With diplomatic and economic ties between Japan and Cambodia dating back to over 60 years, Japanese Ambassador to Cambodia Yuji Kumamaru sat down with Post Plus for an exclusive interview to discuss the relationship between the two countries, economic growth and the future development of the Kingdom.
Since the early 1990’s, Japan has played a significant role in helping to maintain Cambodia’s political stability. As the Kingdom gears up for the next election cycle, how has Japan aided in helping reform Cambodia’s electoral system?
At the Cambodia-Japan summit meeting in December 2013, Japan agreed to support Cambodian efforts for electoral reform. Since then, Japan has dispatched study missions and formulated a support plan which consists of three pillars: dispatching experts, providing technical inputs on electoral processes and providing equipment. Under these pillars, Japan has, in close cooperation with the NEC and other relevant Cambodian authorities, made its utmost effort in establishing a more reliable election system.
In addition, Japan has been the biggest bilateral donor to Cambodia in terms of developing infrastructure. Can you outline the scale and scope of some of the projects Japan has been involved in?
Since the peace agreement was signed in 1991, Japan has been a top donor to Cambodia. The most significant aspects of Japan’s support to Cambodia are its quality and variety. Cambodia’s newest bridge, “Spien Tsubasa” or “Tsubasa Bridge”, was built by a Japanese grant to Cambodia worth $120 million and has been designed to endure for many years. This bridge should, therefore, contribute to Cambodia’s development for many years into the future. Japan’s efforts have supported many other sectors too, not only infrastructure. For example, Japan has dispatched experts in many fields including, among others, policy planning, economics, education and sports with the aim of developing Cambodia’s human resources.
Cambodia has been slowly diversifying its industrial base away from a labor-intensive economy, to a manufacturing one. How is Japan currently playing a role in this and what will its role be in the future?
Although Cambodia’s main industry is still garment manufacturing, recently the companies investing in Cambodia are becoming more diverse. For example, Japanese manufacturers producing car parts or electronics are now operating in the country. AEON Mall also opened last year. I think that more Japanese companies will continue to come to Cambodia looking for lower labour costs and relatively well-built infrastructure.
What industry or areas in Cambodia are of interest for Japanese investors? And how can Cambodia continue to attract Japanese investment?
Cambodia is, and will continue to be, one of the most attractive destinations for Japanese investors. However, in order to diversify industry in Cambodia, and attract capital-intensive industries, it is necessary to establish a stable and low-cost electricity supply. Japan expects that the Industrial Development Policy 2015-2025, which refers to reducing electricity prices by 2018, will be steadily implemented.
Following the successful construction and opening of the “Tsubasa Bridge”, how has this development been received and how does it play into developing the Greater Mekong Sub-region (GMS)?
The “Tsubasa Bridge” was officially inaugurated on 6 April, 2015, with the participation of Samdech Prime Minister Hun Sen. Since then, I have received a lot of positive feedback from the Cambodian people. It has already been reported that the bridge is facilitating the smooth flow of traffic over the Mekong and, in addition, it has become a new sightseeing spot that is attracting many visitors, especially at weekends and during holidays. It is a great pleasure to know that the bridge is loved and highly appreciated by the Cambodian people.
From a wider point of view, the Tsubasa Bridge connects two parts of the Southern Economic Corridor, which runs from Ho Chi Min City in Vietnam to Dawei in Myanmar, via Bangkok. The bridge is therefore contributing to the development of the Mekong region by promoting smooth inter-regional transportation.
How important is it that Cambodia strengthens its regional connectivity?
Economically, and geographically, Cambodia lies between the emerging markets of Thailand and Vietnam. This provides a great opportunity for Cambodia to prosper by taking advantage of its location. Improving connectivity is one of the keys for achieving this. With the establishment of the ASEAN Economic Community, I believe that Cambodia can be the center of growth in the Mekong region in the future.
Last year, Japan pledged to provide an $80 million loan for the rehabilitation and expansion of the Sihanoukville Autonomous Port that is set to be completed by 2017. How have these funds been allocated and how will this help strengthen Cambodia’s only seaport?
The expansion of the port will be completed in 2017. The current port cannot accommodate the increasing demands because it is already old and too small. In addition, it has no space for storing the equipment required for oil exploration off the Sihanoukville coast. The expansion project is expected to solve these problems.
In terms of education, Japan has played a significant role in the development of human resources in the country. Up until now, how many Cambodian students have received scholarships from the government of Japan to study in Japan?
The scholarships program run by the Government of Japan started in Cambodia in 1992. Since then, more than 1,000 Cambodian students have received scholarships to pursue their studies in Japan. Many of these former scholarship students are now playing pivotal roles in many fields for the development of Cambodia, as well as working as ambassadors of friendship between Japan and Cambodia.
It is often stated that as Cambodia’s economy diversifies it could face a skills shortage. How has Japan aided in closing the skills gap?
The development of human resources is one of the most important areas of focus for Japan’s support to Cambodia. For further industrial development, Japan understands that Cambodia needs higher skilled workers. To meet such demands, the keyword is ‘education’. This means not only building engineering schools, but also improving the quality of primary education. Japan will continuously support Cambodia in these areas. In addition, Japan has been providing a range of opportunities for young Cambodian students to study in Japan or to visit Japan in order to expand their knowledge and skills for many years.
In general, what is Japan’s view on the macroeconomic outlook for Cambodia?
During the past two decades, the situation in Cambodia has dramatically improved. The country has consolidated peace and stability and has maintained significantly high economic growth. However, its growth over the past two decades has largely depended on the garment, tourism, rice and construction sectors. Cambodia is now at a crossroads. It needs to invest significant further effort in order to develop in to more sophisticated industries.