It's time to help Cambodia diversify

Written by Brendan Brady
Wednesday, 29 April 2009

New European Commission head of delegation to Cambodia, David Lipman, speaks to the Post’s Brendan Brady about agriculture, the economy and his plans in the Kingdom.

Last year, the Cambodian government requested food relief from development agencies even as it signed contracts to export significant stocks of rice to foreign governments. Should the government abstain from selling food stocks if it is simultaneously requesting food aid?The basic problem in Cambodia with food production is that they don't have a lot of storage capacity, and unless you have the storage capacity, you can't keep the food in the country.

So, often, it is wiser to export because you can't stock it. One of the things we will be doing with the food facility will be to help them increase storage.

Does Cambodian agriculture require an overhaul?
I think the main problem is to try to help them increase production because, according to statistics, 65 percent of rural households in Cambodia are net food buyers, which is enormous.

Does Cambodia have a food security problem?
There's a problem. The very fact that we have this food facility which is going to help with production means there is a serious production problem. I wouldn't say food crisis, but help is needed. A common criticism of the economy is that it relies on two sectors: tourism and garments.

How resilient does the Cambodian economy appear in the face of the global downturn?
We need to help Cambodia diversify. It only has two export sectors. Garments make up 80 percent of exports; manufacturing of shoes makes 11 percent.

They need to do other things and we want to help them diversify into light manufacturing. And there's more that can be done in the agricultural field, with processed agricultural products.

Has the EC identified Cambodia as a country that may be in need of a bailout in response to local fallout from the global recession?
Bailout is not the word we would use. We are focusing on helping the poorest Cambodians - in terms of food supply and primary education. In fact, the EU as a whole - that means the EC plus its member states - have programmed assistance between 2009 and 2011 of the order of €600 million. So we are giving a great deal of assistance to Cambodia.

We need to help cambodia diversify. it has only two export sectors.

They are the major beneficiary per capita in the whole region.

We're focusing on rural, agricultural development.

We're focusing on working with the government on its strategy; what's important is ownership. We don't want to do things that the government doesn't want us to do. We want to focus on things the Cambodians are doing themselves.

We're helping with primary education. We have a €35 million program for education. We're focusing on helping with public financial management, which is very important - helping them to manage their finances better than they do at the moment. Human rights and democracy is an area of great importance, as well. We've got a huge program of €10 million that's up-and-coming, including supporting the tribunals, judicial reform, areas like that.

The story of Cambodia's oil prospects has attracted a lot of attention. Critics warn of a textbook "oil curse" while the government has told critics to ease off as oil extraction has yet to start. Do you believe Cambodia is well positioned to manage its potential oil resources?
What's important in all of these processes is accountability and transparency. We - within the framework of our various programs for assistance, budget support - are taking into account the questions of transparency and accountability in these areas, and we attach great importance to this.

They haven't started production yet and won't start yet until 2011, according to my understanding.But we are working with the government of Cambodia to ensure everything is done in a transparent and accountable manner. We have not been involved in the preliminary contracts [with the companies concerned].