Malaysia eyes number one investment spot in Cambodia

Sangeetha Amarthalingam

Newly-appointed Malaysian ambassador speaks about his plans for Cambodia, overcoming hurdles, and working as a team in the spirit of Asean

Newly-appointed Malaysian ambassador speaks about his plans for Cambodia, overcoming hurdles, and working as a team in the spirit of Asean.

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Twelve years on, Malaysia has its eyes set on wresting the top spot for investment in Cambodia after losing it to China in 2007, via investments in agriculture, infrastructure and financial institutions, says Malaysian Ambassador to Cambodia Eldeen Hussaini Mohd Hashim who sees it as his first task in the Kingdom.

The Malaysian government is also keen on increasing the number of registered projects in Cambodia from 130 recorded last year.

As of 2015, Malaysia held the sixth position in terms of investment capital by country with $74.06 million investment or 1.61 percent out of a total $4.6 billion investment, according to the Council for the Development of Cambodia.

The number one investor for that year was Cambodia with 69.28 percent ($3.19 billion), followed by China with 18.62 percent ($856.52 million) and United Kingdom with three percent ($138 million).

Malaysia’s investment in Cambodia is predominantly in the hospitality, industrial manufacturing, real estate and utilities sectors.

On the other hand, trade in the first half of 2018 rose 45 percent year-on-year to $303.6 million versus $209 million. It mostly involved exports of petroleum products, metal for building materials and construction from Malaysia.

His priority lies in bringing back Malaysia to the number one spot, which it last held in 2006.

“My mandate is to get Malaysia back to number one. Our Prime Minister (Dr Mahathir Mohamad) says that Malaysia would become fully developed by 2022. It is when the Tiger of Asia will roar again. We could settle for number two but the target to be number one remains,” says Eldeen in an interview with Capital Cambodia.

Eldeen says Malaysia wants to raise the number of projects by assessing the potential areas through discussion with ministers and state ministers.

“A few ministers in Malaysia are already thinking of coming here to discuss matters on infrastructure and agriculture. For example, Cambodian rice, which is one of the best … we would like to collaborate with exporters,” he adds.

On infrastructure, Malaysians are eager to venture into building schools, houses, bridges, and roads.

Contending that Malaysia would have to compete with Japan, Korea and China, Eldeen is confident that due to its strong relationship with Cambodia, Malaysian companies might be able to clinch one or two projects.

“About two or three Malaysian companies are already showing interest and have made appointments with me including public-listed Bina Puri Holdings Bhd,” he says.

Overcoming challenges, hurdles

He notes that there are five major Malaysian banks and some 300 companies operating in Cambodia which means challenges are being properly handled. “I think it is more about having a right connection and meeting the right people. Of course, we cannot compete with China at the moment, and I don’t think we have to compete with China. We can work with China and strengthen the Cambodian economy. If the economy grows, we grow too,” he says.

However, he also encourages Cambodian companies to invest in Malaysia as there is growth in the middle class which is “good news” to the region.

“Any improvement by our Asean brothers is good news to us because the connection becomes stronger,” he says.

Having said that, Eldeen says there are some hurdles which need to be overcome including settling red tape and drawing up laws that can facilitate investment.

“Malaysia and other countries are trying to help Cambodia transform into a country with reforms, legislations, and rules and regulations,” he adds.

Exploring Cambodia

Seeing that it is his first stint as an ambassador, 44-year-old Eldeen who just presented his credentials with King Norodom Sihamoni on May 1, is also focused on strengthening people-to-people connection and defence cooperation.

Following the audience with the Palace, Eldeen is able to perform his duty officially and would meet with Prime Minister Hun Sen and his cabinet soon.

During his talk with King Norodom, he identified areas of culture and art which he plans to explore in Cambodia including the exchange of culture, traditional dances and heritage, and establishing a twin city.

Malaysian tourist arrivals have grown nearly 100 percent to 90,000 last year, thanks to the business community which promotes Cambodia.

“They work very hard and we would like to work with them to increase the number of number of Malaysian tourists in the coming years. The attraction has mostly been in Siem Reap but Phnom Penh is gaining interest.

“There are many reasons why Malaysians come to Cambodia. A majority of come for religious purposes because of the temples while Muslims who make up seven percent of the arrivals carry out humanitarian work,” says Eldeen, a United Kingdom law graduate.

Renewing collaboration in defence, security

Eldeen says there is a need to further strengthen defence cooperation and collaboration among Asean countries. The Southeast Asian region is divided into two parts. One part comprises Malaysia, Brunei, Singapore, Thailand, Philippines and Indonesia while the other consists of Cambodia, Laos, Myanmar and Vietnam (CLMV).

“In terms of protecting their sovereignty, each country would have their own mechanism to strengthen their defence and security level. There are some collaboration within Asean but not that frequent. As for Malaysia and Cambodia, we would like more cooperation.

“What we like to do is have more engagement in military such as exchange of information, training, joint-venture training, and combating,” he says.

He stresses that security is very important to the region but it is not discussed in depth. “We seldom discuss security and defence but it is time we did it because of the threats coming in. Defending against new threats is something we should explore together with our CLMV friends,” Eldeen adds.

He cites threats such as those in Marawi, Philippines, and South of Thailand as reasons that require better defence cooperation within the region.

“Even though such threats are not spreading, we would like to have that precaution to be intact. My job is also to have that link strengthened. There is cooperation but not that strong, it is too weak or at a minimal stage.

“We can discuss for hours but terrorists and cyberthreats are some of the things we are worried about. Of course, cyber security is part of that, and it needs to be beefed up also,” he adds.

China’s interest in Asean

Despite negative perception regarding Chinese investment and interest in the region, Eldeen echoes Dr Mahathir’s opinion that China is not a threat.

“It is always our friend but of course there are some conditions to it. You can help us but with the condition that we will set up the conditions. I mean, who would not want to have some collaboration, especially with investments flowing in as much as $1.2 billion.

“No other country would say no to that kind of investment but there are some conditions to it. We have to study that condition. If both parties agree to that condition then we can sign an agreement,” he explains.

Eldeen says this in reference to the agreements made in Malaysia that were laced with conditions after public outcry over controversial infrastructure agreements made by the previous Malaysian government. The agreements including the $43 billion East Coast Rail Link were revised by the current government, which won the general election last year.

Similarly, in Cambodia, China is expanding its interest via its Belt and Road Initiative that has elicited negative views by certain quarters who allege that it is a form of neo-colonialism.

“We have to secure our priorities. The priorities cannot be just laid out and signed with no conditions. I don’t think anyone would sign a document without considering the threats. Therefore, the way I look at it, China was never a threat. It is a strategic economic partner for us just like the US,” he says.

However, he does not dismiss economic threats in the form of US-China trade war, and sanctions, but not every situation is considered a threat. Based on his observation, the US is trying to convince the region to be cautious with the entry of China and while most nations are, they also deem both parties as friends.

“We still believe that China is a friend. The same way we treat the US although the level of friendship varies. For instance, Cambodia and China probably have a different level of trade, defence and political relationship compared to the rest of us. To me, it is a very subjective issue to discuss. It is very broad and we should just leave it at that,” he says.

A band of brothers

Cambodia is faced by the impending withdrawal of the Everything But Arms preference by European Union, and the threat of the same with the US’ general special preference which observers say could result in the loss of attractiveness among investors.

“As a bloc, Asean will not let its brother fall. If something is wrong, we will alert each other. The rest of Asean would do the same because we do not want any other Asean countries to fall because of that.

“We will work together and watch each other’s back, and with that I sense that Malaysia especially would make sure this works. That is why Malaysia is focusing on CLMV,” he adds.

He says Asean can sustain economically on its own if it only relies on internal trade generated by its 680 million population.

“The bloc is economically strong. With just internal trading alone, one can be millionaire. You can have increase in trade investment just like that. Similar to China. That is why our PM emphasises that we must work as a unit. We cannot work individually,” he adds.

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