The official launch of the government’s much-anticipated capital markets initiative, which has been in the works since South Korean President Roh Moo-hyun visited in November, was postponed June 27 because Prime Minister Hun Sen was in Kampot province dealing with the crashed PMT Air plane.
Hun Sen and Finance Minister Keat Chhon had been scheduled to speak at a launch at the InterContinental Hotel. Instead, Hang Chuon Naron, secretary-general of the Finance Ministry, presided over a low-key kick-off of a training course on securities markets at a conference room in his ministry.
Thirteen of those killed in the plane crash were South Koreans.
“I would like to express my condolences to the Korean government and my Korean colleagues for the plane accident,” Hang Chuon Naron said. “We hope next month we will be able to launch Cambodian securities markets with the prime minister,” he added.
On the dais with Hang Chuon Naron were three South Koreans: Hong-Sik Choi, the executive director of global business development at the Korea Exchange, and two academics who came from South Korea for the 10-day training, which is the first of 15 sessions scheduled to take place both in Phnom Penh and Seoul.
KOICA, the Korean government’s aid agency, is footing the $1.8 million bill for the training program and a capital markets feasibility study.
In the audience were approximately 100 young financiers-in-training, employees of Cambodian commercial banks and insurance companies as well as the National Bank of Cambodia and the Finance Ministry.
“[South] Korea has experienced a miracle to transform itself from the poorest country to the 11th largest economy in the world during the last half century,” Hong-Sik Choi told the crowd. “The securities market was at the center of Korea’s economic growth,” he added.
South Korea established its securities markets in 1956, but it took several decades for them to catch on. In the 1970s, the government had to create generous tax incentives for publicly listed companies, and then, finally, give itself the power to order companies to go public, Hong-Sik Choi said in an interview.
Individual investors also got a rough start in Korea’s markets, he said. Many jumped in during the early 1980s without really knowing what they were doing and lost a lot of money. “It was a very severe experience,” he said. Managed investment funds, which allow investors to diversify their risk by buying into a professionally managed pool of securities, have been growing in popularity, he said.
The Korea Exchange also helped Vietnam develop its securities markets through a cooperation agreement signed in 1994.
“We Koreans, like all Cambodians, had an earnest wish that we could not pass on poverty to our beloved children,” Hong-Sik Choi said.
“I cannot say you and your families will be happier than before because of the creation of securities markets, but if we enable the Cambodian economy to move forward toward openness, efficiency and greater productivity, this moment can be a turning point in the history of your country,” he added.