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Business Insight

Paving the Way for Growth

Kyoko Fujita

Many companies doing business in Southeast Asia are frustrated by the poor quality of roads, bridges and ports. Now, officials from ASEAN countries are working with Japan to solve the problem.

Hundreds of trucks clog the streets of this Cambodian city. Drivers want to deliver their goods quickly. But there's one bottleneck where they can do nothing but wait.

"I'm here at a ferry landing on the Mekong river just outside Phnom Penh. Dozens of cars and trucks queued here to get on to the ferries and go to the other side. It's not uncommon for drivers to wait for hours."
Kyoko Fujita

There is no bridge across the Mekong River here. Drivers sometimes have to wait 7 hours to board a ferry during peak season.

Wasting time crossing the river is not simply a problem for the locals. It affects people throughout the region, as it disrupts the flow of traffic on a highway network that runs through three countries. Improved transportation here would make it a lot easier to do business on a wider scale.

But long waiting times for drivers may soon be... a thing of the past. Last month, workers connected the 2 halves of the bridge. It'll open to traffic in April.

The bridge will allow drivers to travel from Bangkok all the way to Ho Chi Minh City without having to stop to take a ferry. The number of vehicles crossing the Mekong each day is expected to more than triple to 17,000.

Japan is footing a big part of the bill. Japanese business people say spanning the Mekong will make it easier for them to operate in the region.

"Japanese companies moving into this area will continue to expand their activities. We want to build a win-win relationship with the ASEAN economic community."
Kazuyuki Nakane / Japanese Parliamentary Vice-Minister for Foreign Affairs

"We think this connection will help improve the Cambodian economy. It facilitates our trade among our people, among our region in the country, and among the region in the neighboring country."
Tauch Chankosal / Cambodian Secretary of State, Ministry of Public Works and Transport

Officials of the Cambodian and Vietnamese governments are also working to streamline customs procedures.

One night last month, the officials conducted a trial customs clearance for a vessel going down the Mekong River from Phnom Penh to Vietnam. This route accounts for most of the cargo that Cambodia exports to Vietnam. But crews of ships that arrive after 5:30 in the evening now have to wait until the next morning when the customs office reopens.

Japanese business people have been calling for improvements. Government officials from Japan took part in the nighttime trial run.

Officials from Cambodia, Vietnam and Japan are discussing how the 2 Southeast Asian nations can introduce a system that's open for trade... around-the-clock.

"Mekong River is very important for Cambodia for moving goods, commodities, and people. By having a clear picture of what the problems are, we can put the correct counter measures."
Hiek Phirun / Deputy Director General, Phnom Penh Autonomous Port

"If both countries adopt a 24-hour cross-border service, I think it will also greatly benefit foreign companies doing business in the ASEAN region."
Takashi Shimada / Principal Researcher, OCDI

Business people see many opportunities in Cambodia. But they say government officials need to do a lot more if the country is to fulfill its potential.

What is the key to accelerating growth?

ASEAN economies have been enjoying economic growth of around 5%. Government officials think roads and railways are vital to boost trade and attract foreign investment.

Workers are building several international highways. Two connect Myanmar and Vietnam. Another one connects Hanoi and Bangkok via a route that runs through China, Myanmar and Thailand. A railway connecting Singapore and China is under construction.

What kind of problems need to be solved?

I think government services must be streamlined. For example, customs offices in Cambodia and Vietnam are nearly 2 kilometers apart. When I visited, ship crews had to visit both to get documents stamped, which takes hours. Business people think with trade growing between all these countries, speeding up custom procedures is crucial.

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