Finding a path for future growth
Finding a path for future growth
EuroCham, Cambodia’s largest foreign chamber of commerce, is under new stewardship. The Post’s Kali Kotoski sat down recently with incoming chairman Arnaud Darc to discuss his vision for business association and get his take on the Kingdom’s business climate.
As the newly elected chairman of EuroCham, what initiatives do you hope to achieve?
EuroCham is heavily funded by the European Union and we have funds of $3 million over a period of five years. So we have three years left of this funding and we have a clear objective to increase the development of European companies in Cambodia, and also to promote Cambodia to Europe and the region. Also, my mission is to make sure that EuroCham is fully self sustainable and can continue its objective. Basically, what I want to see is that Eurocham can stand on its own two feet and that it can represent its members with one voice to the government.
What is the overall attitude for the investment climate in Cambodia right now?
When I talk to traditional donor countries, I believe they think that Cambodia still has a high capacity to get funding for infrastructure development. So the government needs to create a precise development plan and get funds into the country. The government needs to debate politically the future of Cambodia, not like the atmosphere of character politics we have right now. We need to see real public discussions about the future of development to increase investor confidence.
Earlier this year, EuroCham issued a White Book of policy recommendations to the government. How well have those recommendations been received?
This was one of our biggest publications and it was very well received by the government, and we’ve had many follow up meetings, primarily with the General Department of Taxation and the Ministry of Economy and Finance. They are still very interested in what we have to say. We are also going to meet the customs department soon. The working groups, especially for tourism, are continuing discussions. We will report our findings from the meetings and feedback to our members, and it will be very transparent. As you can imagine, they didn’t accept all of our recommendations, but we didn’t expect them to. Nevertheless, we are very happy with the ongoing discussions.
With Vietnam heavily industrialising and Myanmar opening up as the next frontier market, some analysts have commented that Cambodia is no longer on the radar. What are your thoughts?
I don’t agree with that. Before, when you would go around the region and hold conferences about Cambodia, you would only get four or five people. Now, those conferences are packed with investors. Cambodia is popular. People are interested. Cambodia is a hot topic in the region and we need to bank on that. This is something the whole private sector has in mind.
The government has mentioned its concerns about losing its preferential treatment under Everything But Arms (EBA) scheme in two years. What can Cambodia do to shore up manufacturing and supply chains to offset this change?
We need a different mindset in how we develop the economy and need radical change in how the government invests in infrastructure. Cambodia needs to borrow more money and look beyond the next two years. If it adopts a better legal framework, investors will come. The government can’t rely on the private sector to do everything.
Economists have said that for the time being, Cambodia needs to shore up its traditional manufacturing bases like garments. In the long term, how can Cambodia diversify its manufacturing base and scale up the value-added chain?
With the TPP coming and the EBA ending, this is a critical time for the country and especially for the garment sector as it is one of the strongest pillars for the economy. Cambodia needs to diversify its manufacturing base. The government needs to propose to those working in the garment industry a way to step up. Diversification is key. That is what the political debate about Cambodia should be about, and that is one of the important topics that the business community wants to see addressed.
