By Hong-Phong B. Pho

After a decade of devastating warfare in the 1970s and another of international isolation and neglect in the 1980s, Cambodia is beginning to rejoin the world community with the signing of the United Nations-sponsored Paris peace agreement in October 1991. The agreement calls for the largest and most ambitious U.N. peace-keeping operation ever, including U.N. administration of the country leading up to general elections in spring 1993. Until President Bush lifted the U.S. economic embargo in January, there was virtually no U.S.-Cambodia trade.

The U.N. Transitional Authority in Cambodia (UNTAC) is expected to arrive in Cambodia by early to mid-April. A budget of $1.9 billion, of which the United States is responsible for more than 30 percent, has been proposed for UNTAC's operations. In addition, $900 million will be drawn from voluntary contributions for the repatriation and resettlement of Cambodian refugees on the Thai border and the internally displaced. This money will find its way into the Cambodian economy, one of the poorest economies in the world.

UNTAC deployment will represent the most significant source of financial resources for Cambodia for the near future. U.S. firms can expect opportunities to become available for a wide range of goods and services required by the U.N. for its peace-keeping and refugee resettlement operations. Being involved in the early crucial phase of business development will position American companies well vis-a-vis the competition for the future reconstruction phase. Longer-term opportunities can be expected from multilateral, bilateral, and international financial institutions' projects for the reconstruction and development of Cambodia.

While there is a Foreign Investment Code, a business person may have to contend with very poor financial and legal infrastructure, bureaucratic red tape, and political instability, at least until general elections in 1993.

On the other hand, Cambodia has many opportunities to offer pioneering entrepreneurs, including rich but untapped natural resources. Some see Cambodia as a desirable economic partner where Japanese influence is still less pervasive than in other Southeast Asian countries. Others look at Cambodia as their gateway to post-embargo Vietnam. Many are exploring potential opportunities.

For additional information, contact the Commerce Department Desk Officer on (202) 482-3875.

Source: International Trade Administration, Business America Magazine