Jeremy Mullins)

Tuesday, October 12, 2010

Air France eyes Cambodian skies

France’s ambassador to Cambodia, Jean-François Desmazières, has told Prime Minister Hun Sen that he supports an Air France plan to resume direct flights to the Kingdom.

This will end a 35-year hiatus on the connection.

The diplomat called on Cambodia to assist the carrier in providing the direct connections, according to Eang Sophallath, personal assistant to the Cambodian prime minister.

“Hun Sen highly encourages the airliner’s intention to invest,” he said.

Ho Vandy, president of the Cambodia Association of Travel Agents, said that direct flights would provide additional opportunities for French and European tourists to visit Cambodia.

Visitors from Europe presently arrive in the Kingdom after transiting through Vietnam, Thailand, or Malaysia, since there are no direct flights from the continent to Cambodia.
“We hope the planned direct flight would lure many tourists from France and Europe since it would reduce travel time and expense,” he said.

Air France previously conducted flights to Phnom Penh, according to the airline website, but they halted in 1975 after the Khmer Rouge came to power.

French Embassy spokesman Tung Soklim confirmed that the ambassador had met Prime Minister Hun Sen to discuss Air France, but could immediately confirm the details of the conversation.

Air France-KLM Group has teamed up with Europe’s biggest airlines to push for EU action to slow the encroachment of Emirates and other Gulf carriers, saying the region’s status as an air-travel hub was under threat.

“Europe is at the crossroads of international air travel,” Air France CEO Pierre-Henri Gourgeon said. ADDITIONAL REPORTING BLOOMBERG
(source from the phnompenh post newspaper, Monday, 11 October 2010 15:06 Chun Sophal )

Key corruption suspects identified

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Photo by: Julie Leafe
Om Yentieng, chairman of the Anticorruption Unit, speaks during a press conference in July.

The head of the newly established Anticorruption Unit has said that investigations of more than 20 graft cases involving government officials had resulted in “several” offenders being identified, but that the body would not pursue any prosecutions until the end of next year.
Om Yentieng, who is also a senior adviser to Prime Minister Hun Sen and chairman of the government-run Cambodian Human Rights Committee, said no arrests would be possible until new legislation comes into effect about 12 months from now.
“We could not arrest individual corrupt officials and send them to court while we are waiting for the new Law on Anticorruption, which will be implemented by the end of the year 2011,” he said.
“The Criminal Code will be officially implemented by December this year, and the Law on Anticorruption will be put in place 12 months after.”
Yim Sovann, spokesman for the opposition Sam Rainsy Party, said there was no excuse for the ACU to wait for the new penal code to come into effect before prosecuting offenders.
He argued that offenders could be punished immediately under the UNTAC Criminal Code

The delay in pursuing prosecutions, he said, was indicative of the government’s lack of “political will” to confront high-level graft.

“What they have done so far is to try to show that they are serious about curbing corruption, but in fact they have not done anything,” he said.
(source from the phnom penh post newspaper, Monday, 11 October 2010 22:46 Vong Sokheng and Brooke Lewis)

Cambodia “future of world rice”

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Photo by: Sovan Philong
Farmers head back from the field with paddy in Kampong Cham.
Indian rice exporter Amira Group plans to invest up to US$40 million in Cambodia’s rice sector, hailing it as the “future of rice in the world”.
New Delhi-based Amira Group executive director Protik Guha said the company was looking to put between US$30 million and $40 million towards setting up a rice-processing plant in the Kingdom – its first outside India – and acquiring 25,000 hectares of agricultural land.

“Cambodia is the future of rice in the world,” he said.

“It has abundant paddy in terms of land, and [the investment] makes sense with the duty concessions available for export,” he said, noting Cambodia’s recognition of the ASEAN free trade area and the ASEAN-Australia-New Zealand free trade agreement.

“We are talking to a couple of local partners, but we are very much at the drawing board stage,” he said, and added that ideally the company would form a public-private partnership for its plans.

Amira Group has operated in India since 1915 and last year saw total revenue of US$240 million. The group has exported more than 70,000 tonnes of Basmati and 200,000 tonnes of long-grain rice to more than 40 countries worldwide, according to its website.

It is also one of only 250 companies admitted to the World Economic Forum’s group of “Global Growth Companies”, which identifies “dynamic high-growth companies with the potential to be tomorrow’s industry leaders”.

Protik Guha said expansion in India was limited because of the laws surrounding land ownership.

The company was also engaging governments in Sierra Leone and Angola regarding agricultural land purchases, he said.

He noted that despite Cambodia’s rice-heavy farming sector, he felt that it lacked structured growth – something Amira would like to provide leadership on.

He declined to comment on what area of Cambodia the company was targeting, but confirmed that the new processing plant and the land acquisition would be based near each other.

Kith Seng, under secretary of state at the Ministry of Agriculture, Forestry and Fisheries, said yesterday that he had not yet received any information relating to Amira’s plans, but he said that agricultural investment was welcome.

“It’s no problem. We have to study together how much land we have available,” he said.

Agriculture Minister Chan Sarun could not be reached for comment.
(source from the Phnompenh post newspaper, Monday, 11 October 2010 15:08 Catherine James and Sam Rith)

Cambodia needs a sensible energy plan

NEWS that the government plans to introduce nuclear power plants to the Kingdom should be welcomed as a long-term boost for economic activity in the country, even if concerns over safety always plague the production of nuclear energy.

Cambodia’s woefully inadequate supply and transmission of electricity remains one of the main structural problems afflicting the economy, prompting high energy costs for the country's key industry, garment manufacture.

The only problem is that nuclear energy production is unlikely for many years, probably not until 2020, according to Ith Praing, secretary of state at the Ministry of Industry, Mines and Energy.

Still, at least the announcement shows the government is trying to solve the issue and is thinking long term while considering sensible answers to the energy problem.

In the shorter term, the government has made some surprisingly poor decisions in terms of boosting energy production, notably permitting Malaysian firm Leader Universal to build a 100-megawatt coal-fired power plant in Sihanoukville.

Though this facility will contribute quickly to energy production – it is due to go online at the end of 2012 – the choice of location could backfire badly on the economy.

Cambodia has been trying to promote Sihanoukville as the latest Southeast Asian beach resort for some time, an effort that has struggled despite the rehabilitation of the province’s airport by French firm Société Concessionaire des Aeroports.

Surely, building a power station that burns coal, the most polluting fuel available, does not bode well for tourism in Sihanoukville – SCA has already experienced major problems attracting scheduled flights to the resort.

Presumably, the decision to build the plant in Sihanoukville was made because of its large port that would be used to import coal.

However, Cambodia’s largest deposits are believed to exist at the opposite end of the country. At least 150 million tonnes of the fossil fuel are estimated to be lying below the surface in the north of the Kingdom.

“By using domestic coal, Cambodia will no longer need to depend on imported fossil fuels to power its electricity-generating plants,” according to the government’s Invest in Cambodia website.

So why was the decision made to build the new coal plant in Sihanoukville (with another planned for the area)?

Nuclear power is as efficient as coal production in terms of cost without the associated carbon dioxide and smog. The waste produced is also far less, even if it is very difficult to manage safely.

Countries including Britain have in recent years held heated public debate regarding the development of new nuclear plants in a bid to develop greener energy, and neighbouring Vietnam in June announced it would go nuclear to meet its increasing demand for electricity.

Cambodia is, therefore, following a well-worn path in considering nuclear industry, but the government needs to ensure that the private sector and the general public are included in the nuclear debate so that the country makes the right decision for all concerned parties.

By doing so, Cambodia should be able to avoid making poor choices regarding its energy future – such as its current plans for coal-fired energy production.

With this in mind, the government’s early announcement of its nuclear intentions represents a good first step.
(source from the phnompenh post newspaper, Monday, 23 August 2010 15:02 Steve Finch)

More tourists may not bring salvation

CAMBODIA’S tourism industry has enjoyed surprising success in encouraging foreign visitors to the Kingdom following the global economic crisis – arrival numbers were up last year and continue to soar in 2010. However, although more people are entering Cambodia, key indicators show the sector has a long way to go before the numbers of the pre-crisis era fully return.

Though government figures show a 15 percent rise in total arrivals in the first eight months of 2010 compared to last year, most of these gains came from the near-50 percent climb in Vietnamese visitors – already the most numerous travellers to the Kingdom. Travel industry executives will hardly be excited by this statistic as many Vietnamese come to Cambodia for only a few days and are considered to spend much less on average than tourists from North America and Europe.

United States visitors fell more than 4 percent and those from the United Kingdom dropped 3.75 percent to the end of August, a sign the sluggish global recovery is still hurting. Travellers look to be choosing conservative destinations rather than far-flung Cambodia.

The government has done a good job balancing the drop in Western tourists with increases from the region – certainly opening more border gates and reducing traffic restrictions with Vietnam has helped. But this has contributed to a structural shift in the tourism industry towards lower-spending, short-term visitors.

Government data show the average international visitor spent about US$1 less per day in 2009 compared to 2008 – just under $112 – which resulted in a fall of around $2 million across the industry. The average visitor stayed just 6.45 days last year, compared to 6.65 days in 2008. This statistic represents deeper structural problems in the sector, as the average stay was falling even before the onset of the economic crisis, a sign that more people are coming but are moving through more quickly – an effect attributable not just to more short-term visitors from Vietnam.

Cambodia has struggled to establish itself as a destination that demands attention outside of Angkor Wat and the capital Phnom Penh. The persistent challenge of attracting airlines to fly to Sihanoukville testifies to this problem – there are still no scheduled flights to the beach resort’s recently upgraded airport. This is not likely to be for no reason – Air Asia in particular has expanded all over the region. But the carrier only chooses destinations offering a good opportunity to make a profit after conducting market research, just like any airline.

The key for Cambodia’s tourism industry is, therefore, to encourage visitors to explore outside Phnom Penh and Siem Reap, while trying to recover Western tourists.

Cambodia’s Ministry of Tourism is targeting 2.4 million arrivals this year and 2.8 million for 2011, which would represent impressive year-on-year growth of 11 percent and 16.7 percent respectively. However, the key question remains: Will the industry actually bring in more money?
(source from the PhnomPenh post newspaper, Monday, 11 October 2010 15:00 Steve Finch)

IMF sees Kingdom on track to solid recovery

INTERNATIONAL Monetary Fund senior officials praised Cambodia for its economic performance this year and said the country’s foreign direct investment was set to grow up to 20 percent.

The IMF’s senior economist and chief of mission to Cambodia, Olaf Unteroberdoerster, said on Saturday at the sidelines of the at the IMF-World Bank annual general meeting in Washington that foreign direct investments into Cambodia had “turned the corner” this year and on current trends would increase about 20 percent over 2009 – although it would take some time before it fully recovered.

“As the excess from a pre-crisis construction boom is being unwound, FDI is expected to remain below its 2008 peak level for a couple of years,” he said.

Cambodia’s FDI was $515 million in 2009 and was $795 million in 2008.

In the updated World Economic Outlook just released in Washington, the IMF maintained its forecast for Cambodia’s GDP growth at 4.8 percent for 2010 and 6.8 percent for 2011 – the same rates it predicted in April.

Although Cambodia’s GDP growth is significantly positive, the report showed it is still lower than its immediate neighbours, Laos, Vietnam and Thailand, which are growing at 7.7 percent, 6.5 percent and 7.5 percent respectively this year.

“Cambodia’s economy is certainly recovering well from the contraction [minus 2 percent] we saw last year,” said Anoop Singh, director of the IMF’s Asia and Pacific Department. He was speaking on Saturday in the press briefing on the economic outlook for the Asia and Pacific region.

He said the IMF had been carrying out a financial-sector assessment programme for Cambodia and believed it was an important time for Cambodia in its efforts towards development of a crisis-management framework and improved supervision and regulations. He also said the government was proactively looking at the policies that would improve the business environment.

Anoop Singh said that when comparing Cambodia to other low-income countries in Asia, it remained the case that two important steps were needed. “To raise the tax ratio, I should mention that Cambodia’s tax-to-revenue ratio to GDP lags many comparator countries in the region by at least five to seven percentage points,” he said.

“Most importantly, as in other countries, [Cambodia needs] to raise infrastructure investment including in agriculture, but also, I think the main point is to broaden and improve the business environment, attract capital into Cambodia, and broaden the sources of growth.”
(source from the PhnomPenh post  newspaper, Monday, 11 October 2010 15:00 Nguon Sovan)

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