Prime Minister Hun Sen on September 12 voiced support for the establishment of “green economic or investment zones” in ASEAN, a proposed new class of special eco-friendly business areas, to transform the bloc into an attractive and dynamic trade and investment hub run by cleaner and greener energy solutions.
The premier made the remark while presiding over the opening ceremony of the second day of the 2022 ASEAN Leadership and Partnership Forum, held from September 11-12 under the theme “Partnership for Cohesive and Responsive ASEAN”.
The event was co-organised by Malaysian think tank KSI Strategic Institute for Asia Pacific and the ASEAN Business Advisory Council – the bloc’s apex private sector body – as well as the local Asian Vision Institute (AVI) and Cambodia Chamber of Commerce.
Hun Sen commented that he had proposed establishing the “ASEAN Green Deal” initiative at the recent 55th ASEAN Foreign Ministers’ Meeting, which he contended would allow the bloc to gradually transition into a sustainable and resilient community that effectively uses resources.
He had suggested that the climate change mitigation-oriented deal cover a wide range of areas such as infrastructure, energy, manufacturing, consumption, agriculture, transport, environment and finance, with technology, innovation and circularity being the enabling factors.
“I would like to welcome the initiative of the KSI Strategic Institute for Asia Pacific and the Asia Vision Institute to establish the ‘green economic or investment zone’,” he said, arguing that with the new Law on Investment, Cambodia is “ready” to host the first of its kind.
The premier also voiced support for the establishment of the Cambodia Economic Development Fund, which he said would support the digital transformation, spur development in the artificial intelligence (AI) landscape, and provide the Kingdom’s workers with the necessary skills and tools to adapt to the Fourth Industrial Revolution (4IR).
“To achieve a sustainable and inclusive economic recovery, we must continue to promote economic integration and turn ASEAN into an attractive and dynamic trade and investment hub, particularly by reducing tax and non-tax barriers, and providing mutual supports to accelerate the implementation, and take full advantage of free trade agreements [FTA], especially the RCEP [Regional Comprehensive Economic Partnership] Agreement, which is the largest free trade agreement in global history,” he added.
Speaking to The Post on September 12, Thong Mengdavid, research fellow at the AVI’s Mekong Centre for Strategic Studies, commented that the “green economic or investment zones” would be a significant initiative for Cambodia and the region as the world moves towards cleaner and greener energy, and away from fossil fuel dependence.
He stressed that the zones would promote regional green development and inspire regional young thinkers and policymakers who specialise in economics, finance, industry, climate science, and technology-related fields to develop sustainable and inclusive business models to draw in more investors.
“Narrowing the development gap within ASEAN would enhance regional resilience and promote regional and global economic development,” Mengdavid said.
He said the new investment law – promulgated on October 15, 2021 – would “further strengthen Cambodia’s credibility to become the new regional investment hub that could offer regional and global investors a transparent, friendly and credible business environment”.
In addition, the Cambodia Economic Development Fund would make it easier to channel funds to local think tanks to conduct research and publish research results and policies recommendations that would allow the Kingdom to create highly-sustainable development policies, according to Mengdavid.
At the same event, Hun Sen also announced the launch of the ASEAN Economic Club, which he said would make ASEAN economic integration work more cohesive by improving monitoring, evaluation and advisory capacity regarding the RCEP, FTAs, regional agreements and other pertinent economic deals, while ensuring independence and professionalism.
Anthony Galliano, the group CEO of financial services firm Cambodian Investment Management Co Ltd, told The Post that the prime minister’s speech “was forward-thinking and embraces the future and the need to immediately tackle green and sustainable development”, adding that it was “a true vision of leadership”.
“Climate change is flexing its muscles with floods, droughts, incessant heat waves, and rising sea levels, it is global issue of mammoth proportion requiring immediate action. Increasingly, investors will be more focused on integration of environmental, social and governance [ESG] factors in their investment decision making.
“Cambodia is truly well positioned in this space, given its concentration in manufacturing textiles and apparel as there is already growing demand for sustainability from companies and investors seeking new green ‘special economic zones’ [SEZ] around the world.
“[SEZs] have been used by many developing countries as a policy tool to promote industrialisation and economic transformation and with the increasing concern on the global climate change and environmental sustainability, a new trend of industrial zones is gaining traction with an objective to develop integrated solutions to addresses low-carbon or green growth.
“Green economic zones will be a pillar for regional sustainable development and play a crucial role in achieving the government’s green growth objectives, and any international environmental commitments,” he said.