Cambodia leader allays fears of Asia rice cartel

Phnom Penh—Cambodian Prime Minister Hun Sen Monday said that a proposed OPEC-style rice cartel in Southeast Asia would ensure global food security, rejecting concerns that such an economic bloc would aggravate hunger and poverty.

Thai Prime Minister Samak Sundaravej last week said that his country had agreed in principle to the formation of a rice price-fixing cartel with Burma (Myanmar), Laos, Vietnam and Cambodia as the price of the staple grain continued to skyrocket.

The grouping of the five nations along the Mekong River would be similar to the Organization of Petroleum Exporting Countries (OPEC) and would be called the Organization of Rice Exporting Countries (OREC).

During a university graduation ceremony in Phnom Penh on Monday, Hun Sen said that the proposed rice cartel would not try to manipulate markets but would guarantee the adequate supply of the staple.

“We will not only ensure food security in each of our own countries, but will help solve the entire problem of (food) shortages across the region and the world,” he said.

“When there are shortages, we will not stockpile the rice or increase prices . . . We really want to help ensure food security,” he added.

The Asian Development Bank (ADB) has come out against the planned cartel while Philippine officials have blasted the proposed cartel as “antipoor,” saying it would only exacerbate hunger and poverty.

Hun Sen urged other Southeast Asian nations, including the Philippines, not to worry about the cartel.

“The formation of the organization is not meant to strangle the throats of countries that do not have rice,” he said.

Back into poverty

The five proposed members of the cartel, which plans to export up to 15 million tons of rice a year, will discuss the formation of the economic bloc at regional talks in October, Hun Sen said.

Hun Sen sought to allay fears of a rice cartel after Asian leaders warned at the ADB annual meeting in Madrid that soaring food prices could push millions of people in Asia back into poverty and spark social unrest.

Japanese Finance Minister Fukushiro Nukaga said the surge in rice prices would hit Asian countries hard and cited the need for safety nets for the poorest segment of the population.

Prices for the benchmark Thai variety of rice, a food stable across much of Asia, have tripled to $1,000 a ton the past four months.

Meat prices have also risen by 60 percent in Bangladesh in the year ending in March, and by 45 percent in Cambodia and 30 percent in the Philippines, according to an ADB report issued on Saturday.

The rise in global food prices has sparked riots last month in Egypt and Haiti, protests in other countries and restrictions on food exports in Brazil, Vietnam, India and Egypt.

Indian Finance Secretary Subba Rao said a 20-percent rise in food prices could force 100 million people into extreme poverty.

“In many countries, including in Asia, that will mean the undoing of gains in poverty reduction achieved during the past years of growth,” he said.

The Indian government, which is facing a general election by May 2009, has banned the export of staple foods like rice and lentils and cut customs duties on other items in a bid to ease price pressures.

Rao said his government was spending the equivalent of about 2.0 percent of gross domestic product per year on subsidies for food, fertilizer and energy to help offset the impact of rising prices on the poor.

Burden on state budgets

But Nukaga warned that export restrictions could lead to higher prices while food subsidies to help the poor deal with surging prices could place a tremendous burden on state budgets.

“Export restrictions will not only distort the proper functioning of markets in price formation but further exacerbate the price hikes in international markets,” he said.

“Subsidies that are intended to keep food prices under control have the risk of becoming a significant burden to budgets and are not sustainable over time.”

Food subsidies in Bangladesh, one of the poorest nations in Asia, are estimated to double in the current fiscal year and reach over $1.5 billion in the current fiscal year.

The ADB, which estimates one billion people in Asia are seriously affected by soaring food prices, announced on the opening day of its four-day annual meeting in Madrid that it would provide a sizeable amount in soft loans to help Asian countries subsidize the price of food staples for the poor.

The ADB also announced it would provide $2 billion in loans in 2008 and 2009 to finance agriculture infrastructure projects such as irrigation systems and rural roads aimed at boosting farm output in the region.

Rising use of biofuels, trade restrictions, increased demand from Asia to serve changing diets, poor harvests and increasing transport costs have all been blamed for skyrocketing food prices. AFP



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Siam Cement May Spend 6 Billion Baht on Second Cambodia Factory

By Anuchit Nguyen

May 6 (Bloomberg) -- Siam Cement Pcl, Thailand's biggest producer, may spend as much as 6 billion baht ($189 million) to build a second factory in neighboring Cambodia to triple its production capacity there.

The planned factory, twice as big as the first plant, will increase the Bangkok-based company's capacity in Cambodia to 2.55 million tons a year, company President Kan Trakulhoon said in a May 2 interview. A feasibility study will be completed this year.

Siam Cement, controlled by the king's asset management arm, is building cement and paper plants in countries including Vietnam and the Philippines to counter slowing domestic sales. The company is also expanding investments in petrochemicals to benefit from oil reserves in the region.

``We have to import cement for our customers in Cambodia, as the first factory, which started operations in January, is already running at full capacity,'' Kan said. ``There's a very strong outlook for cement sales in Cambodia because of infrastructure development and economic growth.''

BHP Billiton Ltd., the world's largest miner, and Chevron Corp. are investing in Cambodia to tap the nation's natural reserves of copper and oil. Developers such as Club Mediterranee SA and Starwood Hotels & Resorts Worldwide Inc. are building hotels and adding rooms as more tourists visit ancient temples such as Angkor Wat.

Cambodia's economy expanded 9.6 percent last year and 10.8 percent in 2006, according to the International Monetary Fund's data on its Web site.

Shares of Siam Cement rose 1.9 percent to 212 baht on May 2 in Bangkok. Markets were shut yesterday for a public holiday.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net .

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Lauwaert dies in Cambodia; Fears for Cleghorn

Australian Bart Lauwaert 41, dies in Cambodian hellhole; Fears for New Zealander Graham Cleghorn

Cambodia is desperately poor. A few short years ago, there was no justice, and millions were killed. Today there is a fledgling justice system, but corruption is rife.

South East Asian countries have also been heavens for paedophiles. It was a reputation that Cambodians, understandably, did not want. In 2003 Cambodia launched an anti-paedophilia campaign was launched in a bid to shake off its unsavoury reputation In this context, foreign men accused of sexual offences are easy targets of bribery and corruption.

In 2002-3 Australians Bart Lauwaert and Clint Betteridge, and New Zealander Graham Cleghorn, were convicted of sexual offences in Cambodia, and sentenced to 20 years jail. Betteridge managed to return to Australia where he was held in custody awaiting the Cambodian Appeal Courts process.

All three men claim that they were victims of a scam operated by the Cambodian Women Crisis Centre, and that they did not receive fair trials.

Following the failure of Graham Cleghorn's last appeal, New Zealand lawyer Greg King said: "I have to say that we are all totally devastated at the outcome of the appeal and still firmly believe that Graham has not had a fair and proper hearing in to his case."

Cleghorn was tried and convicted with no cross examination of complainants. Defence witnesses were disallowed. He had no translator to assist him at appeal. A second appeal was held in secret and Cleghorn was not even advised. In another final appeal that lasted three hours, defence witnesses were again not called. These witnesses included girls that Cleghorn was supposedly guilty of abusing, who were prepared to testify the abuse did not happen.

The appeal of the Australians was equally unfair. Despite all the complainants retracting their allegations, the Cambodian Appeals Court upheld the convictions. At that point the Australian Government refused to deport Clint Betteridge to Cambodia to serve his sentence. Instead on the same day it released him in Australia as a free man. Today, Clint is alive and Bart is dead.

There is an urgent need to return Graham Cleghorn home to New Zealand. A Cambodian jail is a life-threatening experience. It has proved to be fatal for a 41 year old Australian. Graham is aged over 60. His health has deteriorated significantly since he was first arrested in October 2003.

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