VZCZCXRO6894
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0607/01 2320846
ZNR UUUUU ZZH
P 200846Z AUG 09
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 1090
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 PHNOM PENH 000607 
 
SIPDIS 
STATE PASS USTR - KLEIN 
BANGKOK PASS FCS - GRIFFIN GREENE 
HANOI PASS FCS 
SINGAPORE PASS FCS 
 
E.O. 12958: N/A 
TAGS: ETRD EINV CB
SUBJECT:  AMERICAN BUSINESS COMMUNITY INFORMS SENATOR WEBB THAT 
CAMBODIA IS OPEN FOR BUSINESS 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1.  (SBU) SUMMARY:  During an August 18 meeting with Senator Jim 
Webb, representatives from the American business community were 
positive on investment and trade prospects in Cambodia.  They 
highlighted Cambodia's liberal and reforming legal regime, its 
generally supportive government, and widespread admiration for the 
United States as key factors which make Cambodia an attractive 
destination for foreign investors.  Challenges to doing business in 
Cambodia include the weak judiciary, undeveloped human resources, 
poor infrastructure, and lax rule of law.  Senator Webb's brief 
visit to Cambodia was an encouraging sign for members of Amcham, who 
warmly welcomed greater U.S. engagement in the region and future 
visits of the Senator, other U.S. representatives, or companies to 
Cambodia to learn more about the country's often underappreciated 
economic and commercial prospects.  END SUMMARY. 
 
Cambodian and U.S. Governments Supportive of U.S. Investors 
---------------------------- ----------------------------- 
 
¶2.  (SBU) During an August 18 luncheon hosted by the Ambassador, 
Amcham members told Senator Webb about the Cambodian government's 
constructive attitude toward the private sector and its steady 
process of legal reforms after acceding to the World Trade 
Organization (WTO) in 2004 as important factors underlying increased 
interest by American companies.  Amcham Chairman Brett Sciaroni 
praised the Cambodian government's regular dialogue with the private 
sector through the Government Private Sector Forum (GPSF), which 
culminates in bi-annual meetings during which the Prime Minister 
directly addresses the concerns of businesses in all sectors of the 
economy.  Sciaroni confidently asserted that "no Amcham has as much 
influence on a government in Southeast Asia as [in Cambodia]." 
(NOTE:  Sciaroni has chaired the Amcham and the GPSF Working Group 
on Law, Taxation, and Good Governance since their inceptions.  END 
NOTE.) 
 
¶3.  (SBU) Sciaroni also expressed appreciation for increased USG 
engagement on economic and trade issues with Cambodia, which has 
allowed Amcham to emerge as one of the most active and 
fastest-growing business associations in Phnom Penh -- doubling its 
membership to 65 members in only two years.  He suggested the U.S. 
Embassy's strong support to U.S. investors as another major factor 
that has led to more U.S. companies doing business in Cambodia. 
 
Weak Judiciary Tops List of Persistent Problems 
--------------------------------------------- -- 
 
¶4.  (SBU) Senator Webb cited a weak judiciary as a primary deterrent 
to American investors in Vietnam when it was opening to American 
companies in the mid-1990s.  According to Sciaroni, American 
companies are only beginning to take increasing note of Cambodia, 
but as a practicing lawyer, he bleakly assessed the judiciary due to 
corruption, inefficiency, and political interference.  Because of 
the Foreign Corrupt Practices Act, U.S. companies must rely on 
political influence to resolve disputes that go to court, a 
situation he deemed "undesirable" in Cambodia's small market. 
Several businessmen were positive about the nascent National 
Arbitration Center, one of a number of reforms underway to improve 
the investment climate, which will be an alternative forum for 
resolving commercial disputes.  Challenges noted by the private 
sector representatives also included weak human resources for 
technical positions, unreliable energy supplies resulting in regular 
brownouts, and lack of intellectual property right protections. 
 
Commercial Opportunities Abound 
------------------------------- 
 
¶5.  (SBU) According to Amcham Governor Curran Hendry, commercial 
opportunities exist in mineral, oil and gas exploration (Cambodia 
remains relatively unexplored by large U.S. and international 
companies); agriculture; tourism; manufacturing; infrastructure; and 
power generation and distribution.  Dararith Lim, Country 
Representative for GE, which inaugurated its office in 2009, said GE 
is exploring opportunities in health care; water technology; 
consumer and industrial lighting; renewable energy; oil and gas 
development; transportation; and infrastructure.  In addition, he 
noted that the initiation of a commercial presence in recent years 
by blue-chip American companies such as Microsoft, GE, Intel, 
Dupont, and Crown Holdings demonstrate the commercial potential that 
U.S. companies are beginning to perceive exists in Cambodia. 
 
U.S. Community Wants More Visits 
-------------------------------- 
 
¶6.  (SBU) Sciaroni expressed his appreciation for the Senator's 
visit, noting its importance in helping to raise awareness among 
American investors about commercial opportunities in Cambodia. 
 
PHNOM PENH 00000607  002 OF 002 
 
 
Sciaroni predicted that Cambodia would be one of the first countries 
in Southeast Asia to emerge from recessions induced by the global 
economic slowdown, and expressed his hope that U.S. companies would 
be able to capitalize on this recovery.  Sciaroni expressed his hope 
that the Senator's visit would be a catalyst for future visits by 
other senior officials, laying the groundwork for further 
exploration of commercial opportunities by American companies. 
 
COMMENT 
------- 
 
¶7.  (SBU) The Cambodian government recognizes foreign investment as 
critical to developing the economy and maintains among the most 
liberal investment regimes in Asia.  While American companies are 
increasingly aware of Cambodia's openness and are exploring the 
market in increasing numbers, in general, U.S. perceptions about 
Cambodia have not kept pace with the country's progress.  Senator 
Webb's visit and message of enhancing American engagement in 
Cambodia's economy is a boost to the small, but growing, U.S. 
commercial presence in the country.  Such high-profile visits also 
help to update perceptions of Cambodia and better inform potential 
investors that Cambodia is open for business. 
 
RODLEY