GENERAL INFORMATION
ON
THE KINGDOM OF CAMBODIA

I. BASIC DATA ON CAMBODIA

The Kingdom of Cambodia, with its rich variety of natural resources (fertile soil favorable for agriculture, good tropical forests, and minerals), and abundant labor force, offers foreign investors many possibilities for producing or processing a wide range of local products, including, but not limited to wood furniture, paper, canned vegetables and fruits, precious stones and other minerals, clothes and footwear. The Mekong river and its many tributaries have vast potentials as sources of hydro-electric power which, once harnessed, will supply abundant energy for industrial and commercial development and household use. Recent successful petroleum and gas disco veries off its coasts enhance Cambodia's attractiveness both to foreign and local investors. The possibility of fast economic growth and sustained, rational, and environmentally sound development is very high.

II. Data reflecting the economy's stability and plan for year 2000

Table 1: Selected Macro-Economic Indicators

Table 2: National Budget at a glance (in billion riels)

 Table 3: Contribution to GDP by Sectors (in Billion Riels at Current Purchase Prices)

Table 4: Sectoral Allocation Targets, 1996-2000

Table 5: Major Targets for Social Development, 2000

(in thousands of US Dollars)

V. MAJOR ECONOMIC SECTORS

A - Agriculture, fishing, and forestry

• Rice
  Rice production accounts for 87.5% of the available cultivated area contributing to 15% of GSP. The estimated average yield of paddy at 1.7 tons/hectare is low. The total land worked in 1994 (1.8 million hectare) was less than that in the 1960's (2.5 million hectare). Cambodia has become self-sufficient in rice in 1996 and have a surplus to export around 120,000 tons. The maximum annual exports in the 1960's were 111,800 tons.
• Rubber
  Cambodia's rubber plantations are a valuable economic asset. They are second only to timber as a source of export earnings.
  Cambodia's current production is around 40,000 tons per year.
  • The Ministry of Agriculture plans to expand the area under rubber cultivation from 50,000 hectares (123,551 acres) to as much as 800,000 hectares (1,976,800 acres) within a decade.
  • FAO has estimated that Cambodia can produce at least 600,000 tons of rubber annually.
  • The new expansion is planned for the eastern provinces.
  • Natural rubber is exported to the United States. In 1995, natural rubber imports from Cambodia were $3,117,000.
  • The maximum annual exports in the 1960's were 51,00 tons.
• Fishing
  Fisheries in Cambodia play an important role in supplying the main protein source to the people and in contributing to the national economy.
  Main fisheries resources are as follows:
  • Inland fisheries from the Tonle Sap (the Great Lake) and the Mekong river and its tributaries
  • Freshwater aquaculture in the Tonle Sap and ponds
  • Marine fisheries from the coastal waters

  During the 1960's, the average annual fish production was about 170,000 tons, of which 120,000 tons were from inland waters, 45,000 tons from coastal waters and 5,800 tons from freshwater aquaculture.
  Freshwater aquaculture is being carried out in ponds, pens, and cages where water is available throughout the year.
  In 1990, Kamfimex (Kampuchea Fishery Import Export Company) exported frozen products and salted dried fish in the amount of $1,232,000.
  Due to resource limitations and the need to avoid over-exploitation, anticipated yields by 2000 will rise only to 153,000 MT (68,000 MT inland, 38,000 MT marine, 13,000 MT aquaculture) from the current level which is around 142,000 MT.

• Forestry
  Forestry, with large stocks of teak and rosewood, is one of Cambodia's most valuable assets. Production was 308,900 m3 in 1991. The Royal Government of Cambodia has taken measures to stop deforestation. Timber exports have been banned since 12/31/96. Domestic processing of wood is encouraged rather than the exportation of timber.

B - Petroleum

Three companies are involved in offshore gas/oil exploration in Cambodia:
        * Enterprise Oil: was awarded Block I and II in 1991. The most successful testproduced a maximum flow rate of 4.7              million cubic feet per day of gas and 180 barrels per day of condensate. Enterprise Oil operates the venture on behalf of              three parties: Enterprise Oil (operator) 50%, Total Cambodge Exploration Ltd. 30%, British Gas E & P Ltd. 20%.

        * Premier Oil: was awarded Block IV in 1991. Hydrocarbon indications were encountered during drilling and
           subsequent testing produced a maximum flow rate of 1,180 barrels per day of oil and 1.3 million cubic feet of gas
           per day. Premier operates the venture on behalf of a consortium: Premier Petroleum Camboya Ltd. (operator)
           33.3%, Ampolex (A.O.E.) Ltd. 33.3%, Idemitsu Cambodia Oil Exploration Co. Ltd. 33.3%.

        * Campex: was awarded Block III in 1991. The most successful test produced a maximum flow rate of 244 barrels
           (42 API) per day of oil and 73,200 cubic feet per day of gas.

The Ministry of Industry, Mines, and Energy is inviting foreign investors to bid for offshore oil exploration blocks V, VI,
and VII. Block X which is situated onshore will be put on bidding soon.

Regarding the foreign overlapping area in dispute, the Cambodian and Thai Governments are in the process of negotiating
for sharing potential offshore oil and gas reserves.

Oil distribution: Cambodia's oil demand will rise by 15% over the next several years to top 1.56 million tons by the year
2000. Oil distribution firms in Cambodia are: Shell, Total, Sokimex (Cambodia), PTT, Petronas (Malaysia), and Caltex.

C - Energy

• Electricity is currently produced primarily by oil generators. Through aid and loans from Japan, ADB, World Bank, and private investment, the Ministry of Industry, Mines, and Energy has a five-year plan for electricity production.

unit = MW

• Hydroelectricity
  A long-term plan for hydroelectricity in Cambodia has been issued by the Ministry of Industry, Mines, and Energy

unit = MW

Electricity distribution - long-term plan

unit = MW

 
For detailed information, please contact the Ministry of Industry, Mines,
and Energy:
     Mr. Kuon Kreal                       Mr. Men Sarun
     General Director of Energy      Deputy Director/Electricité du Cambodge
     Fax: (855) (23) 427 840          Fax: (855) (23) 426 018
     Tel: (855) (23) 722 347           Tel: (855) (23) 723 871
           (855) (15) 914 368                   (855) (15) 913 065 

D - Minerals

The most recent review of minerals in Cambodia, ESCAP 1993, confirms investigations carried out since the 1950's which indicated the existence of significant mineral deposits in Cambodia. Deposits include sapphires, rubies, alluvial cassiterite, silica, bauxite, manganese, slate, kaolin coal, peat, lignite, pagodite, and phospotite. This study r epresents the first updated inventory of geology and mineral resources in two decades and the first modern assessment of Cambodia's mineral production potential.
The current exploration is carried out by:

• Sun Trading Co. Ltd.: Sun Trading was awarded the areas of Memot, Kompong Cham province and Memong, Mondulkiri province on January 12, 1993, for gold exploration. The area is currently being explored.
• Delcom: Delcom was awarded the areas of Krova, Kompong Thom province and Phnom Dek, Preah Vihea province on March 24, 1994, for gold exploration. The two areas are currently being explored.
• The Brewer Natural Resources Development Company (US) received exploration rights for a tract of land in northeast Cambodia.

E - Construction

The upgrading and construction of basic infrastructure such as roads, power stations, seaports, airports, telecommunication facilities are central to Cambodia development prospects.

F - Manufacturing

Light industry is generally better developed than heavy industry. The more developed industries include household goods, textiles, softdrinks, alcohol, nails, jute sacks, tires, tools, pharmaceutical products, and cigarettes. Cambodia has received Generalized System of Preferences (GSP) from 26 countries. During 1994-95, the number of garment f actories increased to 30, and their exports rose (1994 = $3 million; 1995 = $26 million; up to April 1996 = $21.18 million). With the new free trade zone in Sihanoukville, the manufacturing sector will increase.

VI. FINANCE SYSTEM

Structure

The current banking system in Cambodia consists of:

• The National Bank of Cambodia, the Central Bank and its 20 provinces branches
• 28 commercial banks
• 2 state-owned commercial banks
• 17 privately-owned commercial banks
• 3 joint ventures banks
• 6 foreign bank branches
• 1 representative office
• Banks by majority shareholders nationalities: 2 Khmer, 11 Thai, 4 Malaysian, 3 Hong Kong, 3 Singaporean, 1 Australian, 1 English, 1 French, 1 Taiwanese

Foreign exchange

The National Bank of Cambodia is authorized to license commercial banks and other agents engaging in foreign exchange transactions and to regulate current and capital transactions.
The exchange system comprises two parallel rates - the official and the market rates. Adjustments to the official exchange rate are made daily by the NBC, so as to limit the spread between the official and market rates to no more than 2% on a daily basis and less than 1% since June 1994. The official exchange rate applies mainly to external tran sactions conducted by the Government and state-owned enterprises.

Cambodian currency

The new bank-notes and coins have the following denominations: coins are in 50, 100, 200, and 500 Riel, bank-notes are in 1,000, 2,000, 5,000, 10,000, 20,000, 50,000, and 100,000 Riel. Since the introduction of new notes, the Riel has been strong against the US Dollar. This is attributed to increasing confidence of the public in the domestic cur rency and the Royal Government's strategy for the development and improvement of the economy.

Stock market and capital market

The National Bank of Cambodia is studying the possibility to set up a stock market and a capital market for stimulating the flows of capital from foreign countries for the economic development of the kingdom.

For further information, please contact:
Ms. Tal Nay Im
Director Bank Supervision & Examination
National Bank of Cambodia
Tel: (855) (23) 426 117
Fax: (855) (23) 426 117

VII. Cambodia and US Economic Relations

A - Legal Framework

· The Investment Incentives Agreement, known as Overseas Private Investment Corporation (OPIC) between Cambodia and the United States was signed and came into force on January 17, 1997.

OPIC assists American investors through four principal activities designed to promote overseas investment and reduce the associated risks:

- financing of businesses through loans and loan guaranties;
- supporting private investment funds which provide equity for US companies investing in project overseas;
- insuring investments against a broad range of political risks; and
- engaging in outreach activities designed to inform the American business community of investment opportunities overseas.

· Agreement between the United States and Cambodia on Trade Relation and Intellectual Property Right Protection was signed on October 4, 1996.

· The United States has granted unconditional Most Favored Nation trade status to Cambodia on September 25, 1996. This status came into effect on October 25, 1996. MFN status allows Cambodia to export to the US with U.S. import duty reduction down to the average of 4%.

· The United States has granted Generalized System of Preferences trade status (GSP) to Cambodia. The GSP implementation began on August 1, 1997. GSP status allows Cambodia to export its products into the United States with duty free over 6,000 items.

· Visa Arrangement between the government of Cambodia and the United States has been signed and entered into force on August 8, 1997. The real implementation of the arrangement will be carried out within this year.

· Note that Cambodia is a member of the International Finance Corporation (IFC). IFC can provide loan to private companies for their investment in Cambodia.

B - Cambodia - USA Trade Statistics: The Kingdom of Cambodia and United State of America

> Unit in US $

Series 1: Cambodian Export
Series 2: US Export

VIII. Economic Information Contacts

Persons seeking additional information about economics, trade, tourism and the opportunity for US business in Cambodia should contact:

1. Mr. Mao Chan Samnom (Counselor in charge of Economics, Trade, Tourism)
   Tel: (202) 726-7824
   Fax: (202) 726-8381  

IX.  Contact with the garment factories in Cambodia

NAMES & ADDRESSES OF GARMENTS MANUFACTURERS IN CAMBODIA

YEAR EXPORT VALUES OF GARMENT INDUSTRY