'We Expect India Relocates IT  Assembly Line Units in Cambodia'

INDIA is one of best friends of Cambodia, a member of ASEAN bloc. India is worth of getting "support, continued" support from member countries to enhance ASEAN-India bilateral relations. India deserves it, asserts Mr. Oknha Kith Meng, President of the Phnom Penh Chamber of Commerce (Cambodia Chamber of Commerce). In an interview by Amitabha Sen the PPCC President suggested that to boost Indo-Cambodian bilateral trade one best solution is to "somehow India’s investors relocate their production units to Cambodia and start diversifying products of Cambodia in order to raise exports from this country." Observing that Indian IT and pharmaceutical industries are "strong and well-known recently" Mr. Meng said that Indian investments in these two sectors would "greatly help Cambodia in terms of increasing its exports as well as jobs creation." About the scope of Indian IT industry's partnering the growth and prosperity of Cambodia the PPCC President said: "Our expectation is that India would relocate its Assembly Line (hardware, software and semi-conductor) industries into Cambodia. If this is possible, Cambodia would be able to provide jobs to its people as well as to boost exporting."

AS: Year 2006 is a historic year for both India and Cambodia. 25 years back in 1981, India recognized the Heng Samrin regime and opened its Embassy, when much of the world shunned Cambodia that time. How would like to view the 25-year evolution of Indo-Cambodian bilateral relationships? 

OKM: Friend in need is friend indeed. India has demonstrated adherence to this relationship and has been with Cambodia even in a very difficult circumstance. I feel and consider this gesture as real friendship and honest. To me, India is one of the best friends of Cambodia. 

AS: On the other hand, on the eve of finalization of FTA with ASEAN (expectedly few months away from now), India remembers gratefully and cordially the support Cambodia has been extending and still extends, for closer India-ASEAN relationships. What is your expectation, as an ASEAN member, from India in enhancing the economic and trade relations between India and ASEAN member countries? 

OKM: Judging from my personal understanding, a good friend like India is very much deserved of this support and continued support. As an ASEAN member and as a good friend of India, I expect that India shall increase its investment in Cambodia not only in the area of trade but also in the area of industry, technology, culture and tourism. 

AS: At the micro-level, both Cambodia and India signed a number of agreements to strengthen and develop trade, economic, scientific and technological cooperation. Most of them were signed up during the former Indian Prime Minister Atal Behari Vajpayee’s visit to Cambodia in 2002. Three years have passed since then. How would like to assess the impact of those agreements on different sectors of the Cambodian economy? 

OKM: We thank India for transforming the relationship and friendship of the two countries into economic cooperation and development. The agreements that India and Cambodia had signed together proved the eagerness of both parties in improving the trade, economic, scientific and technological cooperation. These were witnessed by the creation of IT Center offering free access to thousands of Cambodian students and the creation of Cambodia – India Entrepreneurship Development Center. However, agreements have not yet been fully expedited and not yet strong enough to heighten both countries economy. We insist that India enhance the implementation of these agreements by putting more investment into Cambodia. 

AS: A declining trend is witnessed in trade between these two countries. From US$ 20.45 million in 2002-03 it gradually declined to an estimated US$ 17.32 million. What according to you could be the main reasons behind such a falling trade between these two countries? What is your expectation of growth in trade between these two countries? 

OKM: To me, this slight decline doesn’t indicate any major reason. I don’t think this issue relates to political motivation or hatred but, on the one hand, I believe we haven’t done enough during this period to maintain the high momentum and on the other hand, because of the high competition from other neighboring countries. To me I think both partners (Cambodia and India) should get together and discuss on how we can overcome our weakness and re-boost trade between our two countries. I hope with the intervention of the Cambodia Chamber of Commerce, trading between the two countries will increase to the level of the year 2002 or even higher. 

AS: Export basket (exports to India) for Cambodia is not strong enough to raise the trade level. It’s more or less one-fifth of a million dollar. Why so? Could you please identify products and measures to step up exports to India? 

OKM: I think the products that Cambodia can produce, India also can produce at similar price but some products that India can produce Cambodia can not produce. This is the reason why Cambodia’s export to India is very low and India’s Export to Cambodia is higher. The one best solution to this problem is to somehow India’s investors relocate their production units to Cambodia and start diversifying products of Cambodia in order to raise exports from this country. Furthermore, we need to reserve some money to do market research in order to determine market segment available for Cambodia’s products. As you know Cambodia is potential for agriculture production and therefore, we encourage India to invest in packaging technologies and agricultural related industries in order to promote export of this kind of product from Cambodia.

AS: Cambodia is like a small brother in the eyes of a huge country like India, which has over a billion populations. What kind of favorable foreign trade policy or trade concessions you would be expecting from India? Do you think Indian government’s current trade policy towards Cambodia is satisfactory enough or it needs something more to offer Cambodia to strengthen the bilateral trade basket? 

OKM: As you are aware that Cambodia is still weak almost in every area. As such, our internationalization of trades is relatively weak. Even though, opportunities and favorable foreign trade policy or trade concessions were being offered, it seems that majority of Cambodian businessmen have not yet been able to reap this benefit. I think the best solutions to Cambodia’s export is to, first, strengthen their local production capacity and to gain experiences. When their competition in the local market is already strong then only they can move to foreign markets. 

AS: Could you tell us sectors where Indian investments in substantial measures could help strengthen Cambodian economy to be at par with comparable countries? What would be your expectations from the Indian private sector enterprises? 

OKM: To my observation, for this fast moving world of globalization, technologies were the main driving force of economic development. Indian IT and pharmaceutical industries are strong and well-known recently. The investment in these two sectors would greatly help Cambodia in term of increasing its export as well as jobs creation.

AS: In Information Technology sector India is offering its help to strengthen your country’s position. What is the prospect of small and medium Indian IT firms to do business with Cambodia? Which are the areas in the IT sectors where Indian IT firms can offer collaborative projects? 

OKM: As I mentioned earlier, Indian IT is strong and well-known. Our expectation is that India would relocate its Assembly Line (hardware, software and semi-conductor) industries into Cambodia. If this is possible Cambodia would be able to provide jobs to its people as well as to boost exporting. 

AS: Last but not least, what globalization means to you and how it could be embedded in the Cambodian economy, which would augment employment opportunities, improve socio-economic systems of the country? Do you think developed nations should sacrifice more to take the developing nations together in the pursuit of achieving the Millennium Goals set out by the United Nations? 

OKM: To us globalization means high competition from throughout the world. Those who are quick to adapt and overcome to the changes will survive and benefit from it but in contrast those who are slow and conservative will be left behind and suffer. Cambodia has been aware of this trend and has taken a lot of steps already to keep pace with the global changes, but Cambodia is not yet able to cope with the magnitude of the globalization due to suffering from the lack of resources and necessary infrastructures. Cambodia hopes that developed nations would extend their helping hands to take developing nations together in order to achieve the Millennium Goals as set out by the United Nations.

India - Cambodia bi-lateral trade

March 15, 2006