Monday, 26 December 2011

Review of Japan's Public Finance 2011

People walking passby electronic stock trading board in Tokyo.

Display of 10,000 yen note in Money Museum in Tokyo

Even though some European countries are struggling with public debts and other economic woes, economic recovery is back on track for developed countries and emerging economies after the global economic and financial crisis started in late 2008. So does Japan. However, Japan’s government is currently facing many challenges such as budget deficit, over-expenditure, declining revenue, recent appreciation of the Yen, and deflation, which make it very difficult for the economic recovery from the world financial crisis. The change of government from Liberal Democratic Party (LDP) to Democratic Party of Japan (DPJ) also complicates these crises since there is a lack of continuity, and the introduction of new strategies and reforms by the new government which, to some extent, has negative impact on overall economic activities. DPJ administration has made some reorganization of government structure and laid out some reforms on national budget and public expenditure in order to keep its promise made during the election campaign. All of these challenges by the national government have put Ministry of Finance in the forefront as there are a lot of works to do with budget making and resubmission of budget in aligning with the target set by the Cabinet. In general, Ministry of Finance play major role in financial matters and budget planning, and cooperation with major international banks in the world, such as World Bank and Asian Development Bank (ADB). In order to touch upon the financial issue of Japan’s government and also responsibilities of Ministry of Finance, I am going to provide my briefing and analysis on financial reforms as follows:

Wednesday, 14 December 2011

The Importance of Human Resource Development: A look at Education in Japan

Education is compulsory for all citizens as stated in most constitutions of all countries which recognize the importance of human resource development for socio-economic development and nation building. A nation can lack of natural resource due to its geographical location and condition, but it cannot fall short of human resources. In another word, a knowledge-based society is better than resource-rich society since the natural resources (for example, oil and gas) will be depleted due to extraction and consumption. So, it is better to invest and depend on human resource for survival and development in the future. In a national budget for a government, a specific percentage of total annual budgets are allocated for education sector and the government has to make sure that such amount of money is used efficiently and effectively according to national education plan and strategy. 

Thursday, 8 December 2011

Understanding the Principles of International Relations

Photo courtesy of Gala Diner in the evening of 20th November 2012, Diamond Island, Phnom Penh, Cambodia

I. Realism and Liberalism

Realism and liberalism have been the two main dominant ideologies of international politics. Now the two theories have received more strength in the contemporary world, especially in the 21st century. Realism and liberalism have their own features as follows:

In realism, states are the central factor in international politics in which anarchic system exists and one can control or is above states. Military capability and use of force is pursued in conducting foreign policies and states must be self-help to solve their own problem and to achieve and maximize its national interest. So, power and national interest are the central values to be considered first by statesmen in engaging with other states which can or cannot pose threat to each other in pursuing their own ends. In realist’s view, these ends can be achieved through cooperation, but there is potential for conflict. 

Thursday, 17 November 2011

Structural Analysis of World War I, World War II, and the End of Cold War

Reagan and Gorbachev signed Intermediate-Range Nuclear Forces (INF) Treaty at the White House in 1987

Neville Chamberlain (British Prime Minister) show Munich Treaty, signed by himself, Hitler, and France, to the public in 1938. He declared "peace of our time" to his people after returning from Munich, Germany. However, This treaty failed to stop Hitler's planned aggression which started in 1939.

I.                   World War I

There are structural and process factor the help explain the change of the alliance system  in Europe between 1815 and 1914.  In 1907, Britain, France, and Russia established Triple Entente while Germany, Italy, and Austria-Hungary formed military alliance since 1882. First, from the realists’ view, the big change was caused by the unification of Germany in 1870, resulting in a major change in the distribution of power in central Europe. Located right in the middle of Europe, a united Germany had tremendous geopolitical consequence. From a structural perspective, a united Germany was either too strong or too weak in challenging both with Russia and France. In the process, due to Bismarck’s brilliant diplomatic talent (1871-1890), the newly unified Germany had not produced instability in Europe from 1870 to 1890. So, effects of major structural change on the system’s political process had been delayed until 1890. However, Bismarck’s successors were not so adept and were too aggressive. From 1890, the alliance system of Europe grew more rigid and lost diplomatic flexibility, with one alliance centered on Germany and another on Russia and France. The bipolarity of alliances gradually grew more and more rigid and exploded in 1914, resulting World War I and the surrender of Germany in 1918.  

Monday, 31 October 2011

Why Leadership is Important?

King Suryavarman II, the builder of Angkor Wat, the biggest religious stone monument structure in the world.

King Suryavarman II had taken greatest effort in his life after taking the throne to build the great Angkor Wat. It took 37 years to complete the construction of the temple.

An excellent leadership is required for every organization that wishes to achieve its bigger goals. Combined with the strong support from employees or team members, leadership is vital for growth, stability and harmony in an organization, especially through the period of changes and difficulties. The establishment of leadership philosophy is the first thing to do before we lead and motivate our team in order to obtain common objectives. A meaningful and achievable vision, continuous improvement, managing change successfully and respect for diversity are the significant leadership philosophy to help developing an organization or even a country.

Monday, 17 October 2011

The 21st Anniversary of the Paris Peace Agreement: Cambodia and the Road to Stable Peace

Photo: Former King Sihanouk raised hands with Prime Minister Hun Sen in Phnom Penh in 1991 after the signing of the Paris Peace Agreement. I still remember this historic moment when I was a school boy, who was sent, a long with all pupils and students, to greet the two leaders in front of the Ministry of National Defense. Currently, even Cambodia now has enjoyed a stable peace and a rapid economic development, the process of peacebuilding is still ongoing along with the recent functioning of Extraordinary Chamber in Courts of Cambodia (ECCC) or UN-backed Khmer Rouge Tribunal.

UN-backed Khmer Rouge Tribunal in Cambodia.  The ECCC, so far, has finished the case of 001 (the trial of Duch, head of Tuol Sleng Prison or S21), now continues to Case 002. Recently, the UN and the public are skeptical of Cambodian government's inteference in the office of the co-investigating judges of this court regarding the case of 003 and 004.

I.                   Introduction

On January 7, 1979, Khmer Rouge regime was ousted from Phnom Penh to the jungle by Vietnamese armed forces who accompanied by the Kampuchean United Front for National Salvation (KUFNS). Then, the People’s Republic of Kampuchea (PRK) was established and took control most part of Cambodia.  However, civil wars still continued, especially along the Cambodia-Thailand border, in which the batlles took place among the four factions, the PRK based in Phnom Penh, Khmer Rouge, the National United Front for an Independent, Neutral, Peaceful, and Cooperative Cambodia (FUNCINPEC), and the Khmer People’s National Liberation Front (KPNLF). After the complete withdrawal of Vietnamese force from Cambodia in 1989, peacemaking process was launched in full scale with help of the United States of America, France, Japan, United Nations, and Association of South East Asian Nation (ASEAN), especially Indonesia. The four Cambodian factions agreed to end civil war and signed the Paris Peace Agreement on October 23, 1991, which invited United Nation Transnational Authority for Cambodia (UNTAC) to come to organize and supervise a national election in 1993.

Thursday, 13 October 2011

Outlook of Japan's Foreign Policy Under Democratic Party of Japan (DPJ)

Japanese Prime Minister, Yoshihiko Noda, met U.S.'s President, Barrack Obama at the United Nations.

The rising Yen is a major problem for Japan's export. How to deal with the main challenges of Japan's economy are still the priority of the new Administration.  

Recently, the axis of power and economic growth has shifted to Asia, espcially China, Japan, South Korea, and ASEAN countries. In late 2010, with a double-digit growth annually, China has surpassed Japan to become the Second world economic power. However, Japan is still a country casting the sphere of influence, in term of regional cooperation and integration. Since the 1990s, Japan has made considerable contribution to the international community through its active foreign policies and commitment. As, now, the third world economic power, Japan is also a major regional power in East Asia and continues to play significant role in contributing peace, stability, and prosperity in the region and in the world. For example, Japan-US Alliance and South Korea-US alliance have maintained peace and stability in East Asia in facing with regional security challenge, especially North Korea’s nuclear threat. In development issue, Japan is a major donor country in providing Official Development Assistance (ODA) to least developed countries in the world, especially ASEAN countries.

Monday, 3 October 2011

Cambodia's Economic Development and International Assistances

Prime Minister Hun Sen (left) shakes hand with his Chinese Counterpart. China, the main economic development partner for Cambodia?

(Prime Minister Hun Sen delivered his speech at the 4th Cambodia Economic Forum in Feb 2011). Cambodia has to heavily invest in human resource development and to diversify its narrow industrial base (clothing, tourism, construction, and agriculture) if it wants to secure its high-growth potential in the long-run economic development.

For the last ten year from 2000-2009, Cambodia’s economic development is quite remarkable with a high GDP growth rate and macroeconomic stability. This remarkable achievement has been contributed by peace and stability, good governance, economic reform, and international development assistance. After the signing of Paris Peace Agreement in 1991 and UNTAC-supervised election in 1993, large amount of international development assistance has been provided to Cambodia for national reconstruction and rehabilitation, especially on socio-economic development. Among major donor countries to Cambodia, Japan is the largest donor, constituting a substantial amount of ODA for Cambodia. As of 2006, Japan’s ODA, including loans, grant aids, and technical assistance has amounted to nearly 1.8 billion USD for Cambodia alone (Ministry of Foreign Affairs of Japan, 2010). So, a robust economic development in Cambodia has been strongly supported by this large amount of money pouring into development of all sectors of Cambodia’s economy, especially in economic infrastructure development, such as renovation of roads, ports, construction of bridges, dams and irrigation systems etc. Although the current poverty rate is still high, Cambodia’s development by Japanese ODA can be a good example for other war-torn countries, especially the Sub-Saharan Africa.

Wednesday, 28 September 2011

Japan's Outlook for the United Arab Emirates (UAE) and the Middle East

Map of United Arab Emirates (UAE), the leading countries in the Gulf Cooperation Council.

Aerial shot of The Palm with interchange construction in the foreground, UAE The Axis of politics and economy is shifted to the Gulf countries.

As everyone knows, Middle East is rich in oil deposit and gas and is also the main oil exporter of the world in which two-third of oil consumption has been supplied from Middle-East. This region has strategically been important in trade and world politics since the period of Silk Road, at least for the Arab world. Located at the center of Middle East, United Arab Emirates (UAE) has a strong economic growth and diversified economy, not just based on oil. Presently, Japan and UAE have achieved a solid economic partnership and good diplomatic relation.

Friday, 23 September 2011

Nuclear Strategy and "A World without Nuclear Weapon"?

President Barrack Obama gave a press release at the Nuclear Security Summit 2012 in Seoul, South Korea.  In Prague in 2009, he promised to have "a world withouth nuclear weapon".

Trident Missile 

Cold war between United States (US) and the former Soviet Union has gone but the some critical problems have been left unsolved. Huge stockpile of nuclear weapons held by both sides is one of the major problems left by Cold War and arm race. Not like conventional weapon, if just one of those nuclear warheads is used, it would take millions of life. More or less, we can say the world is facing the nightmare of nuclear weapons. However, nuclear arm reduction efforts has taken place since the mid of Cold War to save the world from being plunged endlessly into nuclear arm race. Now, not only the five nuclear powers (US, Russia, China, United Kingdom, and France) in the UN Security Council, who possess these Weapon of Mass Destruction (WMD), but India, Pakistan, Israel, Iran, and North Korea are now also trying to get into the nuclear club.

Sunday, 18 September 2011

Japan and its Foreign Policies since World War II

Emperor Akihito

After World War II, Japan have followed a changing foreign policy as follows:

First is the policy of Realism. According to Yoshida doctrine, Japan must concentrate on economic reconstruction and development while giving minimal interest in defence policy, which is based on the security umbrella of the US (Japan-US Security Treaty). So, after World War II, Japan has been pursuing the policy of realism based on Yoshida doctrine in conducting foreign relations with other countries in the world. This doctrine was established by Prime Minister Yoshida (1946-54) by claiming that while depending on the security umbrella of the US, Japan must only focus on economic development. In this policy, Japan was an realist country by paying little interest in world politics.

Monday, 12 September 2011

Stock Market and Asset Bubble: Lessons learned for Cambodia

Finance Minister Keat Chhon at the official launching of stock trading at Cambodia Stock Exchange in April 2012 at Canadia Center, Phnom Pneh

Everyone can easily answer the two following questions, but we often encounter different answers and perspectives about Cambodia’s economic development. “Will the establishment of “Cambodian Stock Exchange” in July 2011 benefit the whole economy?” and “What policy measure the Government and Central Bank need to enforce to prevent asset bubbles and stock market crash after its opening?” In answering the questions, first we look into the relationship between stock market and asset bubble, Japan’s experience in its economic and financial development and how this will apply to economic and financial sector in Cambodia.

Tuesday, 6 September 2011

ASEAN Centrality Under Pressure

The ASEAN Foreign Ministers' Meeting (AMM) in Phnom Penh, on 2 April 2012

Map of South China Sea

The possible negative impact on ASEAN centrality in the emerging regional architecture, East Asian Community, is inevitable with the recent development in ASEAN+3 framework.  The establishment of East Asian Community (EAC) looms large in the long-term future after the coming into effect of Chiang Mai Initiative Multilateralization (CMIM) with total funding of 120 billion USD as announced by ASEAN Secretariat on 24 March 2010.  At least, the first step of monetary and financial integration in ASEAN+3 countries has been achieved through the entry into force of the CMIM. Then, the idea of common currency basket in East Asia, Asian Currency Unit, become a hot topic for discussion as the next move for economic integration in the future for East Asia by the private sector and the academia (Kawai, 2009, p. 74). In this context, with the new regionalism in place, it is certain that the new institutional dynamics and reforms will emerge and the existing norms and values may decline or might be adapted during the process of institution-building for EAC.  Then, ASEAN centrality is under pressure and reaches the crossroad whether it may be weakened with the recent dynamics or be strengthened during institutional discourse of EAC:

Wednesday, 31 August 2011

Review of Cambodia's Economy and Finance (Up to 2011)

 Source: Cambodian Development and Research Institute, 2010 (Figure 1)

Recently, Cambodia has pursuit a high-growth development by making considerable investment in the public and private sector. Over the period of 2004-2007, Cambodia has achieved a double-digit growth rate of more than 10% per year (Ministry of Economy and Finance, 2010). According to Figure 1, this is the high-growth period for Cambodia. This exceptional GDP growth has resulted in accumulation of domestic saving and financial investment. In 2009, domestic investment accounted for 40% of the total investment in Cambodia, especially in construction sector, small and medium businesses, food-processing factories, and service industry (CDRI, 2009). Beside the large amount of foreign direct investment in the garment sector, small and medium enterprises in Cambodia are thriving due to the growth in number of microfinance institutions which provide low-interest loans to the local SMEs. Before the end of 2008, Cambodia’s international reserve already reached 2.2 billion USD due to strong economic growth and increased confidence in the banking and financial sector (NBC, 2008). However, economic growth is narrowly based on garment sector and tourism industry. Every year, Cambodia experiences trade deficit, which result from too much import and a slim export. So, we can see that Cambodia heavily depend on foreign direct investment to develop its economy since domestic industry cannot gain self-financing through issuance of securities (stocks and bonds). 

Monday, 29 August 2011

Asian Regionalism and East Asian Community (EAC) Building

The 45th AMM/PMC/ARF Meeting, 6-13 July 2012 in Phnom Penh

18th ASEAN Regional Forum in Bali on 23 July 2011

Regional integration has strategic importance for ASEAN and East Asia region as a whole, but ASEAN role and leadership to accelerate regional integration in EAC has been under question and criticism. Jones and Smith (2006) are skeptical of ASEAN’s ability to expand “its institutional framework into the broader East Asian Region, to the view that ASEAN’s economic and political failure after the 1997 [this failed model] equally validated the projection of its managerial way into the wider region?” (p.146). From this skepticism, ASEAN centrality has been viewed as an issue that need to be reviewed to adapt to new environment in East Asia. However, ASEAN has been able to manage to form and expand its regional cooperation without changing its norms and values. After the 1997 Asian financial crisis, ASEAN’s principle has been under pressure with regional crisis and membership expansion (Kao, 2000, p.18-19). According to Capie and Evans (2003), ASEAN’s norms and values have been considered as “ASEAN Way” which includes preference for informality, the principle of inclusivity, consensus, and non-interference (p.46-49). In addition, it is ASEAN way that maintains cohesiveness and has made ASEAN successful in uniting all the 10 countries in Southeast Asia since the norm of non-interference promotes trust and reduce suspicion among member states (Collins, 2000, p. 128-129). For example, since the creation of ASEAN+3 Summit in 1997 and East Asian Summit in 2005, ASEAN has been considered as the driving force in evolving regional architecture, EAC, and ASEAN+3 framework as the main vehicle, and East Asia Summit (EAS) as the complementary element to ASEAN+3 for building EAC (ASEAN Secretariat, 2009).

Friday, 26 August 2011

Is Frequent Changes of Government of Japan a “Lack of Leadership”?

Fuji Mountain, Japan

         As expected, Prime Minister Naoto Kan has announced his resignation on 26 August 2011, which made him the fifth short-tenure leader of Japan in five year. His resignation comes after a turbulent 14 months in power during which he was criticised for showing no remarkable leadership for Japanese Government to deal with the aftermath of the March 11 earthquake, tsunami and Fukushina nuclear plant accident, which result in a failed no-confidence vote at the Diet in June 2011.

          However, this was not surprise news for Japanese people or other countries around the world since Japan has frequent changes of government since after the resignation of PM Koizumi as in 2006. Given this problem, there are two different views on Japan's leadership. The first view is “lack of leadership” due to frequent changes of Japanese Government. But the second view argues for the “flexible” and resilient structure of Japanese politics for attaining multiple development goals although most Japanese Governments were short-lived (roughly one year or less). The two contrasting views are elaborated as follows:

Thursday, 25 August 2011

Outlook for ASEAN and East Asian Community (EAC)

US's President Barrack Obama applauds at the East Asia Summit in Bali, 18 November 2011. The US and Russia's official participation in the EAS provides a landmark achievement for ASEAN in East Asian regionalism.

Cambodia Foriegn Minister Hor Namhong shook hand with his Thailand counterpart at the Special ASEAN Foreign Minister Meeting on Cambodia-Thailand border issue in Jakarta on 22 February 2011. The meeting has provided a constructive engagement for the ASEAN Chair, Indonesia, to help solve border disputes between the two members.   

ASEAN is not only the political hub of East Asian regionalism, but it is also the hub of economic integration in the region.  ASEAN centrality has maintained its status quo in EAC since the Plus Three countries (China, Japan, and South Korea) are denying anyone in the group to take supremacy or regional dominance. However, as the institution building in EAC develop, especially ASEAN+3 and East Asia Summit (EAS) frameworks, it is inevitable that ASEAN centrality would be affected negatively. This will depend on ASEAN itself, new institutional discourse, and the pace of the development process of East Asian Community building.

Monday, 22 August 2011

Challenges for ASEAN

Prime Minister Hun Sen of Cambodia at the Opening Ceremony of the 20th ASEAN Summit in Phnom Pehn on 3 April 2012

Flags of ASEAN Member States

         Development and progress in ASEAN have not been taken for granted since there have been several failed attempts for regionalism before the birth of ASEAN such as Southeast Asia Treaty Organization (SEATO), dissolved in 1977, and Association of Southeast Asia (ASA), founded in 1961 and dissolved soon later. Although with many criticism and obstacles since its establishment, ASEAN is still an example of successful regionalism for developing countries in the world today since it could manage to keeping the cooperation loose and informal for more than four decades based on the “ASEAN Way” of consensus and non-interference but at the same time achieving notable progress in maintaining peace and security in Southeast Asia and succeeding in grouping all countries in the region (Except Timor Leste). Furthermore, recent request by Timor Leste to join ASEAN's membership marks a good expectation that ASEAN is likely have a new member soon.  For example, main political achievement such as Treaty of Amity and Cooperation in Southeast Asia (TAC), the Zone of Peace, Freedom and Neutrality (ZOPFAN), the Treaty of the Southeast Asia Nuclear Weapon Free Zone (SEANWFZ), and, currently the ASEAN Charter, the ASEAN Regional Forum, ADMM Plus, the ASEAN Plus Three Summit, and the expanded East Asia Summit (US and Russia's participation in EAS), ASEAN chair's participation in the G20 Summit, and finally the evolving regional architecture which ASEAN stand as the hub, are all important contributions of ASEAN to regional peace, stability prosperity, and economic integration in the wider region. From these accomplishments, ASEAN has been seen as the attractive model of new regionalism which started first in Southeast Asia and continues to extend to wider region in East Asia and in the Asia Pacific. However, ASEAN centrality in the regional community building is under pressure of adapting to new dynamics of regionalism, the evolving regional architecure (ASEAN+3 Summit, East Asian Community, Exapanded EAS, ARF, and ADMM Plus). 

Toward Consolidation of Democracy in Cambodia

In general, most Cambodian and foreign scholars have a common view that the problem of democracy in Cambodia is derived from two main factors: politics of violence and hegemony, and a kind of democracy which has been implanted by external force (UNTAC) to settle internal conflicts. In addition, Cambodia lacks political culture in favor of democracy due to the fact that this culture was totally destroyed during Khmer Rouge regime. In structural analysis, there is the dominance of the executive branch over the legislative and the judicial branches which makes liberal democracy has limited space to develop, resulting in no check and balance and rule of law. In consequence, consolidation of democracy in Cambodia seems to be curbed at its beginning point and further weakened by a passive civil society with limited freedom of speech.

Friday, 19 August 2011

What is ASEAN Centrality?

US's Secretary of State Hillary Clinton at a Press Conference after the PMC+1 Session with US in Phnom Penh on 11 July 2012

          Map of ASEAN Member States  

The issue of ASEAN centrality has been the major concern for ASEAN itself, its dialogue partner countries, and the academia since regional integration began to take place such as ASEAN+3 Process in 1997 and the first East Asia Summit in 2005.  So far, Regional integration in East Asia and the Asia-Pacific are seen through several regional mechanisms such as ASEAN+3 Summit, East Asia Summit, ASEAN Regional Forum, and Asia Pacific Economic Cooperation (APEC).  Currently, at the 4th East Asia Summit in 25 October 2009 in Thailand, Australia also proposed the idea of Asia Pacific Community by stating that ASEAN is the core of this newly-proposed regional architecture (Ministry of Foreign Affairs of Japan, 2009).  So, in general, whatever proposal on regional integration in East Asia or in Asia Pacific, ASEAN is put on the central hub.  Furthermore, besides political cooperation, Corbett and Umezaki (2009), in their executive summary, conclude that ASEAN Economic Community (AEC) is also at the hub of economic integration in East Asia.  Therefore, ASEAN is the hub of both political and economic cooperation in the region.  However, there are many challenges and some reasons for this.  According to Hernandez (2008), ASEAN is needed to be the driving force of the regional community building efforts due to rivalry between China and Japan in the region.  In other words, ASEAN is just “the driving force by default” while other key regional players are competing with each other for influence and future leadership in the region.

Thursday, 18 August 2011

Economic Development and Democracy

Source: Ministry of Economy and Finance, Cambodia (2011)

Economic development is the major issue for all countries which are always in their political agendas and is also a promise of the government to their people in order to promote socio-economic well-being and whole prosperity of the nation. Democratic and non-democratic countries have a common task, economic development, to keep them survive and prosper both within the national and international context. With economic prosperity, a nation and its people are better-off and receive spontaneous political and social changes in response to new social and economic settings produced by economic development such as the effect of globalization and information technology, and international trade.

Wednesday, 17 August 2011

Current Development of Banking and Financial Sector in Cambodia

Above: the National Bank of Cambodia. Below: tourists can find the ATM machines everywhere in Phnom Penh

The development of the banking and financial sector in Cambodia is generally viewed as a success with the recent progress of modern banking and micro-financial institutions. Recently, with the recent establishment of Cambodia Stock Exchange (CSX)  in July 2011 in which a series of laws and regulations (Law on the Issuance and Trading of Non-Government Securities, Law on Government Securities, Law on Financial Leases) have been adopted in preparation of the opening the new bourse with a common aim of banking and financial development, Cambodia is trying to enter the phase of modernization of its financial sector. The National Bank of Cambodia (NBC) is the central bank which has dual roles of banking regulation and supervision. The first and foremost priority of the NBC is to ensure macroeconomic stability and financial stability (NBC, 2008). It goal is to maintain price stability in Cambodia.

Current Characteristics of Cambodia's Economic Development

With more than half of its population are under the age of 25, Cambodia has a great potential in economic growth for now and the future.

The construction of Naga Complex (behind the National Assembly) is ongoing. In 2010, The construction industry contribted 620 million USD to the economy, approximately 5.5% of the Kingdom's GDP. With a narrow industrial base, Cambodia is still heavily depending on its garment, constructin, tourism, and agriculture industries for economic growth. However, industrial sector has a steadfarst growth of around 8.5% this year.  

With a population of approximately 14 millions and GDP per capita of 830 USD (NIS, 2011), Cambodia is a low income country and is still strongly based on agricultural sector and garment sector as the main thrust of its economic development. However, in development economics, Cambodia has followed each of the four approaches of  economic development, namely stages of growth (Rostow model), structural patterns of development (Lewis model), international dependence, and neoclassical counterrevolution (free market approach).  Recent economic development in Cambodia is quite promising with an expanding industrial base and a rapid progress in the banking and financial sector.

Tuesday, 16 August 2011

Proposed New Strategy for Japan’s Official Development Assistance (ODA) to Cambodia: Human Resource Development

Photos of field trip by Young Leader Programme (YLP) students and their Japanese professor in Japan 

While economic infrastructure development is still vital for economic progress in Cambodia, its process of development study and construction projects can take several years to be completed. For example, the development study of the Second Mekong Bridge in the Eastern part of Cambodia took five years (2004-2009). Until now, the construction project of this bridge has not started yet. Therefore, human resource development should be promoted as the top development agenda of the Government and it should deserve more attention and support from Japan’s ODA policies. In this new century, Japan should allocate more grant aids for human resource development projects. If Cambodia has enough human resource, its self-help effort for socio-economic development will be easily achieve in the same way as other countries in ASEAN such as Singapore and Vietnam. Furthermore, human resource development can contribute to higher productivity and higher per capita Gross National Income (GNI). The accumulation of human capital and capital stock of a country would enable it expand and diversify its industrial base into a technological and capital-based industry, contributing to rapid economic growth and poverty reduction.

Field Trip to Kumamoto Province of Japan and its local Issues, 26-28 January 2010

Utasebune boat in Yasushiro sea, Japan

The sea at the background is the place of Minamata incidents which had seriously been polluted by mercury dumping from a nearby factory.  Even now, compensation to the Minamata victims is still continued.

Kumamoto prefecture is an agricultural base in Southern Japan in which farming and fishing, and big hypro-power dams are its main economy. In addition, manufacturing industry also has its stronghold in this prefecture with large electronic factories such as Sony which make the Kyushu Island the “Silicon Island” producing semiconductors for electronic products. Tourism is also the main source of revenues for this prefecture with the attraction of Utasebune boat in the Yasushiro sea. In development perspective, Kumamoto is a prefecture with great potential of development in terms of agriculture, fishery, manufacturing industry, tourism, and electricity produced by hydro-power from rivers, especially the Kawabe river and Kuma river. However, as a result of economic development, it has also suffered from serious pollutions such as the Minamata pollution case and other controversial issues such as the Kawabe Dam project. That is why the Governor of Kumamoto prefecture, Mr. Ikuo Kabashima, said that Kumamoto may not be the most developed region in Japan, but it has the potential to make giant strides in the years ahead. 

Monday, 15 August 2011

Peace-building in Cambodia: Democracy, Economic Development, and ODA

Cambodia's King Father Norodom Sihanouk

Peace-building has achieved significant progress in Cambodia through democracy, economic development, and international assistances. Recent development is quite optimistic toward a stable peace and it is Cambodia’s self-help effort to do this through long-term economic development and human resource development.

How Can ASEAN Centrality in East Asian Community be Maintained?

ASEAN Leaders posed for picture in ASEAN way style at the Opening Ceremony of the 20th ASEAN Summit in Phnom Penh on 3 April 2012 


Although ASEAN is the hub of regionalism in East Asia, ASEAN centrality is under pressure of regionalization process. it could be weakened under the transformation process of institutional building of the evolving regional architecture, East Asian Community (EAC). 

Opportunities and Challenges for Cambodia Stock Exchange (CSX)

Canadia Tower in Phnom Penh

In general, the establishment of a stock market is good for both short-term and long-term economic growth for an economy. Following this context, Cambodia is in the modernization process of its financial sector with the establishment of the Cambodia Stock Exchange (CSX) in July 2011. However, Cambodia faces systematic challenge in opening the new stock market.

Behind this challenge, there are fears of systematic risk and speculative bubble, which the Cambodian Government should take into account in views that most advanced economies, particularly Japan, have experienced these problems. Given the two issues, the Government should maintain the optimism of long-term economic growth through sound macroeconomic policy and political stability. In line with this, the National Bank of Cambodia, as the Central Bank, should promote strict financial supervision and regulation and heavy capital control, especially at the initial stage after the establishment of the new bourse.

Last but the most importance, creditability of the Central Bank, trust, and public confidence in the banking and financial sector should be enhanced and maintained by the Government and the Central Bank since it serves as the backbone of the macroeconomy and financial stability.

Other articles on Cambodia: 

    (5 March 2014)

    (17 October 2011)

    (03 October 2011)

    (12 September 2011)

6. Review of Cambodia's Economy and Finance (up to 2011)
    (31 August 2011)

     (22 August 2011)

    (17 August 2011)

    (17 August 2011)

    (16 August 2011)

      (15 August 2011)

      (15 August 2011)