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France backs investment

France backs investment

French Ambassador to Cambodia Christian Connan in his Phnom Penh office. Photo by: Sovan Philong

FRANCE is placing an increased emphasis on investment and loans for Cambodia’s economic development, rather than assistance through development aid, according to its Ambassador Christian Connan.

A rapidly improving Cambodian economy contributed to the change in emphasis, as well as the effects of the global financial crisis, which reduced aid flows from France along with other western nations.

“We are going to be working as much as possible by loans,” the French Ambassador said, adding that some projects – such as France’s assistance with universities and restoration work such as Baphoun temple in Siem Reap – were unsuitable for loans and would still be funded by grants.

“The French development aid has decreased, taking into account that Cambodia has now undergone important economic growth and is not a post-conflict country anymore,” he said, adding Cambodian officials had agreed with this approach.

French development aid to Cambodia last year amounted to €25 million (US$35 million), including multilateral aid to areas such as the Khmer Rouge tribunal, funding to fight disease, and economic development projects through organisations such as the Asian Development Bank.

A 2009 survey of 100 French NGOs showed they contributed about €33 million to Cambodia, with more than half of the sum coming from French private donations.

Since presenting his credentials to King Norodom Sihamoni in December 2010, the dynamism of the Cambodian economy has been a surprise, he said.

“It is a country with lots of opportunities and a key position in the Southeast Asia region,” he said.

“Cambodia has evolved quicker than the majority of least developed countries.”

The Kingdom has enjoyed strong economic growth for some ten years, during which time French cooperation has turned to further focus on economic development in areas like vocational training.

French firms were also eyeing opportunities in agriculture, notably rice production but also tourism, the hotel business, and transportation, including rail and air, said Connan.

France Telecom had also been involved in negotiations with Cambodian mobile operator Mobitel last year, but the embassy was not aware of any ongoing conversations in 2011 – though he emphasised the embassy had not been directly involved in last year’s negotiations.

In addition, Air France flights from Paris to Phnom Penh – due to begin next week – have the potential to further expand French business in the Kingdom, he said.

Cambodia maintains a favourable trade balance with France, benefiting from the European Union’s Everything But Arms initiative. The programme allows exports from Cambodia and other Least Developed Countries to export without restriction to the European Union.

“It has strongly helped the country to develop and diversify its economy,” he said.

Cambodian exports to France increased by 38.9 percent to €70.3 million, in the first eight months of 2010 compared to the same period the year previous.

Meanwhile, French shipments to Cambodia increased by 1.9 percent in the same period. Full year figures are not yet available. The French Embassy says it has seen demand for its Economic Services by businesses triple between 2006 and 2009.

To make Cambodia more attractive for French businesses, Christian Connan said rule of law, transparency, and concrete measures against corruption ought to be improved.


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