Hun Sen Signs Pact Promoting Japanese Investment

Prime Minister Hun Sen and Japanese Prime Minister Shinzo Abe have signed an agreement in Tokyo to promote and protect Jap­anese firms doing business in Cam­bodia, the Japanese Embassy said in a statement.

While Japan is Cambodia’s larg­est bilateral donor—pledging over $100 million in aid last year—Japan­ese investment has so far been tiny in comparison. Japan invested $22 million between 1994 and 2006, which accounted for only for 0.2 percent of the foreign direct investment in Cambodia, Japanese newspaper Daily Tomiuri reported Thurs­­day, citing figures from the Council for the Development of Cambodia. South Korea invested $2.36 billion and China invested $1.58 billion during the same period, according to the paper.

In the document signed Thurs­day, Hun Sen and Shinzo Abe agreed to support the “liberalization, promotion and protection of investment” by Japanese firms in Cam­bodia, the embassy said, add­ing that Cambodia would enhance its Special Economic Zones to create a more favorable investment climate.

Mao Thora, undersecretary for the Commerce Ministry, said Sun­day that Cambodia is now ready to court the Japanese private sector.

Japanese businessmen have had high standards for investment and have refrained from coming to Cam­bodia until they were fully confident, he said.

“When our infrastructure and judiciary were weak, Japan focused on grants and assistance,” he said. “The Japanese private sector makes clear and serious investments…. They would not come unless the investment policy is clear.”

Officials at the Japanese Embas­sy could not be reached for comment.

Hironobu Kurata, the Japanese owner of the Kurata Pepper Corp­ora­tion in Phnom Penh, said that more Japanese investors could now be interested in coming to Cam­bodia, noting that they have heavily invested in Vietnam.

Japan is one of the biggest foreign investors in Vietnam, where Japanese foreign direct investment has topped $800 million, according to Japan’s Foreign Affairs Ministry Web site. Japanese companies may choose Cambodia over China be­cause it is less expensive and is not a communist country, said Hiron­obu Kurata, who launched his com­pany in 1994.

“[Investors] have already come to research here—they’re already invested in Vietnam and are looking for the next place,” he said. Japan­ese investors might be interested in heavy industry, manufacturing automobile parts and agriculture, he said.

 

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