Lorraine Harinton |
By Simon Lewis
The Cambodia Daily
Looking to compete with Chinese influence in the region, the U.S. government is making plans to help American companies win large-scale infrastructure projects in Cambodia, U.S. officials said on Thursday in Phnom Penh.
The plans, which come as part of a strategic and economic em-bracing of
Asia by the administration of U.S. President Barack Obama, look to
challenge China’s near monopoly on big undertakings, such as roads and
hydropower dams in the country.
“The pivot to Asia…is not only a security focus, it’s an economic focus
because in order for us to be successful in the long term, we have to be
economically involved in this region,” said Lorraine Hariton, U.S.
State Department special representative for commercial and business
affairs, who spoke to reporters during a round-table meeting at the U.S
Embassy in Phnom Penh. Her visit followed a meeting in Hanoi on Monday
to discuss infrastructure in the region as part of the U.S.-led Lower
Mekong Initiative.
“We are concerned that American companies are not involved in this
region—Cambodia as well as the general Lower Mekong region—especially in
this area of infrastructure,” Ms. Hariton said. “We are looking to get
some good winds here and work on some deals that will allow us to play a
larger role in this region.”
Hong-Phong Pho, the desk officer for Cambodia, Vietnam and Laos within
the U.S. Department of Commerce, said U.S. government agencies—including
the Export-Import Bank of the United States, the U.S. Overseas Private
Investment Corporation and the U.S. Trade and Development Agency—were
ready to help develop infrastructure in the region.
“That’s the tools that we have, but before we can apply those tools, we
need an actual concrete project. Whether it’s an investment project,
like an airport where there’s a demand for goods and services, or just
great sales [of U.S. products and technologies].”
He said American firms could be involved in projects such as power
plants, and that one unnamed U.S. company present at the meeting in
Hanoi was interested in building a new airport in Cambodia.
“For me, deals are what’s important,” Mr. Pho said. “As a result of
our meetings in Vietnam, we found a certain [U.S.] company that has the
capability not only to operate and build airports, but also bringing
financing. Now that’s really important.”
“It’s that kind of connection that can make things happen. And we will be right there facilitating it,” he added.
While some U.S. companies have made inroads into Cambodia’s
economy—U.S. brands like Ford and Dairy Queen entered the market in
2012—American firms have not been granted any of the country’s larger
projects in the infrastructure and energy sectors.
Currently, Chinese companies with close links to the Chinese government
dominate Cambodia’s infrastructure sector, building roads, bridges and
hydropower dams, with Chinese banks also providing funding.
Just last month, two Chinese companies announced that they would spend
$9.6 billion building a brand-new seaport in Koh Kong province, and a
400-km railway connecting it to a steel mill in Preah Vihear province.
According to the most recent figures from the Cambodian Investment
Board (CIB), which cover 2012 up to the end of November, new Chinese
investment totaled more than $250 million in the 11-month period.
Only one large investment in Cambodia during the period came from the
U.S.—a 49 percent stake in a $10.9 million tourism development on an
island off the coast of Koh Kong province.
Although the CIB figures only represent pledged investment agreed with
the government, U.S. Embassy deputy political and economic section chief
David Myers said no better data for U.S. investment was available.
Also speaking at the embassy, Bretton Sciaroni, chairman of the Cambodia
chapter of the American Chamber of Commerce, said that multinational
corporations from the U.S. had taken an interest in Cambodia of late.
“For major corporates, it’s unrealistic to think that you’re going to
have them come one day and the next day decide to invest,” he said.
“What I view this as is putting seeds in the ground and it will grow
later.”
He also said many companies operating in China were interested in
setting up part of their operation in Cambodia “to hedge their bets
because the Chinese economic environment is more uncertain for
international companies.”
Daniel Mitchell, a board member at the American Chamber of Commerce,
who has been doing business in Cambodia for 12 years, said the main
considerations for such firms coming into Cambodia would be the cost and
reliability of electricity and telecommunication services.
He also said that, rather than putting investors off, the human rights
situation and difficulties over land in Cambodia could be helped by U.S.
investment, which is subject to higher standards. Some of those
standards come from the fact U.S. firms must comply with regulations on
foreign bribery found within the Foreign Corrupt Practices Act.
“One way of addressing the human rights issues is to promote the investment of responsible capital,” he said.
“I’ll let you draw the conclusions of where responsible capital comes
from, and the U.S. is definitely on that list, and where other capital
comes from—places where there just aren’t those standards and it isn’t
something that’s important.”
The State Department’s Ms. Hariton said Cambodia’s main problem in garnering investment from the U.S. was its image.
“I think we need to do a better job of marketing Cambodia especially to the United States,” she said.
“There [are] perceptions…about how the country might have been 20 years ago, not what it is today.”
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