Cambodia's bourse plans reflect changing fortunes

PHNOM PENH, June 7 (Reuters) - Cambodia plans to launch a stock market in 2009, Prime Minister Hun Sen said on Thursday, another sign of the southeast Asian nation's accelerating recovery from the devastation of Pol Pot's "Killing Fields".

Hun Sen, a former Khmer Rouge officer who lost an eye in the final assault on Phnom Penh in 1975 by the ultra-Maoist guerrillas, said his government was already drawing up the laws needed to establish a bourse.

"With the start of a stock market, Cambodian people will be able to collect their savings, which can then be used for long-term investment," he told a symposium hosted by the Asian Development Bank (ADB).

Central bank governor Chea Chanto said the laws would be approved "soon".

Per capita income rose to $500 in 2006, Hun Sen said, double 1994 levels when the country was regarded as one of Asia's most desperate basket cases, beset by lingering civil war, a growing AIDS epidemic and defunct economy.

However, growth has taken off in the last few years due to relative political stability under Hun Sen, who has brushed aside accusations of authoritarianism during his two decades in charge.

The garment and tourism industries have mushroomed, with much of the expansion financed by foreign investors, and the new office buildings springing up across the once-sleepy French colonial capital are testament to a roaring construction sector.

The last two rice harvests have also broken records.

The economy grew 10.4 percent last year, according to the International Monetary Fund (IMF), which expects growth of 9 percent in 2007 and 7.5-8 percent in 2008, making it one of the world's fastest-growing economies, albeit worth only $7 billion.

In a big push to banish the legacy of Pol Pot's "Year Zero" revolution and its estimated 1.7 million victims, Phnom Penh has obtained B+ and B2 credit ratings from S&P and Moodys respectively this year.

The ratings should help pull in more foreign direct investment (FDI), as well as encourage commercial lending by the blossoming banking sector, which now boasts 20 institutions, IMF Asia and Pacific adviser Jeremy Carter said this week.

"You have new banks, small banks which have just started to grow rapidly. They are taking in a lot of deposits and they are issuing a lot of new loans," Carter told news conference.

FDI in 2006 was $4 billion -- another record -- and last month a South Korean consortium announced plans to build a $2 billion residential, commercial and cultural complex on the northern outskirts of the capital.

Hun Sen, whose government still relies on foreign aid for 60 percent of its revenues, said on Thursday foreign reserves rose to over $1 billion last year from just $100 million in 1994.