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Kratie Province Kratie Province Investment Profi le October 2008 LAOS Bangkok Stung Treng THAILAND Poipet Siem Reap CAMBODIA Kratie Kampong Cham Phnom Penh VIETNAM Poipet Ho Chi Minh City Sihanoukville KRATIE The Gateway to Cambodia’s North-East DISCLAIMER The authors’ views expressed in this publication do not necessarily refl ect the views of the United States Agency for International Development (USAID) or the United States Government. Kratie Investment Profi le Greetings from the Governor p2 National Strengths p3 Open Business Environment Inexpensive Workforce Strategic Regional Location Why Kratie? p4 1. Location – close to both Phnom Penh and Vietnam 2. Gateway to the north-east – Cambodia’s next ‘economic pole’ 3. Thriving Tourism 4. Diverse Electricity Supply 5. Untapped Natural Resources Key Provincial Industries p5 Business Opportunities p6 Ongoing Developments p7 Want to learn more? p8 Statistics p9 This Investment Profi le was produced by Emerging Markets Consulting (EMC) for the USAID-funded Cambodia MSME Project implemented by DAI. Kratie 1 Investment Profi le Greetings from the Governor Greetings from His Excellency the Governor Kratie Province is the gateway to Cambodia’s beautiful north- east. Serving as a port of debarkation from Phnom Penh and from Laos, Kratie opens the door to the region’s natural wonders – the magnifi cent Mekong River, prehistoric mountains ranges, spectacular waterfalls, forests and jungle, abundant wildlife and many fascinating ethnic minority hill tribes. Famous for its cultural heritage and natural resources, Kratie is also home to the Irrawaddy dolphins. These rare mammals are a Kratie signifi cant drawcard for the province. Like our nation, Kratie is experiencing rapid and sustained economic growth. While our position as the gateway to the natural wonders of Cambodia is certainly valid, it is not all that we offer. Our business infrastructure is excellent. New roads have reduced travel times and encouraged new businesses. We share a border with Vietnam, allowing for exciting trade opportunities, as well as giving us an additional source of electricity. To continue to grow our economic base and strengthen our reputation as a favoured location for investment, the Kratie provincial government has worked to strengthen the business environment. We will not, however, rest. We will continue to make improve- ments in our province to attract additional investment and sup- port our existing business enterprises. We are excited about the potential to broaden and deepen our industry base and openly welcome new investors, both local and foreign. We will do our best to make it easy and inexpensive for you to register your business and get established and we will work energetically to provide a stable and predictable business environment. I look forward to working with new investors to help expand their businesses and grow our dynamic province. Sincerely, H.E Kham Phoeun Governor, Province of Kratie Kratie 2 Investment Profi le National Strengths National Strengths Wages in the garment industry 3 Country Hourly wage rate (US$) Over the last decade, Cambodia has emerged as a vibrant and Cambodia 0.33 robust regional player with many of the underlying attributes necessary for successful business development and growth. China 0.88a/0.66b Pakistan 0.41 Open for Business India 0.38 • Low corporate taxes – 20% tax on corporate profi ts (5 Indonesia 0.30 years carry forward of losses). Bangladesh 0.39 • No foreign ownership restrictions. Cambodia allows joint ventures or 100% foreign-owned companies to operate, Spending on primary education as a share of GDP has increased with full rights to import and export almost all types of signifi cantly in Cambodia in recent years, and is now on a par products. with Thailand. The government plans to continue increasing edu- • Equal treatment of all investors. cation spending. • Ranked ahead of China, India, Vietnam and Indonesia for economic freedom.1 Strategic Regional Location • No price controls on any products or services. Cambodia is ideally located in the heart of the most dynamic • No foreign exchange controls or restrictions on convert- region in the world. Nestled between Thailand and Vietnam, ibility. Cambodia is part of the Greater Mekong Sub-Region’s South- • No restriction on capital repatriation. ern Economic Corridor stretching from Ho Chi Minh City • WTO and ASEAN membership. to Bangkok. • No quantitative trade restrictions; falling tariff barriers. Cambodia has duty-free and quota access to major world Given its strategic position, Cambodia has enjoyed signifi cant markets (such as the United States, European Union, Japan international support in building its transport infrastructure to and many ASEAN members). facilitate trade within the country and with its neighbors. As a • Provincial governments have authority to approve result, trade with Vietnam and Thailand is growing rapidly. investments under US$2 million to fast-track business development start-up. “Cambodia is fully open for business and the Royal Government of Cambodia will try its best to guaran- tee a favourable environment and the success of every enterprise in Cambodia.” - H.E. Samdech Hun Sen, Prime Minister of Cambodia Inexpensive Workforce Compared to many of its regional competitors, Cambodia en- joys relatively low wage rates, making it an attractive destination “You’ve got two of the biggest cities in Asia on either for labor-intensive industry. side of you. You’ve got 15 million people in Bangkok Over recent years, Cambodia’s labor force has grown by and 8 million people in Ho Chi Minh City, and things over 50%, more than double the rate in any other ASEAN are increasingly happening between the two.” 2 country. And with a very young population (half are under 20), - Edward Hopkins, CB Richard Ellis Group Inc. this labor force growth will continue. 1.Heritage Foundation, Index of Economic Freedom, 2008. http://www. 3. Note: a) coastal areas; b) non-coastal heritage.org/index/ Source: O. Bargawi, ‘Cambodia’s Garment Industry – Origins and Future 2.ILO, ‘Labour and Social Trends in ASEAN 2007 - Integration, Challenges Prospects’, Overseas Development Institute, 2005. and Opportunities’, 2007. Kratie 3 Investment Profi le Why Kratie? Why Kratie? In addition, renovation on National Road #7 was completed in April 2008. It runs from Kratie to Kampong Cham. Traffi c 1. Location – close to both Phnom Penh and Vietnam volumes on the road have increased by over 350% since 1997. This road is part of the core ASEAN road network, and connects Kratie is just a 4 hour drive from Phnom Penh, the country’s land-locked Laos to the port of Sihanoukville. It will long serve largest market, and only 1.5 hours from Vietnam. to link Kratie businesses with their core markets. The close proximity and shared border with Vietnam provides River effi cient access to a large market for the province’s agricultural production. Trade across the border, in both directions, is active Kratie is situated along the Mekong River, which fl ows from Laos and growing. through north-eastern Cambodia and into Vietnam. Kratie’s port is 220km upstream from Phnom Penh. Ideal for travel and bulk Cambodia - Kratie Province product transportation, the river has long been a key element of Travel Time by Road from Provincial Capital the province’s identity and transportation network. Railway 17.5 hrs LAOS The Royal Government of Cambodia will build a railway line Bangkok Poipet 11.5 hrs Siem Reap Tbeng Meanchey Lumphat THAILAND Stung Treng from Kandal, through the Snoul district in Kratie, to Loc Nihn rs 2.5 hrs Battambang 8.5 h in Vietnam. This will further improve transportation and trade CAMBODIA between Kratie and Vietnam. Pursat Kratie Senmonorom 2.5 hrs 2. Gateway to the north-east - Cambodia’s next Kampong 1.5 hrs 4.5 h rs Cham ‘economic pole’ Koh Kong Phnom Penh 1.5 hrs VIETNAM Gulf of Thailand Kampong Kandal Speus hr Located on the Mekong River, Kratie is the gateway to Cambo- Legend 5 Svay Rieng Bavet 8. Takeo dia’s beautiful north-east region, an area of mountains, forests, Ho Chi Minh City Capital Kampot 7.5 hrs waterfalls, lakes, wildlife parks and minority hill tribes. Cities Sihanoukville South China Sea Province This area of Cambodia borders Vietnam and Laos. The region Border Boundaries are not authoritative DAI/GIS April 2008 has a population of nearly 600,000; most living close to major Arrows indicate estimated travel time by road in hours waterways. Driving times to Bangkok and Ho Chi Minh City do not include border crossing time The Royal Government of Cambodia has designated this region The province has excellent transport infrastructure, serving a as “Cambodia’s fourth economic pole” (after Phnom Penh, Siem number of areas of Cambodia via different transport modes. Reap and Sihanoukville) because of its vast potential of natural resources and eco-tourism4. Road Given its unique geographic position, Kratie is the business and tourist hub for the north-east region of Cambodia, and for travel Kratie is served by four national roads, running for 300km, which to and from Laos. serve to cover the province and take consumers and businesses to all corners of the country. Kratie is also a supplier of inputs to agricultural production and other industries to the other north-east provinces of Stung Our roads are in excellent condition and allow fast access from Treng, Mondulkiri and Rattanakiri. Phnom Penh and Vietnam to Kratie, and onward to Stung Treng and Mondulkiri. New businesses are springing up in Kratie as 3. Thriving Tourism a result. Kratie’s natural attractions make it the major eco-tourism The newly expanded and re-surfaced National Road #73 reduces destination in Cambodia. the driving distance from Phnom Penh by 80km - dramatically reducing travel times. 4 Speech by H.E. Samdech Hun Sun, Prime Minister of Cambodia, 29 April 2008, as reported by The Mekong Times, Issue 57, 30 April 2008.
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    0 50 miles THAILAND LAOS The Dragon’s Tail 0 50 km Samrong Anlong Veng Cheom Ksan ODDAR MEANCHEY Siempang Tbeng Virachey National Park BANTEAY Meanchey MEANCHEY STUNG Banlung TRENG Poipet SIEM REAP PREAH VIHEAR g RATANAKKIRI n a o Sisophon Boeung Per k e Angkor Wat r Stung Treng Lumphat Phnom Wildlife Sanctuary e A M Malai t Siem Reap s e r Battambang o F Tonle g Sandan n PAILIN BATTAMBANG Sap a L KAMPONG THOM y e Pailin r MONDULKIRI Moung P KRATIE Roessei Kampong Thom Samlaut Kratie Sen Monorom Pursat Peam Koh Snar Kampong PURSAT Chhnang KAMPONG KAMPONG CHAM Snoul Ca CHHNANG Kampong Cham rd a Kang Meas Memot m o m KAMPONG Koh Kong M SPEU KANDAL o Phnom Penh u n Prey Veng KOH KONG ta PREY VIET NAM in Kampong Takhmao s VENG Speu SVAY RIENG Sre Ambel Neak Svay Rieng TAKEO Loeung KAMPOT Bavet Takeo PREAH SIHANOUK Bokor National capital Kampot M ek Provincial capital on Sihanoukville Kep g The Parrot’s (Kampong Som) KEP Beak Town, village Provincial border Major road Gulf of Thailand Rail Map of Cambodia. xvi 1 “Brother Number One”: Pol Pot, Cambodia’s Robespierre and the architect of the Khmer Rouge revolution, photographed shortly after taking power in Phnom Penh in April 1975. 2 Women toil on a communal worksite in Democratic Kampuchea. 3 Supporters of the Vietnamese-backed Kampuchean United Front for National Salvation celebrate the collapse of Democratic Kampuchea in Chhbar Ampov, Phnom Penh, on January 25, 1979. The sign in the photo reads, “Bravo, Cambodia is fully liberated!” 4 The new masters of Cambodia: Heng Samrin (center) and Pen Sovan (left) greet a state media delegation from the Mongolian People’s Republic at Pochentong International Airport on March 15, 1979.
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