LAST year the United States removed both Cambodia and Laos from a trade blacklist of so-called “Marxist-Leninist countries”, a move which opened up the Kingdom to support from the US Export-Import Bank.
More than a year on, as President Barrack Obama pushes to increase American exports, officials are reflecting on the effects of the decision.
Though some experts have said Cambodia has yet to gain material benefits from the move, as the fallout from the global financial crisis is still affecting the US economy, they are united in the belief it was the right thing to do.
President of the American Chamber of Commerce Bretton Sciaroni, Senior Partner of Sciaroni & Associates, said that the removal of Cambodia from the so-called “blacklist” 15-months ago had been long overdue.
“The deletion of Cambodia from the list was just an overdue legislative action,” he said.
“But so far as I know, the availability of support from the US Export-Import Bank has not been utilised by any American companies yet.”
He added that the financial crisis had severely impacted American interest in the Kingdom.
“This will not always be the case, but it has been true for the last few years. One of the unfortunate consequences of the global financial crisis is that it slowed down the interest in US companies in trading with and investing in Cambodia,” he said.
A spokesperson for the US embassy in Phnom Penh, who wished to remain nameless, added in an email that as of late 2009, the Export-ImportBank could provide financing for purchases of US exports by private-sector buyers in Cambodia, on repayment terms of up to seven years.
“Ex-Im Bank support typically will be limited to transactions with a commercial bank functioning as an obligor or guarantor; however, it will consider transactions without a bank undertaking on a case-by-case basis. We are not aware of any transactions which have been approved yet,” said the spokesperson.
Cambodian officials, though welcoming the de-listing, also said little had changed.
Cambodia’s secretary of sate for the Ministry of Commerce Ok Boung said that: “I don’t see that anything remarkably [has happened since the decision]; however, it is good for us.”
But one expert believes the situation could change.
Kang Chanararot, an independent economist and president of Cambodia Institute for Development Study, said the policy was a very positive sign for the Kingdom in terms of business and investment.
“The measure not only gives more confidence to US investors or businessmen, but also acts as a very good attraction for other foreign investors based in the US to come to us in the near future.
“Even if the outcome [of the decision] has not yet appeared, I think we will still gain its benefits.”
Bilateral trade between Cambodia and the US rose more than 12 percent to US$1.299 billion in the first seven months of 2010, compared to the same period last year, according to the US census bureau’s foreign trade division.
Cambodia’s main export to the US market was garments, and its main imports were electronics and technology, said Ok Boung.
According to the US embassy, 643 American companies are registered in Cambodia.
Since 1994, the Council for the Development of Cambodia has registered approximately $71 million worth of US-backed investment, $6 million of which was approved in the first half of 2010.
The embassy spokesperson, however, said that the obstacles to greater foreign investment remained – including corruption, excessive bureaucracy, poor infrastructure and high energy costs