Opening Speech By
KINGDOM OF CAMBODIA
Nation Religion King
Opening Speech by
Deputy Prime Minister Keat Chhon, Minister of Economy and Finance
and Chairman of the Economic and Financial Policy Committee
National Workshop on
“Financial Sector Development Strategy 2011-2020”
Phnom Penh Capital, July 19, 2011
1. Today I am very pleased to have the opportunity to preside over the Opening Ceremony of the National Workshop on “Financial Sector Development Strategy 2011-2020”. Being the Chairman of the Economic and Financial Policy Committee, I would like to be with Excellency Chea Chanto, Governor of the National Bank of Cambodia and Chairman of the Steering Committee on Financial Sector Development to warmly welcome the solemn participation of your Excellencies, Madams, Ladies and Gentlemen coming from the Legislative and Executive Branches of the Royal Government of Cambodia,Representatives from Embassies, Development Partnersas well asAcademicInstitutions and the Private Sector,includingBanking and FinancialInstitutions, and from all relevant business circleat this remarkable gathering today. Allow me to highly appreciate The Technical Working Group led by MEF, NBC, MOC andSECC for their active synergy and close cooperation withthe ExpertsfromThe Asian Development Bank in developing “The Draftof the Financial Sector Development Strategy 2011-2020” that we all have been waiting for discussion later on. Taking this opportunity, I would like to express my profound thanks to The Asian Development Bank for their support in helping to develop the 10-year Financial Sector Development Strategic Plan and their Technical Assistance to implement the Reform of the Sector since 1999 as above mentioned by Excellency PUTU Kamayana.
2. In the implementation of the Financial Sector Development Strategy 2006-2015, the Royal Government has made some achievements, such as the development of legal frameworks and legal documents for strengthening the regulatory roles of the National Bank of Cambodia and insurance regulator for establishing the regulatory body ofthe securities market, securities market together withhuman resource capacity development in the financial sector. At the same time, the Royal Government has worked hard to essentially maintain the financial stability despitethe Crisis of the International Financial Turmoilin 2008 and 2009that threatened Cambodia and a number of developed countries in the region. That wasdue to the fact that the Royal Government had takentimely prudential measures and was able to effectively maintain financial stability through risk management. As mentioned in thespeeches by Excellency Governor Chea Chantoas well as Excellency PUTU Kamayanathatin the last decade Cambodian financial sector, especially bankinghas developed and standing firmly.
3. These successes have resulted in quick expansion of the scope of the sector with high speed of diversification and of larger scale. At the same time, the non-banking sector, including insurance, securities, and pension is also progressing faster than expected.
4. Even though, there were many positive results as mentioned above, some negative aspects remained to be improved, such as inconsistency between the Law on Financial Leasing andCivil Code and the Law on Secured Transactions. Therefore, The Economic and Financial Policy Committee has agreed with the Steering Committee of Financial Sector Development that updating “The Financial Sector Development Strategy 2006-2015” to “The Financial Sector Development Strategy 2011-2020”is a must so as to respond to the necessary, reasonable, and overwhelming needs of the Development of the Financial Sector in Cambodia.
5. I would also like to recall that apart from the above thinking, the Royal Government has launched Public Financial Reform Program with the objectives to build Budget Credibility, Financial Accountability, Program Budgeting, and Performance Accountability. Of this, the reform hascome up with a Strategy for effective management of public debts, strengthening good governance, and financial risk management, and so on.
6. In order to make “The Financial Sector Development Strategy 2011-2020” practical and appropriately responsive and timely to all the possible challenges that might take place in the future, allow me to share my comments as follows:
Firstly, The Royal Government recently launched the Securities Market, within the Cambodian Financial System on 11th July this year. This would require each actor in the Banking Sector, Insurance, and Securities Market to have very active cross-cutting inter-relation in the whole Financial System. To ensure the stability of the Financial Sector and the essential cross sector roles of the above actors, justto mention a few, the 3 Financial Regulators shall closely cooperate with each other and to have specific mechanism for mutual cooperation, putting in place prudential regulations and joint oversight or to share information on latest development to one another. Currently, MEF is the Regulator on Financial Sector that is non-banking, including the sectors of insurance, securities, pension, and collateral transfer. Whereas the National Bank of Cambodia plays the role as the Regulator of Banking Institutions. Therefore, this document shall reflect the needs of the current Royal Government in dividing the roles of the two Regulators, but need to be closely coordinated under the same roof of the Royal Government.
Secondly, this strategic document shall move in tandem with the preparation of ASEAN Financial Sector Integration Roadmap that the Head of State and Heads of ASEAN Governments decided to establish ASEAN Economic Community.
Thirdly, to strengthen the capacity of the Regulators and all Financial Operators with Code of Ethics and be highly professional and that this recommendation has always been addressed by Samdech Akka Moha Sena Padei Techo Hun Sen in almost all of his fora.Apart from the 3 points above, there are still many other details to be discussed further at length in this Workshop.
7. Based on the experience gained fromthe development of FinancialSector Development Plan 2001-2010 and the implementation of theFinancial Development Strategy 2006-2015, I believe that even though we have the Financial Sector Development Strategy 2011-2020 with properarchitecture, inpractice, we will surely meet manyproblems caused by internal and external risks. To address these challenges, the only thing we need to do is to overcome risk management. Only then, we can avoid disasters like we did in the past under the Financial Storm in 2008 and 2009. I proposeour national workshop to pay high attention on the general risk management,on the one hand and financial sector risk management, on the other.
8. I hope that the idea that I raised above would be of interest to be considered as inputs into “The Financial Sector Development Strategy 2011-2020”. I would encourage Excellencies, Madams, Ladies and Gentlemen, Representatives from the Legislative Branch, State institutions, Development Partners, Private Sector, and Academic Institutions who are here today to actively discuss, so that the Technical Working Group on Financial Sector Development led by Excellency Ros Silva and the Financial Industry Department being the Secretariatcan obtain good inputs to improve this Document and to further analyze with ADB Experts then, submit it to the Steering Committee on Financial Sector Development and then submit to The Economic and Financial Policy Committee for final reviewbefore sending to the Council of Minister for consideration and adoption.
9. Before ending, once again I would like to express my thanks to Excellencies, Madams, Ladies and Gentlemen for spending your valuable time to attend this Workshop with a high turnout.I also would like to express my special thanks to Mr. Sam TUKUAFU, ADB Mission Chief, for his active support in the preparation of the Financial Sector Development Strategy 2011-2020 and the assistance for the organization of the Workshop.
I would also like to express my deep thanks to the sector officials from MEF, NBC, MOC, and SECC together with technocrats fromother concerned institutions in making their efforts to organize this remarkable Workshop today. If there is no such participatory effort, this Workshop would not be possible.Finally,may I wish the whole body of the Workshop a Success and together with our Distinguished Guests and the Whole Ceremony I would like to declare the Opening of the National Workshop on “Financial Sector Development Strategy 2011-2020” from now on.
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