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Friday, June 15, 2007

Cambodia investment pact inked

Staff writer

Prime Minister Shinzo Abe and his Phnom Penh counterpart, Hun Sen, signed a pact Thursday to promote investments by Japanese firms in Cambodia.

News photo
Cambodian Prime Minister Hun Sen, escorted by Prime Minister Shinzo Abe, waves during a welcoming ceremony Thursday at the Prime Minister's Official Residence in Tokyo. POOL PHOTO

Under the pact, signed at the prime minister's office in Tokyo, Japanese firms will be treated equally in terms of regulation and taxation as Cambodian firms when they invest in the country.

The pact would bar Cambodian companies from requiring investing Japanese firms to transfer technology or procure products in the Southeast Asian nation, because such demands may discourage investments from Japan.

Japan is the top donor to Phnom Penh, but the world's No. 2 economy accounts for a mere 2 percent of Cambodia's overall trade, according to Japanese official data.

Donors are meeting in Cambodia next week, but many have expressed deep frustration over the lack of reform in the corruption-rife nation.

Hun Sen, who arrived on a four-day visit Wednesday, met Japanese business leaders at a luncheon and met with Abe earlier the day.

During the meeting, Abe expressed his intention to provide Cambodia with 3 billion yen in official development assistance over the next three years, even amid recent ODA cutbacks due to the government's austere fiscal policy.

Hun Sen, visiting Japan for the 15th time, welcomed the economic assistance.

In accordance with the pact inked Thursday, a business mission consisting of government and private-sector leaders will be sent in July to promote Japanese investments in Cambodia, Abe told Hun Sen during the meeting. Abe also stressed Tokyo's intention to back up a project to build a second major bridge over the Mekong River, the official said.

For related stories:
Investment pacts eyed with Cambodia, Laos

Information from AFP-Jiji added

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