Cambodian officials have attended the official sales launch of the first-ever skyscraper in the capital, Phnom Penh. The twin towers are to be 42 storeys high - almost three times higher than the current tallest building. It is the first of three skyscrapers planned in the capital, where the skyline has been kept low - in part to avoid overshadowing royal palaces. But the government has encouraged the new buildings as symbols of Cambodia's development after decades of conflict. Although Gold Tower 42 is some way from completion, the launch of its show apartment and sales office attracted government ministers and overseas ambassadors. The BBC's Guy De Launey, in Phnom Penh, said the launch gave a taste of the shape of things to come. He said the solid, imposing, gold-faced structure would stand out from its neighbours on Norodom Boulevard - an area of yellow-washed, wooden-shuttered French colonial-era buildings. But Phnom Penh is in the middle of a real-estate boom - and some residents hope that building up will bring the price of homes down. "It's more affordable for people wanting to stay in town, and I think it's good. It's secure and they have all the facilities," one resident said. But other locals worry about the effect tall buildings will have on the city's character "The original Phnom Penh city [was developed to] be horizontal, not vertical," one resident said. South Korean companies are building Gold Tower 42 and another even taller skyscraper near the Mekong River.
BK Global Operations in Cambodia
Pharos Housing Complex at Sangkat Chroy, Phnom Penh
• BK Global's first case of the kind in Cambodia.
• Providing a high-end style condominium complex
comprising 780 units on the over 49,800㎡ site by the
• Expected amount of investment in total: Over 250
million US dollars (2007-2010).
• Promoted by BK Asia Pacific, the Cambodian affiliate
of BK Global, with the full scale sponsorship of BK.
Global and KoRED Housing provided.
• Aiming at inventing a trend-setting landmark and
providing a model of hi-tech and design-intensive
housing facility, which has been evidenced in Koreaby KoRED's achievements.
|Onshore Oil & Gas E & P|
• Co-promotes a large scale energy project with several multinational partners for developing oil and gas • assets on several onshore blocks of Cambodia.
|Micro Hydroelectric Power Station Network Project|
• Under feasibility study for investing in hydroelectric power plants along the Mekong Basin and other waterways of Cambodia.
Cambodia is entering into one of the international business key zones. A solid investment in the essential areas of its national economy embracing industrial and civil infrastructure, energy development, etc. is urgently needed in its every city and village. The BK ASIA PACIFIC acts as an agent for attracting funds from investors of Korea and other countries as well as providing a technical and business know-hows from its corporate partners. As it already undertaken a construction project for a trend-setting housing complex by the Mekong River as its first big business in Cambodia, the BK Asia Pacific and its corporate parent, the BK Global, are introducing a new era to Cambodians with regard to the residence culture. The joint operations of the partner companies cover various business sectors, such as private financial business, exploitations of oil and gas assets (onshore and offshore) & other energy-related business, electric power plant & transmission industry, and real property business. Any of the above-mentioned industries is to be recognized as essential parts for enhancing the sustainability of the rising Cambodian economy.
Pharos Housing Project in Phnom Penh
for more about BK Global: http://www.bkglobal.net/Partners/Partner02.asp
The Island is locate opposite to the Hun Sen Park (within the central area of Phnom Penh)
The observation tower in the image is 222m height
Phnom Penh Special Economic Zone
Despite its limited domestic market of 13.5m people, Cambodia has emerged from decades of unrest and civil strife as one of the safest places and one of the fastest growing economies in the region. Last year’s GDP growth of 13.1% has beaten all expectation. By optimizing its membership in ASEAN (1999) and in the World Trade Organization (2004), Cambodia has made tremendous efforts in quickly integrating its economy into the regional and global trading system. This is one of the 3 Least-Developed Countries (LDCs) in ASEAN that has been able to maximize its status as an LDC.
Cambodia’s export products enjoy duty-free and quota-free (DFQF) treatment to the European Union (except for weapons and ammunition), to Canada (except for dairy products and eggs), to Australia, to New Zealand and to Norway. It also enjoys DFQF for more than 8,000 tariff lines of the USA, Japan, the Republic of Korea and China have also extended similar treatment for many products from Cambodia. ASEAN’s original 6 members have also extended duty-free access to Cambodia products under the ASEAN Integration System of Preferences (AISP).
Therefore, producing in Cambodia for export to the above markets is the most economic way and the fastest way for you to propel your company’s products to the world market.
The Council for the Development of Cambodia (CDC), chaired by H.E. Samdech Hun Sen, Prime Minister of the Royal Government of Cambodia, has 2 arms to deal with private investments:
- the Cambodia Investment Board (CIB) with its 24 provincial/municipal investment sub-committees(all equipped with “one-stop service”) responsible for investments in Cambodia, and
- the SEZ Committee with its “one-stop service” chaired by the Prime Minister himself, responsible for especially addressing investments in the Special Economic Zones (SEZ).
On top of this structure, your grievances and your concerns will also be addressed in a government-private sector forum held every 6 months under the chairmanship of the Prime Minister and with the presence and interaction of all members of the Royal Government.
With such a receptive Government, with a quite good political stability, with a quite good macro-economic stability, with a reasonably sound, transparent and predictable legalframework, and with such exciting trade preferences as offered to you in Cambodia, why not investing now?
The Japanese-designed PPSEZ is certainly a prime place for you to explore and to prosper. I am looking forward to welcome you to the Land of Angkor Watt, one of the Seven Wonders of the World!
The Real Plaza Cambodia
This project will include :
- A Five Star Hotel connect with the Hotel Wing of 28 floors and 11 floors
- Four Apartment Towers - 18 floors, 16 floors, 14 floors and 12 floors
- Entertainment Center - 8 floors
Another Hotel : 12 floors
Why invest in Cambodia?
Strong Trade and International Relations
◆Cambodia can leverage on its membership of the Association of South-East Asian Nations (ASEAN)
■ ASEAN Free Trade Area (AFTA):
－Tariffs on most Cambodian exports to and imports from ASEAN will be reduced to 0-5%
by 2010 and abolished by 2018.
■ China-ASEAN Free Trade Area’s framework was signed in November 2002 and will be realized by 2010
(2015 for Cambodia)
■ Possible India-ASEAN Free Trade and Investment Area which is in discussion
■ Bilateral trading arrangements have been or are being forged between ASEAN and China, Japan and the Republic of Korea
Investments (to protect investments):
◆Cambodia has entered into bilateral investment treaties to provide reciprocal national treatments to investors, preclude expropriations and guarantee the repatriation of investments
◆Bilateral Investment Treaties with 18 countries including China, Indonesia, Korea, Malaysia, the Philippines, Singapore, Thailand, Vietnam and Japan (90% complete)
◆The Trans-Regional EU-ASEAN Trade Initiative (TREATI) to enhance EU - ASEAN cooperation (2003)
■ Facilitate trade with exchange of information on legislation, certification and inspection procedures to comply with sanitary and phytosanitary standards
■ Increase compatibility of standards
■ Facilitate customs clearance
■ Promotion of services
■ Facilitate investment flows
◆Bilateral trade agreement EU-Cambodia (19 June 2003)
■ Due to its status as a LDC, Cambodia has preferential access to the European markets: quota free, duty free
■ Binding of all tariff lines at an average level.? For services, Cambodia undertook specific commitments for almost all sectors including in particular, telecommunication services, distribution, financial and transport services
Investments (to protect investments):
◆Cambodia also has signed bilateral investment treaties with Croatia, France, Germany, Switzerland and the Netherlands
United States Trade
◆Trade & Investment Framework Agreement (July 2006)
■Under this bilateral agreement signed in July 2006, the U.S. and Cambodia will consider ways to increase trade and investment
■Provides a framework to create a bilateral forum to work on trade issues and can be a stepping stone to free trade pacts
◆Cambodia is currently negotiating with the U.S. similar terms as those negotiated with the EU, ie duty free, quota free
Multilateral Organizations Trade:
◆“Fast Track” Accession by a LDC to the WTO (2004)
■ Cambodia has made a large number of commitments relating to the institutional reforms
■ WTO accession has opened up tremendous opportunities for international trade
◆Cambodia signed a bilateral investment treaty with the Organization of Petroleum Exporting Countries
◆Cambodia is a member of multilateral organizations
■ World Trade Organization
■ Asian Development Bank
■ World Bank - International Monetary Fund
■ United Nations Economic and Social Commission of the Asia Pacific
■ World Intellectual Property Organization
■ International Labor Organisation
■ World Tourism Organisation
Expansion of External Trade
◆While imports increased by 20% (due to oil price rise), domestic exports increased by 12%
■ The import bill on petroleum products increased significantly, mainly as a result of price rise
■ Exports of textiles, clothing and footwear, which accounted for more than 70% of Cambodia’s exports continued to expand
■ Non-garment exports - traditional agricultural commodities such as rubber, wood products, fishery products and rice
- are estimated to have increased at a faster pace than the garment sector but produced only about 13% of Cambodia’s
total export earnings
■ The Government has increasingly encouraged private investment in the agriculture sector and agro-industries In order to reduce the dependence of the economy on the exports of a single commodity and to fully exploit the country’s rich agricultural potential
Diversification of destinations as Cambodia slowly expands types of exports
◆The performance of Cambodia’s exports is impressive given that the exports mainly comprise garments, for which the global trading environment has become increasingly competitive since the expiry of the Agreement on Textiles and Clothing at end 2004
◆America remains Cambodia’s largest market for exports, representing more than half of total exports
◆Ample room for export growth in particular to the US, which will be a key driver for increased exports.
It is expected that growth will continue upon further liberalization of the Cambodian economy following accession to the WTO
Cambodia’s major import groups assist to promote economic development
◆Rising proportion of capital goods and construction related materials will assist in the future development of the country and will boost future domestic productivity
◆Increasing volume of cement and construction material over 2004-05 of 34.5% driven in part by the expansion in construction activity in Phnom Penh
◆Remains reliant on imports of petroleum products but this is expected to change with the development of the oil exploration projects
◆Thailand remains the leading source of imports
Cambodia is the most open economy of the LDCs
Cambodia is Open for Business
・ Cambodia has one of the most open economies in the developing world and the South East Asian region
- 100% foreign ownership investments are allowed in nearly every sector and activity except the ownership of land
・ The Government is committed to a pro-business/investor model
- The Index of Economic Freedom ranks Cambodia ahead of our key competitors in the Region
(such as Thailand, Indonesia and Vietnam)
・Factors considered in the Index include
- Fiscal burden - Cambodia has an attractive corporate tax rate of 20%
- Regulatory barriers - The CDC has been steadily improving its facilitation services for investors
- Labor market restrictions - Liberal access to Cambodia’s young and trainable workforce, employment permit system to allow Cambodians to work overseas
- Trade policy - Cambodia has largely removed all quantitative restrictions in international trade. An open-door policy with respect to imports is pursued
・The most significant changes in industrial policy have been an emphasis on openness towards private foreign investment and privatization and broad-based development with emphasis on SMEs development
Cambodia’s fast-track accession to WTO demonstrates the country’s commitment to leverage on trade for its development strategy
Benefits of Trade Liberalization and WTO Accession
・ Cambodia is the first LDC to have acceded to WTO and sends a strong positive signal to the international community of the future direction of its economy
- The three key advantages to Cambodia upon accession to the WTO are:
・Access to markets
- Cambodia will be treated by all members as a most-favored nation, and cannot be the subject of trade discrimination
- Superior market access to a wide range of products and countries
- Capacity building
・Leveraging the benefits of WTO requires skilled public service and responsive private sector
- To support capacity building ,Cambodia took advantage of the Integrated Framework of Trade Related Technical Assistance, a joint taskforce of 6 international institutions including the World Bank.
- The Ministry of Commerce has established “Inquiry Points” to allow foreign investors to better understand Cambodia’s trade policies and market structure
- Reducing market distorting licenses and tariffs will eliminate a significant source of corruption
- Increased transparency including public listing of laws and regulations and the opening of sectors like telecommunications to competition
- The main beneficiaries from the accession to WTO are expected to be:
・ Ordinary Cambodian citizens
- Greater choice and lower cost of imported products and domestic products with some import content
- Cambodian private sector and its workers
・Improved investment climate and the establishment of private sector-supporting institutions
The reform of the Government sector is underway to enhance a quick and efficient development
Improving Government to Help Business Growth
Five key areas were identified under the Governance Action Plan:
◆Improving Service Delivery
■ Focus for ministries and their development partners to explore ways to improve service delivery.
■ Enhance accessibility and transparency and reduce bureaucracy
◆Enhancing Pay and Employment
■ Optimizing government resources through budget reallocations and refining the use of targeted allowances to enhance performance
■ Redeploying civil service to better meet needs
■ Strengthening human resources management and control
■ Rapidly develop core functions and skills such as strategic and operational planning, financial and personnel management
as well as project management for Cambodia to reduce its dependency on international technical assistance
◆Promoting information and communications technologies
◆Implementing the Priority Mission Group Program
■ Designed for ministries and agencies to implement policy and programming priorities
■ The program will be introduced in phases initially targeting priority change initiatives and improving the delivery of public services
The Government pro-actively seeks to increase the participation and engage the private sector in the development of Cambodia
The Private Sector Forum (“PSF”) is one of the Cambodian Government’s initiatives in recognition of the importance of transparency
◆A framework for ongoing, structured dialogue between business and the Government with the view to improve the business environment.
◆A platform for businesses to offer expertise on a range of policy and regulatory reforms
■ Examples of the PSF’s success: high level consultations on investment and tax laws, the introduction of private sector monitors within the Ministry of Commerce, improved labor standards, and negotiations on cost reductions for major road concessions
◆Core work is undertaken during the year by 7 sector specific public-private working groups, consisting of government and business counterparts and co-chaired by one minister and one business representative
■ The Minister of Economy & Finance is the coordinator of the Working Group process
■ The Secretary General of CDC serves as the PSF’s secretariat, while the IFC acts as its coordinating bureau
◆The commitment of the Government to the PSF is underlined by the personal participation of the Prime Minister as the Chair in the bi-annual PSF
◆The PSF has demonstrated its ability to serve as a catalyst for public-private dialogue
Stable Exchange Rate
・ Despite high oil prices, exchange rates have been relatively stable
- The Cambodian riel depreciated very marginally to 4,116 at the end of the 2005 from 4,031 at the end of 2004
・The NBC will continue with the managed float exchange rate policy.
- No interventions have been and will be made to target a specific exchange rate.
- Interventions are only made to limit exchange rate volatility
Financial sector and system have strengthened
◆Over the last decade, developments in the banking sector have been generally remarkable, following the completion of bank restructuring programs in 1999
■ This was witnessed by banking and financial stability, increased financial services promoted through the institutional and legal reforms under the financial sector blueprint. The 10-year blueprint for 2001-2010 is currently being updated and the next 10-year blueprint which is under discussion will provide a long-term financial sector development plan for the Government
◆Net foreign assets grew at a CAGR of 14.4% over the 2000 to 2005 period
■ Increased deposit flow from the private sector into the banking system
◆Foreign currency deposits grew at a CAGR of 21.8% over 2000 to 2005 period
◆Credit granted to the private sector grew at a CAGR of 19.4% over the same period
Strong and Increasing Reserves Position
◆Reserves have grown tremendously over the last 5 years
◆The reserve position is expected to be further strengthened going forward as a result of:
◆Increased trade flows due to opening up of new markets following liberalization prescribed by the WTO
◆FDI inflows prompted by higher investor confidence, greater transparency, on-going reform
Inflation Remains Under Control
◆Despite high fuel prices, the Government has been successful in keeping inflation in check
◆The tight fiscal policies and the growing influence of monetary policy in controlling money supply expansion have contributed to this stability
◆Inflation reached 6.7% (end of period) and 5.8% (period average) in 2005, which is higher than the average of the last 5 years mainly due to the impact of higher oil price