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Can the Kingdom profit from Vietnamese investment?

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Illustration by Hak Sidara

Vietnam invests in all sectors which are beneficial to the country

Politically, Vietnam has had a very strong and intricate relationship with Cambodia, especially after the collapse of the Khmer Rouge regime. This political clout has also allowed Vietnam to forge intimate and enduring economic ties with the Kingdom. Vietnamese businesses are operating many businesses in Cambodia, and their products are sold throughout the country’s markets. Recently, the first Vietnamese supermarket opened in Phnom Penh, and major corporations like Metfone are an example of the commercial success that is possible.

Vietnam is also one of the largest investors in Cambodia compared with other neighbouring countries. In 2009, Vietnam and Cambodia signed deals worth US$6 billion at a conference held in Ho Chi Minh City to promote Vietnamese investment in Cambodia. The investment mainly focuses on the exploration and exploitation of minerals, oil and gas, the construction of hydro-power electric plants and power transmission lines, rubber plantations and developing transport infrastructure. However, some critics claim that Vietnam’s investment is a problem since it impacts the nation’s interests.

Son Chhay, a lawmaker with the Sam Rainsy Party, said that every Vietnamese business is run fast and progressive and gave the Metfone mobile service as an example – it is owned by Vietnamese, but it can compete with the longer established mobile service companies.

“All Vietnamese businesses are strongly supported. Metfone is used within Cambodia’s arm forces,” he said.

He said that Vietnamese investment has impacted on Cambodia’s environment, people’s living and the whole country’s interest. He said the companies investing here do not care about the consequences on people’s lives, including land conflicts, evictions and forest destruction.

“Vietnamese investors are provided with special land concessions by the government, especially rubber plantations,” he said. “Vietnam does not only have tremendous political influence on Cambodia, but also economic leverage. It seems they are competing with China over investment in Cambodia.”

Vietnam has been given special rights to invest in minerals and other natural resource sectors which concerns Son Chhay. He said the Vietnamese are not experts in mineral exploration, which if done wrong can bring about the destruction of the environment.

Vietnamese companies including Chu Se Rubber Company Kampong Thom and PNT have been clearing the forest in Kampong Thom province to plant rubber trees, which affects people’s lives and leads to the devastation of natural resources and native trees. In 2009, the government allowed Vietnamese company Krong Buk to invest in a 6,000-hectare area in Rattanakiri province, which caused land conflicts and impacted on people’s lives and their farms.

Cambodian People’s Party lawmaker Cheam Yeap said Cambodia benefits from Vietnam’s investment, especially with job creation through rubber plantations and through taxation.

“Vietnamese companies bring their technicians and experts, but they will employ Cambodia’s workforce, so people can benefit from that,” he said.

Cheam Yeap acknowledged that there have been wrongdoings and loopholes, but said the government will deal with the problems, adding that Cambodia has investment laws and other policies for foreign investors, so companies can’t do anything they want.

“We have the authority to oversee all of the companies’ activities,” he said, “The Council for the Development of Cambodia (CDC) and local authorities study the land and forests before allowing them to do investment, making sure it will not affect the people’s interest and environment.”

However, Son Chhay said that so far there have been no Cambodian workers for the rubber plantations and he said he was concerned that Vietnamese investors would not use Cambodia’s labour.
“They will live on our land for a long time since the government provides 99-year land concessions and then what happens?” he said.

There are a lot of investors and business people in Cambodia, mostly large-scale investment done by foreigners. For Vietnamese investors, Cheam Yeap pointed out that they have the ability and capacity to invest in many sectors.

“We welcome both local and foreign investors. If they have enough capital, they can do it. We prioritise local investors, but if they cannot do it, we will allow foreign investors,” he said.

However, Son Chhay went on to say: “local investors have the ability to invest. The government should have a master plan for development, an effective law and take care of the people, making sure the people can benefit.”

Bilateral co-operation between Cambodia and Vietnam has developed in many fields, with two-way trade reaching US$1.8 billion last year and Vietnamese businesses investing about US$2 billion in Cambodia, according to news sources in Vietnam.

Kang Chandararoth, the president of the Cambodia Institute for Development Study, explained that there are always benefits and negative impacts with foreign investment, but Cambodia needs more foreign investors to increase its domestic industries.

“At this time, Cambodia is heavily contingent on foreign investment,” he said.

CDC deputy secretary general Duy Thov said Cambodia welcomed all investors in order to develop the country, and added that Vietnam has invested a lot in Cambodia compared with other neighbouring countries.

“Vietnam invests in all sectors which are beneficial to the country, including agriculture, industry, banking, telecommunication and tourism, which are beneficial to Cambodia,” he said.

Last week, the national assemblies of Vietnam and Cambodia agreed to strengthen co-ordination and create the most favourable legal foundations for increasingly deep and effective co-operation between the two sides.

Son Chhay said: “The government should provide the opportunity to local investors and guarantee that any investment does not affect Cambodia.”

What do you think about the future of Vietnamese investments in the Kingdom?
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