A proposed facility on the border with Vietnam is expected to improve

the quality of local agricultural goods, say government officials

Photo by:

AFP

Foreign Minister Hor Namhong, speaking to reporters in this file photo, has announced a deal with Vietnam that is intended to boost bilateral trade.

CAMBODIA and Vietnam have agreed to build a new industrial processing factory aimed at boosting the two countries' agricultural exports, Foreign Ministry Hor Namhong has said.

The factory will promote cooperation between the two largely agricultural countries and raise quality standards on export goods such as beans, corn, palm sugar and cashew nuts.

Officials say the products would be aimed at the local and export markets.

"The factory will be constructed near the border between both countries in order to capitalise on each country's resources," Hor Namhong said at the weekend, although he did not specify the exact location.

News of the partnership follows Prime Minister Hun Sen's return from a state visit to Vietnam, where he signed a trade agreement to increase cross-border commerce.

Trade between Cambodia and Vietnam reached US$1.7 billion through the first eight months of this year, Hor Namhong said, up from $1.19 billion in 2007.

"Vietnam has more modern technology, capital and human resources than Cambodia, so [the new factory] will offer a significant tool to develop our economy," he said.

Trade boost

Le Bien Cuong, the commercial counselor at the Vietnamese embassy in Cambodia, said hopes were high that the factory would be completed soon, and that the plant would raise the quality of local products to international export standards.

"Both countries have plenty of human resources," he said.

"We are well prepared to comply with demanding international standards," he said.

"We have a lot of raw materials, especially agricultural products, so we will be able to increase agricultural exports to foreign markets."

He added that the new partnership would create jobs and improve standards of living on both sides of the border.

Independent economist Sok Sina said the partnership with Vietnam stood to improve technology in Cambodia and help both countries take fuller advantage of their agricultural sectors.

"Our countries are rich in raw materials, and the factory will help us find new uses for these materials," he told the Post.

Local support

But critics say the government has not done enough to support Cambodia's agricultural sector directly through greater investment in local businesses.

"I don't support the establishment of this new factory. It will create jobs, but we have never seen much benefit from these projects," said Pok Leak Reasey, executive director of the Khmer Nature Enterprise, which manufactures sugar, vinegar and beverages from palm fruit.

Vietnam has more modern technology, capital and resources than Cambodia.

"We are entrepreneurs, and we are disappointed that the government has not given us the financial support necessary to increase production," he added.

In the last 10 years, local entrepreneurs have been left to themselves to run their businesses while more of our people are forced to work for foreign companies," he said.

Trade with Vietnam has been helped by the simmering tensions with Thailand over land around Preah Vihear temple.

Fears of further disruptions have led local companies to turn to Vietnam for raw materials.

Last week's official trip to Vietnam also produced trade agreements that would allow more Cambodian goods into Vietnam tariff free.