Country Report Cambodia March 2011

Economic performance: Non-Asian investors eye Cambodia

Most recent private investment in Cambodia has come from Asian countries, most notably China, Korea, Japan, and neighbouring Vietnam and Thailand. However, Cambodia is now on the radar of other countries, with two recent trade fairs adding Canada and Turkey to the list of countries looking to invest. There is hope that more engagement from non-Asian investors could improve the business climate and erode some of Cambodia's endemic graft.

Although the February 21st Cambodia-Turkey Business Forum resulted in little more than a few hours of optimistic speeches, major Canadian firms, including Research in Motion, the producer of Blackberry mobile phones, and an aircraft manufacturer, Bombardier, took part in Canada's first two-day trade and investment mission to Cambodia on February 14th-15th. Canadian investment in Thailand has tripled in the past 18 months, according to Canada's ambassador to Cambodia and Thailand, Ron Hoffmann, leading to greater interest in Cambodia's potential.

Mr Hoffman has said that Canadian companies have a better sense of public responsibility and environmental awareness than other investors in Cambodia. He has also stressed that Canadian companies value healthy working conditions and a strong legal system. However, no promises of major commitments have been made. Bombardier has stated that it had been looking at opportunities to sell corporate jets in Cambodia, although the firm has conceded that sales in that country are likely to lag far behind Asian economic powerhouses such as China and India. Agricultural trade, such as Canadian cattle exports, also appears to be under consideration. Mining, however, currently seems to be the biggest investment incentive for Canadian companies.

In late December a small Canadian mining company, Shamika Resources, acquired a gold and ruby concession in Cambodia. The firm, which operates internationally under the name Shamika2Gold, is looking to mine about 409 sq km of Battambang province's Samlot district. The concession is adjacent to the Pailin ruby fields, an area where artisanal mining previously provided income for the Khmer Rouge. Shamika has claimed that a geological survey found potential resources of 1.5m oz of gold and 9,000 kg of rubies in its concession area.

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