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Region's integration seen as key to recovery

Region's integration seen as key to recovery

REGIONAL integration is key to Asia's recovery from the global financial crisis and could position Cambodia to emerge as a more attractive trading partner with its larger neighbours, participants at a pan-Asian economic forum said Tuesday.

"Asia will recover more quickly than other regions. Cambodia is seen as very well-positioned. [Bilateral] trade is currently US$1.6 billion, and we hope to see that increase to $2 billion in about a year," said Ngo Duy Ngo, vice president of the Vietnamese Ministry of Affairs' Diplomatic Academy of Vietnam.

"Cambodia and Vietnam have a lot in common that makes them natural trade partners," he said.

Amid worsening global economic news, participants at the Fifth Asia Economic Forum remained generally upbeat about the region's prospects, but said that cooperation was key to weathering the worst financial storm in decades.

Some suggested further consolidating as a bloc by adopting a regional currency to reduce dependence on the US dollar. "We want to create an Asian currency using the example of the euro.... This would be part of the process of regional integration," said Akinori Seki, president of the Sasakawa Peace Foundation in Japan.

"We are much too dependent on the American dollar - it is time that Asia had its own currency," he told the Post.

"Cambodia, as a dollarised economy, needs to be a part of the process," he added, saying that the proposal has been submitted to the ASEAN secretary general for the upcoming Pattaya summit. Officials from China and Vietnam - two of Cambodia's top allies - said the Kingdom, with its relatively low exposure to the global economy, is poised to benefit from financial downturns in larger, more developed nations.

"[Vietnamese] trade and investment is increasing, despite the global financial crisis," said Tran Minh Cu, first secretary of the Vietnamese embassy in Phnom Penh.

"Vietnamese companies understand more and more the benefits of investing Cambodia ... I expect the economy will start to turn around at the end of the year," he said.

Until then, however, international financial institutions are predicting tough times for the Kingdom, with the World Bank revising down its growth outlook for 2009 from -0.5 percent to -1 percent.

But Douglas Clayton, managing partner at the Leopard Group investment fund, said Cambodia's low corporate taxes of 20 percent, political stability and low debt to gross domestic product ratio are among its attractions.

"Poor countries have the opportunity to control their own destinies because many of their problems are self-imposed," he said.

Economists agreed that Cambodia could figure heavily in the region's post-crisis economy.

"Cambodia is facing tough times, but the country is on track for a recovery... Cambodia has great potential," Din Merican, adjunct professor at the University of Cambodia, said.


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