Asean economic ministers meeting Monday in Phnom Penh said they were optimistic about trade growth and increasing foreign direct investment in the region for the next year, despite the effects of severe acute respiratory syndrome and terrorism on the economy.
Cambodia’s secretary of state for the Ministry of Finance, Kong Vibol, said at a news conference that foreign direct investment flows to Asean countries were expected to rise in 2003 and 2004, recovering from a slump in 2002.
Approved foreign direct investment to Asean countries within the manufacturing sector jumped 54 percent to $5.8 billion in the first six months of 2003, Kong Vibol said, as SARS had a limited impact on investment in the region. That was up from $3.8 billion in the same period last year, he said.
Singapore’s minister for trade and industry, George Yeo, added that, although terrorism was “a challenge” to attracting investors, markets rebounded quickly after attacks such as the October 2002 nightclub bombings in Bali. “For one day, the markets were affected, but the next day it rebounded,” Yeo said. “Life went on.”
Trade in the Asean region also rose in the first quarter of 2003, according to a joint statement from the Asean Free Trade Area Council. Following a closed-door meeting, the council said trade jumped 15.3 percent, to $186.25 billion from $161.56 billion in last year’s first quarter.
But, the statement said, council ministers were concerned over the slow removal of unnecessary non-tariff barriers by member nations.
Some 400 delegates are gathered in Phnom Penh this week for the 35th Asean Economic Ministers meeting, which officially begins today. One of the key topics they will discuss is the development of an Asean-China Free Trade Area, which they plan to complete within 10 years. The plan, approved in 2001, would allow lower tariffs for some exports from least-developed countries, such as Cambodia, Laos, Burma and Vietnam.
Kong Vibol said such an arrangement would benefit Asean countries since China was providing increasingly more foreign direct investment to the region.
Cambodia, meanwhile, will hold bilateral discussions with China and Australia ahead of its official induction into the World Trade Organization in November or December, said Sok Siphana, secretary of state for the Ministry of Commerce.
Sok Siphana said Cambodian delegates will seek assistance from Australia on improving product sanitation standards, and discuss Cambodia’s supply of duty-free exports to China.
A bilateral agreement with China allows Cambodia to export 279 agricultural products to China free of tariffs, he said.
Meanwhile, on Monday, Cambodian Commerce Minister Cham Prasidh met privately with Truong Dinh Tuyen, Vietnam’s Minister of Trade.
Sok Siphana said Tuyen praised Cambodia for a “successful” July 27 general election. The Vietnamese minister also congratulated the CPP for its victory.
Sok Siphana said the two ministers discussed bilateral trade, calling for cheaper transportation of goods and trade exhibitions between the two countries.