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Cambodia’s openness helps it connect with Asean

KT: How good is connectivity within Asean and the world?

Dato’ Sri Mustapha: Southeast Asia’s ambitious plans to boost region-wide economic integration – and consolidate its position as a key transport, communication and tourism hub – hinge largely on forging stronger transport, regulatory and people-to-people links among the ten members of Asean.

Connectivity here focuses on three dimensions – physical including infrastructure, institutional and people-to-people.

The Master Plan on Asean Connectivity underlines that while hard infrastructure is important, an enabling regulatory framework and a shared identity also play a crucial role in better connecting regional countries with each other and with the rest of the world. Regional connectivity will also be strengthened through cross-border infrastructure. If Asean connectivity proceeds as planned, the region will be a formidable economic powerhouse in the world in the near future.

Transport connectivity is also a way to bring member and regional partner countries closer to one another, facilitating better access for trade, investment, tourism and people-to-people exchanges.

KT: How is Malaysia also promoting connectivity within Asean?

Dato’ Sri Mustapha: There has been cooperation within the agriculture, construction, banking and digital technology sectors. So that’s also connectivity.

Take the submarine telecoms cable for instance. The 1,300-km long fiber optic cable system is a joint-venture between Malaysia, Cambodia and Thailand. It strengthens existing Internet capacity and greatly increases connectivity speed at lower cost.

Our Malaysian banks are in every Asean country. We are also building power plants and that promotes people-to-people capacity. 

Overall, there have been a lot of changes. But of course there are issues and things are not perfect. But we are getting there. Malaysia has allocated a huge budget in improving its own infrastructure, to improve connectivity not only within the country but also connecting Malaysia with its Asean neighbours.

KT: What would be the challenges in enhancing trade between Malaysia and Cambodia?

Dato’ Sri Mustapha: Trade means we sell what they want. They sell to us what we want. Cambodia sells us rice. And they import electrical and electronic components from us. But rice imports depend on price and quality and we also buy rice from Vietnam.

Trade on the whole depends on two things. Firstly it’s economic development. If the economy of a country is doing well, trade also goes up.

The second is the structure of production. We produce about 35 percent of the region’s electrical and electronics components.  This is something that Cambodia needs.

But we also have to take into account Cambodia’s purchasing power. At present, the purchasing power of the country is not that high. So they are not buying Malaysian produced goods, as much as they want to.

Also let us not forget the basic laws of supply and demand – whether the country we’re trying to sell to requires what we produce.

KT: Cambodia at present was what Malaysia was about two decades ago. What advice can Malaysia give Cambodia to move forward economically?

Dato’ Sri Mustapha: Cambodia has done well because of its openness and political stability. But trade depends on many things. Most importantly, there must be diversification. There must not be a dependence on only one or two sectors to help support economic growth.

There must be export and import promotion incentives to attract foreign direct investment.  And there must be more of those initiatives to attract businesspeople from other parts of Asean.

KT: Malaysian industries used to be labour intensive and then the country moved to medium and high-tech production with more human-machine interface using automation and artificial intelligence. Are the labour intensive Malaysian industries relocating to Cambodia?

Dato’ Sri Mustapha: There are two types of investment in Malaysia. One is multi-national – led by Japan and the United States. The other is local investment.

For multi-national companies, their policies will be determined by the parent company in their home country. Some of them have shifted from Malaysia to Myanmar, where labour is cheaper. The move from Malaysia is very much based on their business decisions. It’s plain economics of scale.

More Malaysian-owned companies are now setting up branches outside the country. We see that in the construction and oil palm plantation sectors. Malaysian companies have no problem moving to Cambodia. We are providing a lot of technical assistance to Cambodia’s fledgling palm oil industry. So Malaysian investment is helping that sector.

KT: In terms of technical exchange, what can we expect between Malaysia and Cambodia?

Dato’ Sri Mustapha: We have a collaboration programme with Cambodia under the MTCP or Malaysian Technical Cooperation Programme. Malaysia has been very generous in sharing its expertise in the electronics sector with its neighbours – especially our success stories.

In line with of Asean cooperation, Malaysia through the MTCP shares its development experiences and expertise with other Asean countries. The MTCP was first formulated based on the belief that the development of a country depends on the quality of its human resources. The programme forms part of the commitment of the Malaysian government towards the promotion of technical cooperation among developing countries, strengthening of regional and sub-regional cooperation, as well as nurturing collective self-reliance among Asean countries.

KT: Malaysia is helping Cambodia develop a base for a halal food production centre. What’s the progress of it?

Dato’ Sri Mustapha: Prime Minister Hun Sen discussed this with our Prime Minister Najib Razak on the sidelines of the World Economic Forum on Asean in Kuala Lumpur last year.

We’re providing a lot of training, especially on halal certification and how to go about it. We are also working with the Cambodian animal health authorities to set up a halal slaughterhouse. If all goes well, Cambodia could export halal food products not only to Malaysia, but also to Indonesia and Brunei. Towards this end a memorandum of understanding has been signed during the current WEF session.

This should give an impetus to the centre to get it moving. 

KT: What is your advice to Malaysian companies wanting to invest in Cambodia?

Dato’ Sri Mustapha: I will tell them that Cambodia is a liberal, politically stable and a developing country. There are incentives for investment in the country and its economy is doing well with a GDP growth rate of seven percent. It is also one of the fastest growing economies in Asean. There are opportunities in the construction, airport, banking and plantation sectors.

KT: How important is the WEF on Asean to Cambodia and also to the rest of the world?

Dato’ Sri Mustapha: I have been attending the WEF in Davos and in many other countries. I cannot stress enough its importance and its efficacy in promoting a country as well as trade and industry. As for Malaysia, we managed to attract several large investments from participants in the WEF in Davos. There are spillover effects which may not be obtained elsewhere. 

As for Cambodia, it has successfully managed to organise and execute the Asean chapter of the WEF. Cambodia should soon see added interest in the country and soon after that, tangible investments, which otherwise may have taken a longer period of time to materialise.

Source: http://www.khmertimeskh.com/news/38326/cambodia—s-openness-helps-it-connect-with-asean/