A greater commitment to boost Malaysia-Cambodia trade

Malaysia is one of Cambodia’s important trading partners and a cornerstone investor in its financial sector. The Malaysian External Trade Development Corporation (MATRADE) works closely with the governments of Malaysia and Cambodia, together with the private sector, to get more businessmen from Malaysia to come to Cambodia to look for trade and investment opportunities. Faizal Izany Mastor, MATRADE trade commissioner for Cambodia, Vietnam and Laos recently spoke to Khmer Times’ Chea Vannak about the future prospects of Malaysia’s trade with Cambodia, within the context of the Asean Economic Community (AEC).

KT: Briefly, what is the level of Malaysian trade and investment in Cambodia?

Mr. Faizal: Cambodia is an important trade and investment partner for Malaysia. Malaysian companies are always encouraged to collaborate strategically with their Cambodian partners, so that both parties can work together within Asean and also globally. In 2015, Malaysia was ranked the seventh largest trading partner for Cambodia.

On the other hand, Malaysian investments in Cambodia have also showed consistency over the past five years. Malaysia’s total investments from 1994 to 2016 was valued at $3.37 billion with 127 registered projects.

KT: Malaysian banks seem to be prominent in Cambodia’s financial sector. Can you let us know the role they play in facilitating Malaysia’s investment and trade in Cambodia?

Mr. Faizal: Currently, all major Malaysian major banks have branches in Cambodia. The banks include Cambodian Public Bank (Campu Bank),  Maybank, CIMB Bank, Hong Leong Bank and RHB Bank – which was the latest to be set up in 2014.

The presence of these banks reflects Cambodia’s liberal financial sector. Also, it is an indication of a vibrant and robust economy. The presence of Malaysian banks would help create a higher business confidence for potential Malaysian investors, keen to invest in Cambodia.

Also these Malaysian banks have branches all over Asean. Hence, inter-Asean trade can be facilitated through them for Malaysian investors in Cambodia.

KT: What sectors are Malaysian companies operating in at present?

Mr. Faizal: Malaysian investments in Cambodia are very diverse. The sectors include hotels, real estate and property development, power generation and transmission, telecommunication, construction and infrastructure, agriculture as well as manufacturing. In addition, there are investments in the services sector such as banking and finance, information and communication technology (ICT) and logistics.

Malaysian enterprises have built their strength and capabilities in many areas, and they are very keen to transfer this technology for the mutual benefit of both Cambodia and Malaysia. Therefore, it is hoped that Malaysia would bring in more investments into Cambodia that are of high value and quality, and technologically advanced.

Among the sectors that Malaysian investors are interested to develop further are agriculture and agro-based industries, manufacturing and industrial processing, infrastructure development, transport and logistics, energy and utilities, ICT, health care and education.

KT: There are numerous business engagements at the government-to-government and private sector levels. How can these engagements boost bilateral trade between Cambodia and Malaysia?

Mr. Faizal: Since 1994, there were several agreements that have been signed at the government level between Malaysia and Cambodia, including the Investment Guarantee Agreement (IGA), Economic, Scientific and Technical Cooperation Agreement and Bilateral Trade Agreement.

In addition, MATRADE and the Cambodia Chamber of Commerce had signed a memorandum of understanding on cooperation on trade promotion in August 2016. There were also numerous engagements by the private sector of both countries, which eventually have resulted in good business cooperation.

These engagements, be it at the government or private sector levels, are intended as a strategic partnership to further promote two-way trade and economic ties.

KT: The Asean Economic Community (AEC) came into effect early this year. The AEC promises free flow of investment among Asean member countries. However, Malaysia’s investment flow into Cambodia is still small. Are there any plans by MATRADE to help encourage investment from Malaysia to Cambodia, in the context of the AEC?

Mr. Faizal: The AEC promotes greater investment flows within Asean-member countries. Each AEC country has its own strength and advantage. Therefore, the natural flow of investment into these countries will create a regional supply chain that leverages on each other’s strength.

Apart from facilitating Malaysian investment into Cambodia, MATRADE plays an important role to link businesses from both countries, especially in introducing high-quality products and services from Malaysia.

MATRADE organizes various trade promotion programs in Cambodia on an on-going basis, and it includes the organization of export acceleration missions in the country and participation in international trade exhibitions. It also organizes international sourcing programs in Malaysia where selected Cambodian buyers will enjoy many incentives such as complimentary hotel stay, ground transfer and business matching arrangements with reliable Malaysian enterprises.

KT: Both Malaysia and Cambodia have talked about rice. The kingdom is keen for Malaysia to buy more rice from Cambodia. But the amount of milled rice exported from Cambodia to Malaysia still remains small. What can MATRADE do to help?

Mr. Faizal: Discussions between both governments to import Cambodian rice into Malaysia are progressing well. In 2015, Malaysia’s total import of rice [from Cambodia] amounted to $40.8 million, an increase of 5.9 percent from 2014. Between January to October 2016, Malaysia imported rice worth $16.8 million.

KT: What is your 2017 outlook for bilateral trade and investment between Cambodia and Malaysia?

Mr. Faizal: The outlook for bilateral trade and investment between Cambodia and Malaysia is very promising. The exchange of high level visits by leaders of both countries, as well as leaders from the corporate sector will further strengthen business linkages.

With tariff reduction in the AEC to be fully implemented by 2018, it is expected that more trade and investments activities will happen in Cambodia, especially those involving Malaysian investors.

In August 2016, during the bilateral meeting between Malaysia’s International Trade and Industry Minister Dato’ Sri Mustapa Mohamed with his Cambodian counterpart,  Minister of Commerce Pan Sorasak, both parties expressed strong commitment to boost bilateral trade to a higher level.

Among the areas that will be focused on include the development and promotion of micro, small and medium enterprises of both countries, cooperation in the halal food industry, logistics, infrastructure and investment in downstream processing.

Source: Khmertimes