Archive for September, 2008
New reserve requirements put banks under pressure
The Phnom Penh Post – September 25, 2008
Written by May Titthara
The National Bank hopes that raising the minimum amount of money institutions must have will strengthen sector
A teller counts money at an ANZ bank branch in Phnom Penh.
The National Bank of Cambodia this week announced two new measures to increase capital reserves amid a US financial meltdown.
In an official document entitled “New Requirements and Criteria for Licensing Approval of Banks”, the NBC upped capital requirements for commercial and specialised banks to 150 billion riels (US$37.5 million).
The prakas would apply to locally incorporated commercial banks “with at least one influential shareholder”.
In addition, rural specialised banks with single or multiple shareholders will require reserves of at least 10 billion riels and 30 billion riels, respectively.
“We have announced these measures in order to strengthen the financial status of banks in Cambodia,” Tal Nay Im, director general of NBC, told the Post Wednesday.
Rapid economic growth in the Kingdom has led to a banking boom, with local and foreign banks tapping both the commercial and retail market.
‘Fewer startups’
One local financial expert said that the new rule is largely intended to cut the number of new startups in the overheating sector.
“WE ANNOUNCED THESE MEASURES …TO STRENGTHEN THE FINANCIAL STATUS OF BANKS IN CAMBODIA.”
“The government is worried about the number of new bank applications. They don’t want to say ‘no’ to new investment,” said the official who asked not to be named.
“This government is saying, ‘We welcome new banks, but you do have to be stronger financially’,” the official said.
He added that the new rule could lead to consolidation in the industry with smaller banks merging or partnering with larger banks.
The new regulations will take effect immediately, according to the bank announcement, but institutions licensed prior to the changes will have a grace period to comply.
Banks licensed before the adoption of the new regulations “shall increase their capital equal to the minimum capital … no later than the end of 2010,” the document stated.
In Channy, CEO and president of Acleda Bank, said the new capital requirements would enhance liquidity and increase confidence in the banking sector.
He said Acleda already exceeds the minimum capital requirements but that weaker banks could be adversely affected.
Charles Vann, deputy general director of Canadia Bank, agreed that the new measures would protect and strengthen Cambodia’s banking sector.
He said the rules were less a reaction to troubles in foreign markets than an effort to improve the economic climate at home.
“My bank will not be affected by the new requirements because we have plenty of capital to meet the new NBC regulations,” he said.
Impact on small firms
Although large banks are expected to be unaffected by the rule, experts said small companies could be forced to close.
Pech Vannthoeun, general manager of the Peng Heng SME Specialised Bank, said his institution has no connections to prominent shareholders or outside investors.
“If we had to comply immediately with the new regulations, we would face problems,” he said.
“But we have until 2010 to increase our reserves, and I intend to look for partnerships with foreign investors to help the bank.”
He said in the short term the bank would try to increase capital on its own to avoid relying on outside shareholders.
“I still think the new regulations are an important step because higher capital reserves will allow banks to extend more credit and low-interest loans to local borrowers,” he said.
A biannual report released by the central bank in August showed inflation spiked to 25 percent in the first half of 2008, driven by unprecedented lending and higher investment, as well as rising global commodity prices.
The bank had responded to inflationary concerns two months prior by bumping capital reserve requirements from eight to 16 percent.
“The NBC is well aware of the challenges that private sector growth and foreign investment could pose for the stability of the banking sector,” NBC Director General Chea Chanto told the Post in June.
ADDITIONAL REPORTING BY GEORGE MCLEOD
Hun Sen elected as Cambodian PM for five more years
AFP – September 25, 2008
Cambodian Prime Minister Hun Sen who has been re-elected at a session boycotted by parties disputing the election result
PHNOM PENH (AFP) — Cambodia’s parliament re-elected Hun Sen as prime minister Thursday, extending his 23-year grip on power, at a session boycotted by parties disputing the results of the July general election.
Only 94 of the 123 elected members of parliament showed up, and unanimously raised their hands to approve the nomination of the parliament’s president and the new government.
Hun Sen promised before the session that his government would use its new five-year term to “accelerate development and push for deep and wide reforms” of the southeast Asian nation.
His Cambodian People’s Party (CPP) took 90 seats in the July 27 election, while the main opposition Sam Rainsy Party (SRP) received 26 seats.
The royalist parties — Funcinpec and the Norodom Ranariddh Party — picked up two seats each, and the Human Rights Party (HRP) three seats.
SRP and HRP lawmakers did not attended Thursday’s session and have claimed widespread irregularities in the July poll.
The opposition leaders could not be immediately reached for comment.
The CPP’s overwhelming majority in parliament means this year is the first time since 1993 that the country has not been left in political deadlock after an election.
The previous general election, in July 2003, led to a year of stalemate as parties wrangled over forming a coalition government.
Hun Sen has a reputation for trampling on human rights to secure power, but a booming economy has bolstered his standing in a country still struggling to lift itself from the ranks of the world’s poorest.
New Thai PM plans visit to Cambodia next month
AFP – September 26, 2008
Thailand’s new prime minister plans to visit neighbouring Cambodia next month, premier Hun Sen said Friday, amid a simmering border dispute between the two countries.
Hun Sen said the visit was planned for October 13, but did not say whether he and premier Somchai Wongsawat would discuss the spat over land near ancient temples along their border that led to a weeks-long military standoff.
“If there is no change, there might be a visit by the new Thai prime minister to Cambodia next month,” Hun Sen announced during the first meeting of his new government’s cabinet.
A Thai foreign ministry spokesman confirmed discussions were being held about a future visit but said no date had yet been fixed.
Israel set to become major investor in Cambodia: embassy
The Phnom Penh Post – September 25, 2008
Written by George McLeod
Agriculture and high technology earmarked by Israeli businesses as embassy says the country hopes to become a top investor
CAMBODIA may see a flood of Israeli trade and investment over the next year, according to an embassy spokesman.
“There is huge interest in Cambodia [in Israel]. Businesses are looking to [the Israeli government] to open new markets for them in Cambodia,” said Tzahi Selzer, the economic and trade attache at the Israeli embassy in Bangkok.
The embassy said the first stage would see investment in agriculture, real estate, high technology and irrigation.
Israel is well-known for its agricultural technology, which includes high-tech drip irrigation and advanced greenhouses.
On the longer term, Cambodia could see Israeli investment in medical equipment and hydro-technology, such as desalinization plants.
“In the next year, you will hear a lot about Israel in Cambodia … there aren’t many places that are as promising as the Cambodian market. Israel has been in Vietnam and India, and is looking for new markets,” said Selzer. The Bangkok embassy is in charge of Cambodia, but the attache said the Israeli government is considering opening a representative office in Phnom Penh.
The Israeli efforts come on the back of increasing interest in Cambodia on the part of Middle Eastern countries. A delegation from Kuwait visited Cambodia in August, and investment from Saudi Arabia and Iran has grown substantially. Dubai Group from the United Arab Emirates is expected to invest heavily in Cambodia through the Leopard Fund.
Selzer said his government’s efforts are not intended to counter Arab and Iranian investment in the Kingdom.
“We hope to become one of the top-10 investors in Cambodia,” he said. Israeli-Cambodian trade and investment is small, and only about 30 Israelis live in Cambodia, said the embassy.
The Israeli government’s plans for Cambodia also include negotiations to ink investment agreements on double taxation and protection of investment.
Cambodian PM re-elected
AFP – September 25, 2008
Cambodia’s parliament re-elected Hun Sen as prime minister, extending his 23-year grip on power, at a session boycotted by parties disputing the results of the July general election.
Only 94 of the 123 elected members of parliament showed up, and unanimously raised their hands to approve the nomination of the parliament’s president and the new government.
Hun Sen promised before the session his government would use its new five-year term to “accelerate development and push for deep and wide reforms” of the southeast Asian nation.
His Cambodian People’s Party (CPP) took 90 seats in the July 27 election, while the main opposition Sam Rainsy Party (SRP) received 26 seats.
The royalist parties, Funcinpec and the Norodom Ranariddh Party, picked up two seats each, and the Human Rights Party (HRP) three seats.
SRP and HRP lawmakers did not attended today’s session and have claimed widespread irregularities in the July poll.
The opposition leaders could not be immediately reached for comment.
The CPP’s overwhelming majority in parliament means this year is the first time since 1993, the country has not been left in political deadlock after an election.
The previous general election, in July 2003, led to a year of stalemate as parties wrangled over forming a coalition government.
Hun Sen has a reputation for trampling on human rights to secure power, but a booming economy has bolstered his standing in a country still struggling to lift itself from the ranks of the world’s poorest.
VN goods a big hit in Cambodia
VNA – September 23, 2008
HCM CITY — The Cambodian public and media have shown high appreciation of quality Vietnamese goods presented at a five-day fair in the capital city of Phnom Penh since last Thursday. More than 150 Vietnamese enterprises showcased a wide range of products including farm and pharmaceutical products, foodstuff, construction materials, chemicals, electrical equipment and stationery items at the Viet Nam High-quality and Export Fair 2008.
The Cambodia Daily’s Sunday edition noted that the seventh Viet Nam trade fair was held on a large scale with more exhibits than previous fairs, attracting tens of thousands of visitors who visited and bought products everyday.The annual trade fair aims to further accelerate the economic and friendly relationship between the two countries.
Hor Nam Hong, Cambodian Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation, highly appreciated the fair and said Cambodia would do its best to attract Vietnamese investment in the country.
During the first eight months of this year, bilateral trade was worth US$1.2 billion, compared with $1.1 billion in 2007.
It is expected to reach $1.3 billion by the end of the year and $2 billion by 2010, he said. — VNS
Cambodian PM plans Doha visit
The Gulf Times – September 23, 2008
By Arvind Nair
CAMBODIAN Prime Minister Hun Sen is expected to pay a state visit to Qatar next January as part of efforts to strengthen bilateral relations, reports said.
Hun Sen is also scheduled to stop by Kuwait and the United Arab Emirates.
The visit is part of a new government strategy that aims to make Cambodia a target destination for more Middle Eastern travellers.
The move comes amid efforts by Hun Sen to strengthen ties between Cambodia and the Gulf nations.
Cambodia last month signed a direct-flight agreement with Qatar. Cambodia’s Minister of Tourism Thong Khon was quoted as saying that a similar agreement with Kuwait was expected soon.
In April, Qatari Prime Minister HE Sheikh Hamad bin Jassim bin Jabor al-Thani announced a $200mn investment in Cambodia’s agriculture sector, while Kuwait last month pledged $546mn in soft loans to upgrade irrigation systems and roads throughout the country.
Cambodia has more than 300,000 ethnic Muslim Cham residents. Cham communities are currently marketed to Muslim tourists, Cambodia Association of Travel Agents has said.
“Cambodia has a Muslim Centre and other sites of interest, and several restaurants serve halal food,” the sources said.
Backgrounder: The Mekong River Hydropower Program
VIENTIANE, Sept. 25 (Xinhua) — The Mekong River Commission (MRC) on Thursday launched consultation meeting for the regional Mekong Hydropower Program platform here on Thursday, aiming to shape a way for the river’s future hydropower development which is shared by Cambodia, Laos, Thailand, Vietnam, Myanmar and China.
Hydropower developments in the Lower Mekong Basin are developing rapidly, with the advent of numerous private-sector/government partnerships and proposals, both on the tributaries and for the Mekong mainstream. High oil and gas prices and concerns over climate change have intensified the focus on hydropower as a renewable technology. Upstream developments on the Lancang-Mekong are also influencing investment decisions downstream.
The MRC approved its Hydropower Strategy in 2001 and drafted a Concept Note for its Hydropower Program in 2005. These documents were a comprehensive attempt to interpret emerging international good practice and lay out what it meant for the Mekong region, and identify strategic work areas and possible components of the program.
Although due to funding constraints, the Hydropower Program did not start until earlier this year, a number of the strategic directions and activities identified under the Strategy were already incorporated into other related MRC programs.
Under the agreements, the MRC member states cooperate to “optimize the multiple-use and mutual benefits” of water resources and to “minimize the harmful effects that might result from natural occurrences and man-made activities”.
Based on this mandate, the Hydropower Program with other MRC programs to fulfill the following roles in relation to the sustainable development of hydropower: undertaking applied research to improve understanding of the natural processes in the river system and the consequences of development proposals; providing a basin-wide integrated water resources management strategy within which individual project proposals can be assessed; analyzing the cumulative impacts of various future development scenarios; administering formal notification and consultation procedures; undertaking specific studies and providing interpretation of project proposals where requested; building capacity for sustainability assessment; monitoring river hydrology, environmental health and productivity.
| Editor: Wang Hongjiang |
Sam Rainsy Party Joins Assembly Swear-In
Newly elected members of parliament swore in on Wednesday, in a ceremony presided over by King Norodom Sihamoni, third from left. (REUTERS/Chor Sokunthea)
By Chun Sakada, VOA Khmer
Original report from Phnom Penh
24 September 2008
The attendance of Sam Rainsy Party lawmakers followed weeks of threats to boycott the ceremony, potentially threatening to deadlock to the government or cost the opposition some positions in the Assembly.
Opposition leader Sam Rainsy arrived at the National Assembly building in Phnom Penh’s Chamkar Mon district early Wednesday morning for the opening of the Assembly, with King Norodom Sihamoni presiding.
Reporters were barred from the Assembly session, and Sam Rainsy declined to speak to reporters afterward. His party won 26 of 123 National Assembly seats in July’s election, second behind the 90 seats won by the Cambodian People’s Party.
Sam Rainsy had said before Wednesday’s session the election had been fraudulent and had called for a revote while threatening to withhold his candidates from Wednesday’s ceremony.
Opposition lawmaker Son Chhay said lawmakers joined the government on Wednesday after Prime Minister Hun Sen promised to have the opposition role officially recognized by the government and to provide a budget for opposition operations.
Hun Sen addressed reporters Wednesday morning.
“All political parties joined the meeting around the king except the Human Rights Party of Kem Sokha,” Hun Sen said. “I promised to get the request by Sam Rainsy discussed in the National Assembly ad hoc [committee] to be put in the internal rules.”
Human Rights Party lawmakers Kem Sokha, Yem Ponhearith and Ou Chanrith stayed at their headquarters in Phnom Penh Wednesday morning, watching the Assembly ceremony on TV.
“We are following a request from the voters to boycott,” HRP President Kem Sokha said by phone.
“The fourth legislative National Assembly meeting is a new opportunity in history for the legislative institution,” King Norodom Sihamoni told incoming lawmakers, and it was imperative the Assembly hold Cambodia’s interests above all others.
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