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Relations with New Zealand
Cambodia Overview
New Zealand was involved in the peace process in Cambodia from early on, and in 1993 provided its then largest peacekeeping force (over 100 military personnel) to the UN peacekeeping mission (UNTAC) to Cambodia.
The bilateral relationship between New Zealand and Cambodia is limited, but constructive. Bilateral trade is steady with two way trade close to NZ$1.6m. In 2005 New Zealand exports to Cambodia were over NZ$0.7m. Dairy has consistently comprised half of total exports. Cambodia exports to New Zealand totalled NZ$0.8m for the same period. Footwear and garments accounts for over 50% of these exports to New Zealand.
New Zealand consultancy companies are active in Cambodia, and have been carrying out a range of contracts in water supply and sanitation, resource management, civil engineering and other areas.
The New Zealand Ambassador resident in Bangkok is accredited to Cambodia, and visits the country periodically. Many Cambodian immigrants and refugees have made their home in New Zealand, especially during the 1980’s.
Cambodia’s economy remains vulnerable and economic growth achieved has not translated into the widespread poverty reduction necessary to make a difference for the poor.
The Cambodian Government’s development priorities are reflected in the “Rectangular Strategy” developed to address the nations Millennium Development Goals (MDGs). The Strategy draws on the Socio Economic Development Plan and the National Poverty Reduction Strategy and is a synthesis of the priorities of these documents. The core of the strategy is good governance, which is to be focused on four areas of reform: fighting corruption, legal and judicial reform, public administration reform, and reform of the armed forces and demobilisation. The Strategy provides the basis for the preparation of the National Strategic Development Plan (NSDP) that the Government has endorsed as the single development plan for 2006-2010.
Strengthening the Government’s capacity and effectiveness in aid management linked to the MDGs is a key priority. Aid coordination is the mandate of the Council for the Development of Cambodia (CDC) and there is a need for donors to strengthen their links and harmonize procedures with other key agencies such as the Ministry of Planning and the Ministry of Economy and Finance. There is also an imperative to improve aid coordination to enhance development effectiveness. A number of initiatives are underway, particularly since Cambodia became an OECD pilot country on harmonisation and alignment under Rome Declaration on Harmonisation. The creation of a high level Government Donors Coordination Committee and the establishment of eighteen technical working groups are significant achievements.
Given Cambodia’s substantial development and financial needs it will continue to depend heavily on ODA in the medium term.
New Zealand’s bilateral development assistance to Cambodia began as a stand alone programme in 1994. New Zealand’s development cooperation with Cambodia comprises support through a range of NZAID programmes. Our principal involvement is through NZAID’s Cambodia country programme. Other NZAID programmes providing support to Cambodia include a range of regional and contestable funds as well as funds to voluntary agencies.
As a small donor with an imperative to focus in order to maximise development impact, NZAID concentrates on two main geographic areas – Siem Reap province in the north-west and targeted assistance in the north east.
The Cambodia country programme allocation is $3.5m in the 2005-2006 financial year and is expected to grow to an annual allocation of $5.0m by 2008.
NZAID concentrates its bilateral assistance on the development of pro-poor tourism and natural resource management. This is complemented by regional and thematic programme assistance for trade and private sector development, and human resource development. Underpinning this sector focus is the recognition that the protection of human rights, especially for the poor, is pivotal to addressing poverty. While improving education and health is of critical importance to Cambodia, there is already extensive donor activity in these two sectors. NZAID therefore focuses its attention on other sectors of need.
A considerable portion of the bilateral programme allocation is channelled through NGOs, including Volunteer Service Abroad (VSA), the Cambodian Defenders Project (legal awareness raising), the Cambodia Trust (prosthetics), Licadho (human rights) and Save the Children Fund/Mith Samlanh (vocational training). A number of other initiatives are also supported through Small Projects Fund grants targeting community level development needs. Support to government mainly consists of English language training for officials. A number of project initiatives with government ministries are also funded through NZAID’s Asia Development Assistance Facility.
New Zealand has received a considerable number of Cambodian settlers over the years, both as refugees since 1980 and migrants in more recent years.
As Cambodia develops and enters the global economy an increasing number of Cambodians are looking to travel, study overseas and resettle with family that left after the Khmer Rouge years.
An increasing number of New Zealand tourists are travelling to Cambodia now with the Angkor Wat ruins in the northwest being a particular point of interest. Cambodian tourists to New Zealand are negligible. Most Cambodian arrivals come to visit family or friends or to study.
The Council for the Development of Cambodia (CDC) is the central body for coordinating donor and investor interests.
Cambodia joined the WTO in 2004, one of the first LDC countries to do so since the WTO’s creation. New Zealand has provided some assistance to Cambodia to strengthen their trade policy machinery and promote their agricultural interests during their integration into the ASEAN Free Trade Area and accession to the WTO rules-based global trading system. This has included advice on the requirements of accession to the WTO Agreement on Agriculture (AoA). Assistance has also been provided on sanitary and phyto-sanitary standards, to lift export capability in agriculture.
Defence linkages with Cambodia have been consistent since the United Nations entered Cambodia after the 1991 Paris Peace Accords. Both the New Zealand Army and Navy contributed mainly in observer and mine clearance roles.
Cultural linkages with Cambodia are in their infancy. They can be expected to grow as the Cambodian community in New Zealand develops stronger linkages with home.
An increasing number of New Zealand business interests are exploring the Cambodian market. This started with New Zealand consulting services pursuing work in the agricultural, roading and engineering sectors funded under Asia Development Bank and World Bank programmes. These linkages have developed further now with some firms establishing resident operations and others exploring the market.
Official Name - Kingdom of Cambodia - Land Area - 181,040 sq km - Population - 14.1 million (IMF estimate for 2005) - Capital City - Phnom Penh - Religion - Buddhist (Theravada) majority - Language - Khmer (national language)
Political system - Constitutional Monarchy - National government - Coalition Government - National legislature - National Assembly: 123 MPs elected by popular vote (proportional representation). Members serve a five year term. Senate: 61 seats. 2 members are appointed by the monarch, 2 elected by the National Assembly and 57 elected by parliamentarians and commune councils. Members serve a five year term. - Last election - National Assembly: 27 July 2003; Senate: 22 January 2006 - Next election due - National Assembly: July 2008; Senate: January 2011 - Head of State - King Norodom Sihamoni (since 29 October 2004) - Head of Government - HE Prime Minister Samdech Hun Sen
GDP - US$5.6 billion (2005) - GDP breakdown - Industry 29.2%, Services 37%, Manufacturing 21.5%, Agriculture 32.9% - GDP per capita - US$2,200 (CIA 2005) - Real GDP growth - 9.8% (2005) - Exports of goods fob - US$2,771 million (2005) - Main exports - Garments, rubber, wood, fisheries products, and other agricultural products - Principal export destinations (2005) - 1 United States 61.5%; 2 Germany 10.7%; 3 Viet Nam 4.9%; 4 United Kingdom 4.7%; 5 Canada 3.9% - Imports of good (fob) - US$-3,589 million (2005) - Principal import sources (2005) - 1 Thailand 28%; 2 China 16.4%; 3 Hong Kong 15.3%; 4 Viet Nam 12.8%; 5 Singapore 9.3% - Principle imports - Diesel, construction materials, gasoline - Consumer price Inflation (av%) - 5.8% (2005)
Two way total trade - NZ$1.57m (Dec 2005) - NZ Exports (FOB) - NZ$0.76m (Dec 2005) - Main Exports - Leather, dairy products, fruit, refrigerators - NZ Imports (CIF) - NZ$0.8m (Dec 2005) - Main Imports - Clothing, fabric, footwear, and wood products (veneers, inlays) - Services Trade - A range of consulting services is provided by New Zealand based consultancies (including the engineering, forestry, rural development, agriculture, education, tourism, and public sectors). Services are often funded by Asia Development Bank (ADB) and World Bank loans, and bilateral/multilateral grant funding.
As a now post-conflict state, Cambodia is struggling to rebuild many of the economic, social and physical foundations needed to ensure future growth and development.
The current Government is providing more political stability and economic growth, but Cambodia remains one of Asia’s least developed countries. While foreign direct investment has increased steadily in recent years, particularly in the industry (garment and footwear in particular) and tourism sectors, the benefit is yet to reach far beyond the main urban centres and a minority proportion of the population. Cambodia relies heavily on aid.
The bilateral relationship between New Zealand and Cambodia is limited, but constructive. Bilateral trade is steady with two way trade close to NZ$1.6m. New Zealand’s Agency for International Development (NZAID) supports governance, human resource development and rural development programmes. The bilateral allocation for 2005/2006 was also around $2 million.
Around 90% of the population are ethnic Khmers, 5% are Vietnamese, 1% are Chinese and 4% are of other ethnicity. The Islamic community, known as the Cham, is significant (around 200,000). The Cham are spread across several provinces, and a number of indigenous hill tribes in the remote north-east of Cambodia.
Khmer is the official language and is spoken by more than 95% of the population. French, English and Vietnamese are also widely spoken.
About 90% of Cambodians live in the central lowlands region. The Mekong River provides fertile and irrigated fields for rice population and subsistence farming employs the majority of the workforce.
Cambodia suffered years of conflict from the early 1970s until the early 1990s, especially during the 1975-1979 period of Khmer Rouge rule.
The 1991 Paris Peace Accords mandated democratic elections and a cease fire. The United Nations Transitional Authority in Cambodia (UNTAC) was established to supervise implementation of the UN Peace Settlement. The UN sponsored elections in 1993 helped restore some semblance of normalcy. A new constitution, promulgated on 24 September 1993, transformed Cambodia into a Constitutional Monarchy.
FUNCINPEC (Royalists) formed a coalition government with the Cambodian People’s Party (CPP) following the 1993 election. This first coalition government ended in 1997 after factional fighting when in the aftermath of armed clashes between the forces loyal to Hun Sen and Prince Ranariddh the former re-asserted his political dominance.
The 1998 elections resulted in another coalition government between the FUNCINPEC Party and the CPP. CPP leader, Hun Sen, was made Prime Minister and Prince Rannaridh became President of the National Assembly. A Senate was established in 1998.
During the past five years, Cambodia has enjoyed much more political stability and territorial unity than for decades.
The last national parliamentary elections were held in July 2003 . Official results were released on 30 August 2003, over a month after the elections. The delay was a result of a series of appeals to the Constitutional Court over the election process. The CPP won 73 seats, followed by FUNCINPEC with 26 and Sam Rainsy at 24 seats. Almost a year after the elections, a Government was formed between the CPP and FUNCINPEC.
The threat and eventual decision, by King Norodom Sihanouk to abdicate in late 2004 raised fears over the potential for political instability. King Norodom Sihanouk has played an important role in the political life of the country. He is seen as a symbol of reconciliation and unification for the Cambodian people.
However, despite much concern over the turn of events that followed that abdication decision, the process of crowning Norodom Sihanouk’s successor ran smoothly. Norodom Sihamoni formally succeeded his father on October 2004, in an outcome that was warmly welcomed by the Cambodian people.
Despite recent progress, the Cambodian economy continues to suffer from the legacy of decades of war and internal strife.
The country’s economic infrastructure was devastated by the civil wars of the early 1970s and late 1980’s, the rule of the Khmer Rouge between 1975 and 1979, and Cambodia’s diplomatic isolation in the first half of the 1980s.
Growth accelerated in the late 1980s with the government’s gradual move towards free market economic policies. Growth was propelled further during 1991-1993 by the UN presence in Cambodia.
The July 1997 internal conflict set back business confidence, and development assistance flows. The Asian economic crisis also had a negative impact on the economy. However, 2001 and 2002 showed good economic progress with the economy stabilising and the introduction of a Value Added Tax (VAT).
The garment industry, although contentious in regard to worker conditions, has played a considerable part in recent economic progress and increased export earnings. In 1999 the US and Cambodia signed a Bilateral Textile Agreement. This gave Cambodia a guaranteed quota of US textile imports and established a bonus for improving working conditions and enforcing Cambodian labour laws and international labour standards in the industry. Tourism is also growing with Angkor Wat one of the countries most popular tourist destinations. Foreign visitor numbers had passed one million for the year by September 2005.
Agriculture represents around 32.9% of GDP making Cambodia a largely subsistence-based economy. Around 75% of rural households depend on agriculture and its related subsectors. Regular droughts and floods, however, affect rice production leading to a need for food aid.
Cambodia has been rich in natural resources but persistent exploitation of forests, fisheries and gems has resulted in rapid resource depletion. The fisheries resource remains at risk from proposals to dam the Mekong River and its tributaries. In 2005 exploitable oil and natural gas deposits were found beneath Cambodia’s territorial waters. Commercial extraction is yet to begin.
International trade and investment comprises only a small proportion of economic activity. This FDI has tended to be concentrated in garment manufacturing, services, construction, tourism, and to a lesser extent, wood processing. Malaysia is the largest investor, followed by China, Taiwan, Singapore, Korea and France.
Cambodia continues to remain heavily reliant on foreign assistance – about half of the central government budget depends on donor assistance. Japan is by far the largest donor to Cambodia.
Cambodia’s geographical position between Thailand and Viet Nam has historically dominated its foreign relations. Since the signing of the Paris Peace Accords in 1991 the Cambodian Government has recognised the need for international diplomatic support and foreign aid and the need to work with others to meet common regional and global challenges.
Cambodia is a member of the G77, the International Monetary Fund, the United Nations (UN) and a number of UN bodies including; the International Labour Organisation, the World Health Organisation and the Food and Agricultural Organisation. Cambodia acceded to the ASEAN Treaty of Amity and Cooperation in January 1995 and participated in the ASEAN Regional Forum for the first time in 1995. The outbreak of fighting between CPP and FUNCINPEC in July 1997 in Phnom Penh delayed Cambodia’s entry into ASEAN until April 1999. Cambodia was the chair of ASEAN for the 2002/03 term. As a member of ASEAN, Cambodia is a part of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) negotiations underway. In October 2004, Cambodia became the 148th member of the World Trade Organisation (WTO).
Despite its participation in international bodies, Cambodia’s relations with the UN and Western Governments continue to be subject to diplomatic spats over human rights. Cambodia continues to receive criticism for politically motivated violence and treatment of ethnic minorities.
Cambodia’s relationship with Thailand has long been complicated by the presence on the Thai-Cambodia land border of refugees and groups involved in armed resistance to the Cambodian government, as well as disagreement over disputed waters in the Gulf of Thailand. Illegal harvesting of timber in border areas has also been an irritant in the relationship. Relations were severely strained in early 2003 when anti-Thai riots broke out in Phnom Penh. The riots, which resulted in damage to the Thai Embassy and Thai businesses, began after false rumours spread that a popular Thai actress had claimed Angkor Wat belonged to Thailand. Full diplomatic relations between the countries were restored after Cambodia undertook to pay compensation to the Thai government for the damage caused to the Thai Embassy.
Cambodia's relations with Viet Nam have been complex but have gradually improved since the UN-sponsored elections in 1993. There are large numbers of ethnic Vietnamese (many who have lived in Cambodia for generations) living in Cambodia and Prime Minister Hun Sen has ties with Viet Nam dating back to the Khmer Rouge years and his sanctuary there between 1977 and 1979. Sensitivities still exist over border issues but progress has been made. In late 2005 both sides ratified the “Supplementary Treaty to the 1985 Treaty on the Delimitation of the State Border between Cambodia and Vietnam”. The planting of border markers is scheduled to begin in late 2006 and be completed by late 2008.
In March 2003 the UN and Cambodia signed an agreement to establish a joint international-Cambodian court to prosecute those most responsible for crimes and serious violations of Cambodian and international law between 17 April 1975 and 6 January 1979. The agreement involves Cambodia, with UN assistance, running two Extraordinary Chambers within the existing Cambodian justice system.
It is widely agreed that United Nations Assistance to the Khmer Rouge Tribunal (UNAKRT) has an important role to play in advancing Cambodia's judicial reform and that the trials will provide a good opportunity for building capacity and awareness in transparent judicial process and other important, associated areas of human rights. Legal and Judicial reform is one of the four central components of the new Cambodian Government’s 'Rectangular Strategy' for reform.
New Zealand’s Governor General, Dame Sylvia Cartwright has been appointed a judge in the Trial Chamber. She will take up the position after her term as Governor General ends in August 2006.
In 2005 New Zealand made a NZ$500,000 contribution to the fund for UNAKRT.
Occasionally other members of the Cambodian National Assembly who have private links with New Zealand visit, eg Prince Norodom Rannaridh, HE Veng Sereyvuth (Minister of Tourism)
The Safetravel website provides a travel advisory for travellers to Cambodia [external link].
