CPF to set up feed mill plant in Cambodia
A new silo for corn in Cambodia and a new feed meal plant in Laos, Charoen Pokphand Foods (CPF) are going to invest a combined THB 250 million (US$ 8.40 million) to strengthen their agri-industrial business ahead of the Asean Economic Community (AEC). The investment through its subsidiaries involve the purchase of a corn silo and drying plant in Cambodia and the establishment of a new feed-mill plant in Champasak province, south-western Laos.
The company has also further invested in its three core businesses of feed production, farming and food processing in the two countries. Its businesses there are focused on the efficient development of the supply chain to access quality raw materials. This is aimed at making CPF well placed to serve rising demand once the regional single market is established in 2015.
Most recently, the company has invested in developing a silo and drying plant for corn in Pailin province, western Cambodia. The investment is to ensure high-quality raw material to serve its feed production for both the domestic market and export.
CPF is continuing to invest in Laos and Cambodia to take advantage of increasing purchasing power of people there. The two countries are fully supportive of the CP subsidiaries. Political stability in both countries has prompted economic growth to ensure sustainable business development.
Meanwhile, investment in Laos has reached approximately THB1 billion (US$33.61 million) in the feed, farm and food businesses. However, the food business is in the beginning stage, with only Five Star grilled chicken launched so far.
CP operates one feed mill in Vientiane with production capacity of 10,000 tonnes per month. The new plant in Champasak province will have initial production capacity of 5,000 tonnes per month to serve consumption in southern Laos. Having a plant there will reduce the company's logistical cost by avoiding the need to transport goods from Vientiane.
More to US-Cambodia relations than rights
A meeting between US President Barack Obama and Cambodian Prime Minister Hun Sen on November 19 took on added significance given the backdrop of the 21st Association of Southeast Asian Nations (ASEAN) Summit, which was held in the Cambodian capital, Phnom Penh in the same week.
Focusing on human rights, fundamental political freedoms, and electoral democracy in Cambodia, the conversation was generally described as "tense" by media. Obama touched a raw nerve by mentioning deteriorating rights situation, the fairness of upcoming 2013 general elections, and the issue of political prisoners. Deputy National Security Advisor Ben Rhodes, who accompanied Obama, said it will be difficult to deepen bilateral relations if the Cambodian government did not improve its human-rights record.
However, Obama's visit was not only about human rights; wider US interests in the region including strategic and economic relations must be taken into account. The presence of Obama in Cambodia was a significant event in the two countries' diplomatic relations. It was the first time a sitting US president visited this small and poor country, and it reaffirmed the long-term and sustainable US commitment to engagement in Asia.
US-Cambodia relations are shaped and framed by the US "pivot to Asia" strategy, which is dynamic and comprehensive. The strategy covers a wide range of activities including the strengthening of bilateral security alliances, forging of a broad-based military presence, engaging regional multilateral institutions, expanding trade and investment, advancing democracy and human rights, and deepening working relationships with emerging powers. It is an extension of the US smart power project, which includes, as suggested by the 2007 CSIS Commission on Smart Power, five pillars: alliances, partnerships, and institutions; global development; public diplomacy; economic integration; and technology and innovation.
Issues surrounding human rights are a key stumbling block in bilateral relations that need to be addressed objectively and collectively. Since 1992, the US has provided more than US$800 million to strengthen democracy and improve human-rights conditions in Cambodia. USAID programs have been diversified to include aspects such as education, public health, infectious disease, food security, climate change, private-sector competitiveness, and good governance. The US has contributed a lot to strengthening the role of local civil society organizations in addition to promoting democratic principles and protecting human rights.
Bilateral relations have steadily improved since the resumption of diplomatic relations in 1992. Cambodia was granted Most Favored Nation (MFN) status from the US in 1996 and in 1999 the two countries signed a Bilateral Textile Agreement (BTA) to link labor standards with trade. Under such favorable treatment, the US has become the biggest market for the garments and footwear (about 70%) made in Cambodia. The industry employs 350,000 people, mostly young women.
The US private sector is very much interested in expanding and deepening investment and trade with the region in general and Cambodia in particular. In 2011, US investment in Cambodia was more than $144 million, triple the amount invested in 2010. In remarks at the US-ASEAN Business Forum in Siem Reap in July 2012, Secretary of State Hillary Clinton stated "Our economic ties are already strong. ASEAN and the United States are large trading partners. Last year, US exports to ASEAN exceeded $76 billion, and that was up 42% since 2009. We have more than twice as much investment in ASEAN as we do in China. So there is a great deal of potential for continuing to grow our economic activity."
US-Cambodia defense cooperation has gained momentum since 2004 after many restrictions were eliminated, paving the way for direct military-to-military contact and engagement. Training and capacity building are the key areas of cooperation. Joint training and military exercises have been conducted regularly under the themes of disaster relief, counter-terrorism, demining activities, and peacekeeping operations.
During the visit of Cambodian Defense Minister General Tea Banh to Washington in 2009, Defense Secretary Robert Gates reaffirmed the commitment to strengthen the capacity of the Royal Cambodian Armed Forces (RCAF) in peacekeeping operations, maritime security, and counter-terrorism. In 2010, Cambodia, with support from the US, participated in the Cooperation Afloat Readiness and Training (CARAT) program and co-hosted the Angkor Sentinel with the participation of 1,000 peacekeeping personnel from more than 20 countries. The second CARAT program was conducted in October 2012, focusing on maritime security skills such as maritime interdiction, diving and salvage operations, maneuvering, and disaster response
The annual Bilateral Defense Dialogue (BDD) established in 2008 is a foundation for dialogue, cooperation, and confidence-building measures. It focuses on operational topics of mutual concern and coordination of security cooperation activities. The BDD illustrates the broadening and deepening of the military-to-military relationship and is an additional mechanism to further strengthen the bilateral relationship. In September 2009, Cambodia and the US created a Security Cooperation Coordination Group that meets regularly to discuss operational issues involving theater security cooperation.
In addition, there were several port visits by US naval forces to promote relations between militaries and strengthen mutual strategic trust between the two countries. The latest visit was on May 5, 2012 by sailors from the US 7th Fleet flagship USS Blue Ridge and Marines assigned to Fleet Anti-terrorism Security Team Pacific.
The recent bilateral talks on November 16 between US Defense Secretary Leon Panetta and Tea Banh in Siem Reap provided an opportunity for both countries to elaborate more on defense cooperation, especially in capacity building of the Royal Cambodian Armed Forces, cooperation on the recovery US soldiers missing in action from the Vietnam War-era, and the on new US strategy in the Asia-Pacific. Panetta reaffirmed the US goal of ensuring that the Asia-Pacific is a zone of peace, stability, and prosperity, and the commitment to work with ASEAN to increase its capacity to maintain peace and stability in the region.
US-Cambodia relations have been improving over the last decade and reflect a promising trend. Defense and economic cooperation have taken significant steps to build trust and mutual accommodation with common interests. However, as the recent talks between Obama and Prime Minister Hun Sen indicated, Cambodia needs to work harder to improve its record on human rights and democracy to advance relations with the US to a new level.
It is not a big challenge for the current Cambodian administration to improve the situation since it has established a relatively good foundation to promote and protect human rights and fundamental freedoms. It is a matter of continued political will, leadership, and participation from the people.
Continued US engagement with Cambodia on the issue of human rights is necessary but it needs to be more objective and scientific. Both countries should concentrate on convergent forces - economic and strategic interests - and continue to sincerely work together to overcome remaining challenges. It is in the interests of the two people and the global community of nations to raise the standard of the universal values of human rights and fundamental freedom. Cambodia and the US can continue working together on this issue.
In the rapidly changing regional security and economic environment that is increasingly complex and uncertain, there is a need to build and nurture trust and confidence. A good and healthy US-Cambodian relationship can contribute to peace, stability and development in the Asia Pacific. It would be a serious setback if the human rights issue overshadows other areas of cooperation and needs to be addressed in a holistic way.
Cambodia reliant on China for a range of infastructure projects
Cambodia suffered through the economic downturn that came about following the financial crash toward the end of 2008. In 2009, the economy contracted 1%, which wrought significant hardship for many hundreds of thousands of people, most notably those employed in the garment sector as the export of clothing fell by around 20% in value.
This year, the economy is picking up and is expected to grow by 5%, driven primarily by the returning health of world trade and a growing tourism industry. These sectors are significant; the garment industry alone contributes 70% to Cambodia’s export earnings. But, of even greater importance, according to government, is the development of the country’s infrastructure, which will lay the ground work for future economic development.
The recession hit infrastructure development programs in the country hard, foreign investment plummeted from over US$10 billion in 2008 to just US$5.88 billion in 2009. As the world economy picks up once more, China is expanding its presence in the country with a range of infrastructure projects.
One of these is the construction of a hydro-electric power plant 180 kilometres west of the capital, Phnom Penh. The plant will generate 338 megawatts when it is completed and will cost around US$550 million to develop. The dam is just one aspect of a much larger national plan for hydroelectric power, which envisions 9 additional hydroelectric power plants operating in the country by 2019.
These plants would add 2 gigawatts of power to the country’s national grid, according to Cambodia news reports.
The cost, which would run well above US$5 billion, is more than the Cambodian government can afford through domestic investment initiatives and this is where China will play a major role in the development of the country.
Already, the China Export-Import Bank is funding the development of the 338 megawatt dam, which will be built by the China Huadian Engineering Company. This dam on its own will more than double the entire energy-generating capacity of Cambodia and will vastly improve electrification of the country.
Currently, only 20% of Cambodian homes have permanent electricity.
China’s investment in the country is therefore essential to the long-term viability of the economy, which is expected to grow by almost 7% next year, and the China Export-Import Bank is investing in other areas apart from hydroelectric power production.
A US$310 million project to improve the country’s irrigation systems has received funding of US$240 million from China. Such a project is important in Cambodia where more than 67% of the employed population work in the agricultural sector.
China has been expanding its reach beyond Cambodia, however. In addition to heavy investment in Africa, the Asian powerhouse is developing its influence across the Southeast Asian, Central Asian and Northern Asian regions, most notably in the area of essential infrastructure projects.
The possibility of a Trans-Asian Railway only got real attention after China threw its weight behind the project, which would see a 14,000 kilometre railways line for freight transport built between Turkey and Singapore for the fast and efficient transport of goods. Such a project would have huge benefits for the Asian countries involved, including Cambodia.
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