Cambodia: Education Minister Rails Against Lack Of Funding

By Ben Woods and Chin Chan - February 1, 2013

Education Minister Im Sethy on Wednesday accused the Ministry of Economy and Finance of consist­ently failing to disburse sufficient funds to the education sector, for­cing it to rely heavily on foreign aid to achieve reforms. 

Eschewing a prepared speech during an education workshop hosted by the European Union (E.U.) at the Cambodiana Hotel in Phnom Penh on Wednesday, Mr. Sethy said the Ministry of Edu­cation has received a smaller proportion of the government’s total budget every year since 2007—funds es­sential to increasing student enrollment and raising tea­ch­­ers’ low salaries.

“To be blunt…now the proportion [of education spending] is decreasing, so the Ministry of Econ­omy and Finance needs to take this into account,” Mr. Sethy said in a speech to the workshop.

“The Finance Ministry doesn’t know how to make policy at all,” the minister continued, turning from the crowd and angrily pointing a finger at Chou Kimleng, un­der­secretary of state at the Fi­nance Ministry, who was seated on­stage near Mr. Sethy and who had just given the opening re­marks at the workshop.

“As we can see, reform can’t be deadlocked by a deadlocked policy. It needs to be updated and improved,” Mr. Sethy continued.

Using as an example the construction of a new building at the National Institute of Education, Mr. Sethy said that when the building’s expense came in over budget, the Finance Min­ist­ry re­fused to give them more mon­­ey. He added that four letters he personally sent to the ministry on the subject went unanswered.

“But I’m thankful to our partner [the E.U.] that helped us because sometimes Cambodians don’t listen to each other. I’m thankful to our partner, who stuck with us and saw the issue and resolved it,” Mr. Sethy said, going on to ex­press his gratitude to the E.U. for spending 36 million euros, or about $48.7 million, on Cambo­di­an education initiatives to date.

E.U. Ambassador Jean-Fran­cois Cautain—who at the workshop pledged an additional 37.2 million euros, or about $50.3 million, to Cambodia’s education sector for 2014 to 2016—said the E.U.’s support for the education sector should merely supplement, not replace, proper funding by the government.

“The support we are providing at the E.U. should not substitute a lack of support by the government…. It should be the other way around,” Ambassador Cau­tain said on the sidelines of the workshop.

“It is something we say to the government behind closed doors, but also in public,” he added. “On that, we are fully aligned with the minister [of education].”

Mr. Cautain added that while government funding for education has risen over the past few years, this increase is not proportional to the growth in total state expenditures.

“What we have seen the last years is that, even if in nominal terms, the budget for education has increased, the percentage which is allocated [to] education of the total government budget is decreasing, so that is a concern for us,” he said.

“Usually, if you look at other countries, a reasonable share would be around 20 percent of the total budget of the government. I think the last year, we were around 16 percent, going down from 19, 18” percent in previous years, he added.

According to official figures, the government allocated about $280 million to education for this year, roughly 9.1 percent of the $3.1 billion total budget. In 2012, funding for education was $245 million, or about 9.4 percent of the budget.

In contrast, some $400 million has been apportioned to the de­fense and security sectors this year, which amounts to about 13 percent of all spending and a 17.3 percent increase over last year’s allocation, with $245 million going to the Defense Ministry alone.

But it was not always this way, as Mr. Sethy noted.

In 2007, $132.7 million was set aside for education, about 11.5 percent of that year’s total budget and an increase of 24 percent over the year before.

Officials at the Finance Ministry declined to comment.

UNITED STATES: ‘Bill of rights’ to protect online student interests

The Chronicle of Higher Education26 January 2013 Issue No:256

 

By Steve Kolowich

 

A dozen educators met last month in Palo Alto, Calif., to discuss the future of higher education. They had been convened at the epicenter of technological innovation in higher education by Sebastian Thrun, a pioneer of massive open online courses, and yet the task at hand had nothing to do with software or strategy. It had to do with citizenship.

The Philadelphia Convention, it was not. But the 12 educators, many of them well known in online-education circles, did manage to draft a document that they hope will serve as a philosophical framework for protecting the interests of students as online education, propelled and complicated by the rise of MOOCs, hurtles into a new phase.

Called "A Bill of Rights and Principles for Learning in the Digital Age," the document proposes a set of "inalienable rights" that the authors say students and their advocates should demand from institutions and companies that offer online courses and technology tools.

Those rights should include access and privacy, along with access to information about the financial models of institutions and companies offering online courses, write the authors.

Mr. Thrun, the founder of the MOOC provider Udacity, said his involvement in drafting the document does not amount to a pledge or endorsement by his company. And despite the legislative reference in the document's title, the "bill of rights" does not have regulatory teeth.

Still, its authors hope the document will frame the standards and expectations that guide universities and their constituents as online tools and platforms become part and parcel of traditional higher education.

 

Defining Terms

Online education has been around for decades, but the excitement surrounding MOOCs and the blending of business interests with traditional, mission-driven higher education threatens to obscure educators' obligations to students, said Cathy Davidson, an English professor at Duke University who helped write the document.
"The problem is, it's been such a short time span and there's so much hype around MOOCs, and some of the terms and agreements around MOOCs are so ill defined and changing and amorphous that no one knows what the business models are" or what rights students have as consumers, Ms. Davidson said.
"The idea is to have a larger conversation about this so that MOOCs don't become the Facebook or Instagram of higher education—where you sign up for some free service and it turns out that you're the product being sold," she said.

The authors of the document express particular concern about the opportunity for online providers to collect and profit from data and content submitted by users. "Students have a right to know how data collected about their participation in the online system will be used by the organization and made available to others," they write. "The provider should offer clear explanations of the privacy implications of students' choices."
Students should also own the intellectual-property rights to any content they create by participating in online courses, the authors add. And online providers that offer the promise of some kind of credential or badge for completing coursework should be able to give students some indication of its "authenticity, meaning, and possible recognition by others."

Reorienting the Conversation

The best-known signatory of the "bill of rights" is also perhaps its most surprising. To the extent that the document regards for-profit purveyors of online education as a potential threat to students' rights, Mr. Thrun would seem to be the subject of the authors' demands, in addition to being an author himself.

The Udacity founder said he had no objection to that. He said he wanted to reorient the conversation about MOOCs to focus on pedagogy rather than economics.

"It's time for people to speak up [about] what the pedagogical objective really is, because we are trapped in a world that is excited about the enrollment numbers" primarily, Mr. Thrun said in an interview.
Mr. Thrun, whose company makes money by helping companies recruit students who have opted into Udacity's job-placement program, said he hoped the proposed bill of rights would put pressure on the education-services industry, but also on traditional colleges and universities. When it comes to how they determine prices for online courses and where students' money goes, he said, some institutions are less than forthcoming.

"There's a whole bunch of universities that use online education as a cash cow," said Mr. Thrun. "One of the questions that has arisen is that, if you can actually save money online, can you pass along those savings to the student?"

Andrew Ng, a co-founder of Coursera, another for-profit MOOC provider, said he too was pleased by the idea of articulating and respecting the rights of online students.
"The idea of listing some of the rights we'd like to confer to students is a good one," he said via e-mail. "Fortunately, today's MOOC movement is already led by many of the world's top universities, which are used to serving students and respecting students' rights."
 

UNITED KINGDOM: PM backs fraud-reducing student application system

David Jobbins26 January 2013 Issue No:256

 

 British prime minister David Cameron has intervened to help a business management graduate, who has devised an automated application system for educational agents and international students, to approach the UK Border Agency (UKBA) at the right level.

Dawood Fard (25) came up with the idea for the system, Centurus One, during a business management masters course at the University of Central Lancashire (UCLan).

While on a business experience placement working in Delhi, he witnessed the bureaucratic process that international students face when applying to study in the UK.

“The day after I came back from India I got about 20 people together and we thrashed out ideas,” Fard said. “The current process is tedious, slow, inflexible and expensive. We have developed a revolutionary system that is easy to use, transparent and not at all intimidating.

“We can reduce the amount of administrative time from weeks to just minutes, streamlining the management of international recruitment.”

University, college and English language school applicants will be able to use the system to track and process applications for multiple institutions online on a single platform.

The document trail will help prevent abuse of the visa process and should reduce administrative errors, helping genuine students find a place, Fard says.

The impact of tougher visa regulations on recruitment of international students is a matter of huge concern for UK universities.

Institutions using Centurus pay a small fee per student enrolled, with a monthly service fee, and can process as many applications as they wish.

Students and agents pay nothing and can save money through a built-in payment system provided through the Uni-Pay system. Payments processed through Uni-Pay’s network of local banks and credit card platforms give better exchange rates for students and allow institutions to avoid bank commission charges, which currently cost them an estimated £35 million (US$55 million) a year.

During a visit by the prime minister to UCLan, Fard got a commitment from Cameron that he would be able to talk to the appropriate people at UKBA about ways Centurus can help institutions comply with visa processing requirements.

Centurus is only in its infancy but is already in use at several colleges and at Glyndwr University’s London campus, where admissions staff say it has already reduced the number of queries from students about the progress of their applications.

INDONESIA: Higher education haunted by corruption – Graft watchdog

Ria Nurdiani25 January 2013 Issue No:256

 

 A graft watchdog in Indonesia has sounded a red alert for the education sector as it recorded some 40 cases of corruption in 2012, causing losses to the state of around Rp139 billion (US$14.4 million).

Corruption was found at all levels of education, from elementary schools to universities, and from local education agencies to the House of Representatives, said the non-profit Indonesia Corruption Watch, or ICW.

According to the group’s latest report, around a third of the country’s entire education budget was misappropriated during procurement of goods and services.

ICW researcher Febri Hendrik said corruption meant that the country’s operating education budget was well below the stated figures, and the misappropriation could affect education quality.

“It could push the quality of our universities below the required standard. Eventually it would have an effect on the quality of our graduates – they will become unqualified graduates,” Febri told University World News.

A recent high-profile case involved a member of the House of Representative’s budget board. Angelina Sondakh, a former beauty queen and singer turned politician, was found guilty of misdirecting the 2010-11 budget for university projects under the Ministry of Education.

She was sentenced on 10 January to four and a half years in prison, ostensibly for accepting US$3.6 in bribes from a construction company.

In its report published this week, ICW pinpointed five types of corruption: fictitious reporting of events, projects or official trips; price mark-ups; extortion; embezzlement; and misuse of funds.

The biggest losses are caused by price mark-ups, where the difference is pocketed by corrupt officials. It is common practice in Indonesia's education institutions, driven in part by lack of transparency in budgeting processes.

“Whenever there's procurement in a university, then there's the possibility for a price mark-up,” Febri told University World News.

According to Febri, procurement of facilities and infrastructure are the most likely to be subject to corrupt practices.

Sondakh, for example, had been responsible for procurement for 16 universities in the states of Sumatra, Java, Bali, Sulawesi, East Nusa Tenggara, Maluku and Papua with projects worth Rp20 and Rp75 billion.

According to the law, procurement proposals for facilities and infrastructure must be submitted to the Ministry of Education by the university, and the ministry submits it to the House of Representatives, where the budget is approved or rejected.

Haris Iskandar, secretary general of higher education in the Ministry of Education, was quoted by local media as saying some House members had already seen through about 16 procurement proposals, when he had not even received them yet.

One of the proposals approved was for Universitas Cendana in East Nusa Tenggara province, he said. When it was proposed, the budget allocation was Rp15 billion. But after discussion in the House, it rose to Rp70 billion.

Haris was questioned as a witness last October, during Sondakh’s trial.

Linked to the Sondakh case, the Attorney’s Office has also charged at least eight senior officials in four universities: Universitas Negeri Jakarta, Universitas Sriwijaya in South Sumatra, Universitas Sultan Ageng Tirtayasa in Banten and Universitas Negeri Malang in East Java.

According to the Attorney’s Office, they were involved in laboratory procurement bidding.

The trial of the provost of Universitas Negeri Jakarta started on 15 January. The trial of the head of administration and finance and two lecturers from Universitas Negeri Malang started last November.

Those named at Universitas Sriwijaya and Universitas Sultan Ageng Tirtayasa have yet to be brought to trial, with pressure groups such as ICW criticising the delays.

Febri said many graft cases were not handled properly, adding: “It is not clear whether police investigations are completed or not. Even when they are completed, the Attorney’s Office often does not start the trial immediately.”

GLOBAL: Internationalisation has corrupted higher education

Roger Y Chao Jr26 January 2013 Issue No:256

 

 Over the past two decades, neoliberal globalisation has opened up trade borders, commoditised the higher education sector and established a global higher education market.

Furthermore, the changing political and economic environment especially after the Cold War resulted in rapid globalisation, technology development and a contraction of borders for trade, labour and academic mobility purposes.

Currently, a global higher education market exists particularly for internationally mobile students and lately for domestic students wishing to take international programmes in their home countries.

This article focuses on the commercialisation of higher education and its role in ushering corruption into higher education.

Corruption in higher education

Corruption in higher education should not only be seen in terms of misuse of research funds, presentation and construction of fraudulent data or inequitable admissions practices.

It should also include micro-level university-related practices in learning, assessment and certification of students and graduates respectively. Grade inflation, sub-standard graduates, and the usage of postgraduate students in teaching and research as free or low-cost assistants form part of the phenomenon of corruption in higher education.

The commercialisation of higher education has made universities into corporations whose primary objective is the profit motive and gaining market share and rankings. This is seen in the design and offering of market-based programmes, practices in assessing and awarding degrees, opening offshore (and domestic) branch campuses, and even offering overseas programmes.

The tensions between universities and key stakeholders – industry, society, governments and students themselves – within an environment of decreasing public sector funding, society’s and industry’s demand for higher education and the rise of a global higher education market, further complicates the matter.

In fact, the demands of the key stakeholders take precedence over traditional university mandates around the betterment of society and the formation of global citizens.

International higher education

The establishment and rapid increase of tuition fees, business enterprise within universities and increased privatisation of higher education show the commercialisation of national higher education systems.

The proliferation of overseas (and even domestic) branch campuses and programmes in (but not limited to) developing nations goes beyond national and regional boundaries, expanding a highly lucrative but increasingly competitive global higher education market across national borders.

What these trends have brought into the higher education sector is an increased competitive environment and the decline of the capacity of universities to function efficiently.

New university standards seem to be characterised by increased student intake, the importance of ranking high on national and global tables, financial sustainability and a short-term focus on meeting industry demands at the expense of quality, relevance and a sense of communal identity and responsibility.

Offshore branch campuses and overseas programmes have followed the money trail to developing nations, charging high tuition fees and granting degrees affiliated to or even awarded by their mother institutions.

Questions about quality, learning, assessment, recognition and awards linger, but the profit motive of offshore branch campuses cannot be denied.

In Hong Kong, degrees from overseas programmes are not recognised (although allowed) by the government, and industry is given the choice to accept or decline recognition. Similarly, local programmes are increasingly offered based on consumer and industry demands.

Short-term demands and contemporary trends dictate university programme offerings based on a profit rationale rather than society’s needs and the long-term skills and competencies required by university graduates to survive and prosper in an ever-changing knowledge-based economy.

These new standards have led to lax admission requirements, a focus on short-term goals and short-term relevance of academic programmes. Furthermore, university practices such as limiting failures have led to grade inflation and the awarding of degrees to sub-standard graduates.

Practices of students assessing lecturers and professors' teaching performance also enhance grade inflation as poor student assessment affects promotion and tenure possibilities. Similarly, university practices of using postgraduate students in teaching, grading, and research worsen the quality of teaching, the students’ learning experience and even the quality of research conducted by these postgraduate students.

In essence, when we disregard the quality of student learning and its outcomes due to the profit motive and the race to the top of the league tables, we have ventured into a new form of corruption in the higher education sector.

Long-term needs

Universities' diminished power and effectiveness is seen in the case of City University of Hong Kong, whose students protested against Hong Kong’s national education plan last September. The students demonstrated just outside the library, an area where silence is a necessity, and even painted the floor of the university with giant white Chinese characters.

In spite of repeated emails and reminders by the university administration, these demonstrations outside the library and other public areas within the university continued for some time and as of 12 January, the giant painted characters are still on the university's floor.

Do we teach students to respect the rights of other people and public property? Or is it no longer the university's role to mould the future leaders of society and give them a sense of responsibility towards local, national and global issues? I am sure a vast number of similar cases can be found not only in Hong Kong, but in other parts of the world as well.

The commercialisation of higher education tends to diminish the role and power of universities to function effectively, given the competitive environment and the demands of the various stakeholders.

Giving in to the pressures and tensions faced by universities, however, leads to corruption in higher education in the sense of not fulfilling the traditional university role of societal betterment, lowering the quality of teaching and learning, and providing sub-standard graduates lacking a sense of responsibility and the necessary long-term skills and competencies to survive and adapt in a rapidly changing knowledge-based society.

It is time to step back and rethink the role and function of contemporary universities and the contribution commercialisation has made to corrupting the higher education sector.

* Roger Y Chao Jr is a PhD candidate in Asian and international studies at City University of Hong Kong, and vice-president of the Comparative Education Society of Hong Kong. His research mostly focuses on regionalism, higher education and internationalisation of higher education.

ASIA: Better planning and data needed to raise HE quality

Patrick Boehler23 January 2013 Issue No:256

 

Education professionals from Vietnam, Indonesia and Thailand met in Hong Kong from 14-18 January to better understand how to improve the gathering and processing of data for more accurate planning for their education systems up to universities, under a UNESCO programme to promote education policy coordination in Asia.

Citing the need for better planning Aryo Sawung, a director general with the Indonesian Ministry of Education, said: “We have not yet addressed problems beyond increasing the [education] participation rate.”

“Our next step will be to look into more accurate budgeting and how to set quality standards,” said Aryo, who attended the weeklong workshop, which involved almost 85 ministry officials and university researchers from Asia.

Indonesia, the world’s fourth most populous country, is decentralising its education budget to give provincial authorities more responsibility.

It will be more difficult for provinces to deal with their new responsibilities and make budgetary predictions with data that the central government has not gathered before, said Aip Badrujaman from the faculty of education at the State University of Jakarta.

According to participants, accurate projections into the future needs of their education systems are difficult, and education quality in countries such as Indonesia, Thailand and Vietnam has suffered because of inadequate data on demographic changes – especially as birth rates are slowing.

Against this changing backdrop, “We need to find ways to address two [education planning] problems: budget and the training of educators,” said Charoen Puwijit, a Thai Ministry of Education official.

“Education, especially higher education, is expanding in all three countries, possibly over-expanding. In South East Asia, the focus is on how to raise the quality of education,” said Mark Bray, a professor at Hong Kong University who organised the workshop.

The education picture in these countries had become more “fluid” than in the past. Education policy planners needed to consider a more complex picture, including cross-border migration as well as declining birth rates, Bray told University World News.

“The three countries have universal secondary education, which has increased demand for tertiary education,” he said. For education administrators, the challenge was also to deal with cross-border flows of students and manage new ways of teaching, such as distance learning.

While the most pressing challenges lie in primary and secondary education, reforms were necessary to guarantee a healthier development of the tertiary sector. “The base of the house needs to be kept standing, otherwise the roof, higher education, will fall,” Bray said.

Gabriele Göttelmann-Duret, head of the education and training unit at UNESCO’s International Institute for Educational Planning, said problems were faced by many developing countries:

“On the one hand, we have more and more professionals working in the education sector. On the other, we are seeing increasing decentralisation in policy-making.”

The education sector planning workshop was the third of its kind organised by UNESCO. Earlier sessions, in 2008 and 2010, took education administrators from Ethiopia, Ghana, Malawi, Tanzania, Uganda and Zambia to Paris.
 

GERMANY: Plagiarism proceeding against minister splits academia

Michael Gardner26 January 2013 Issue No:256

 

Allegations of plagiarism in the doctoral thesis of Germany’s Education Minister Annette Schavan have sparked a dispute among academics, universities and science organisations. Meanwhile, undaunted by considerable pressure from various sides, the University of Düsseldorf has initiated formal proceedings against former student Schavan.

Christian Democrat Annette Schavan wrote her doctoral thesis at the University of Düsseldorf 32 years ago.

Allegations of plagiarism arose last May, and the thesis was reviewed by Jewish studies scholar Stephan Rohrbacher, who concluded that wilful intent to deceive could be detected.

Nevertheless, Rohrbacher did stress that Schavan’s case could not be compared to that of her Christian Social Democrat colleague Karl-Theodor zu Guttenberg, who was stripped of his doctoral title and had to step down as defence minister in 2011.

Schavan denied the allegations. One of her most outspoken supporters was Jan-Hendrik Olbertz, president of Humboldt University in Berlin.

Christian Democrat Olbertz, who was formerly education minister of the state of Saxony-Anhalt, was particularly outraged over results of the review being leaked to the press, and claimed that Rohrbacher himself should have prevented this from happening.

He described the event as “disgusting” and said that attempts were being made to damage a successful higher education minister’s reputation.

Olbertz is now calling for a second, independent review, despite the University of Düsseldorf having commissioned Bonn law expert Klaus F Gärditz to assess its preliminary proceedings. Gärditz confirmed that no procedural errors had been made and that the review performed did not give any cause for complaint.

Only a few days before the university officially initiated formal proceedings, the Allianz der Wissenschaftsorganisationen, comprising Germany’s chief higher education and research bodies, issued a joint statement amounting to a harsh criticism of the University of Düsseldorf’s action.

The weighty alliance comprises the Alexander von Humboldt Foundation, the German Academy of Natural Scientists Leopoldina, the German Academic Exchange Service, the German Research Foundation, the Fraunhofer Society, the Helmholtz Association, the Rectors’ Conference, the Leibniz Society, the Max Planck Society and the Science Council.

It argued that withdrawing a doctoral thesis required procedural elements such as the principle of multi-assessor verification, assessors, evaluators and decision-makers acting separately, and expertise in the relevant subject.

And it demanded that “all those playing a responsible role in the proceedings should act in accordance with established standards, also in ongoing proceedings”.

The University of Düsseldorf maintained that the statement was an attempt to pressurise it. The rules referred to by the alliance, it argued, do not apply to formal procedures but merely to “internal procedures not tied to a legal form that are intended to settle issues of misconduct”.

Regarding the requirement to have separate assessors, evaluators and decision-makers, the university stressed that this is not stipulated in official regulations on doctorates. Referring to the issue of multi-assessor verification, the university said decisions were taken by the 15 members of the faculty committee, and not by a single person.

Politicians have responded cautiously to the matter. Not surprisingly Schavan, who is Federal Chancellor Angela Merkel’s closest ally, can reckon with her party’s support.

Christian Democrat Secretary General Hermann Gröhe has professed his unwavering trust in the minister, while opposition Green Party whip Jürgen Trittin said that innocence had to be assumed as long as proceedings were under way. However, Trittin added that if Schavan were stripped of her doctoral title, she would be “untenable” as minister of education and research.

Bernhard Kempen, president of the Deutscher Hochschulverband, which represents higher education lecturers, said the union fully trusted the University of Düsseldorf’s ability to conduct legally sound and orderly proceedings.

But he was highly critical of the intervention by the alliance of science organisations, arguing that “leading academic representatives are doing higher education and research a bad turn by creating the embarrassing impression that politically expedient results can be encouraged by speaking out for them in public”.

Andreas Keller, head of the higher education and research board of the teachers’ and scientists’ union Gewerkschaft Erziehung und Wissenschaft, echoed that sentiment. Keller said that if the University of Düsseldorf did not confirm the allegations of plagiarism, this would create the impression that the alliance had been putting pressure on it.

He believes that in future, “as soon as decisions are made concerning the alliance, for example, issues such as university funding or money for research, the question will always arise whether this is because a helping hand was lent at the right time”.

Value of construction in Cambodia skyrockets

Last Updated on 23 January 2013

By Hin Pisei

 

The amount of money spent on construction in Cambodia soared by 72 per cent in 2012 compared to 2011, according to data from the Ministry of Land Management, Urban Planning and Construction.
The ministry said it had issued 1,694 construction patents covering 6.5 million square metres of land, involving total capital of $2.1 billion in 2012, compared with 2,125 patents for 4.2 million square metres and capital of $1.2 billion in 2011, an increase of 71.9 per cent, the data shows.
Lao Tip Seiha, deputy general director of construction at the Ministry of Land Management, Urban Planning and Construction and an adviser to the Supreme National Economic Council, said the significant growth of capital was due to several construction projects in 2012, as many high buildings on more than 3,000 square metres each had been constructed in Phnom Penh in 2012 and in provinces such Preah Sihanouk, Battambang, Kampong Thom and Kandal.

“Because Cambodia’s economic situation is stable, the capital has increased well, local and international investors are confident in the political policies, and our country is rich in infrastructure,” he said.

As Cambodia’s population and economy have climbed steadily, the demand for housing, trade buildings, offices, factories, hotels, schools, hospitals and entertainment centres has increased as well.
“In 2013, construction will be boosted further than in 2012 despite Cambodia holding a general election, because the economic situation, daily life, micro-finance and security are good, and investors have confidence in the government. All these are the foundations to push the national economy, because it can provide many jobs to people such as workers, architects, engineers, technicians... and urge the price of real estate up further,” Tip Seiha said.

Many countries have invested in Cambodia since 2000, such as China, South Korea, Britain, Thailand and Malaysia.

In 2012, several big Japanese companies have also invested heavily in Cambodia.

 

Interesting times for Phnom Penh office market

Last Updated on 23 January 2013

By Ryan O’Sullivan

Tight market conditions, strong demand for office space and constrained levels of new supply are the principal reasons behind the rising occupancy costs in prime office markets across the globe. 

Canadia Tower in central Phnom Penh. Photograph: Heng Chivoan/Phnom Penh Post

Out of the top five most expensive office markets in the world, the Asia Pacific region contains four: Hong Kong, Tokyo, Beijing and New Delhi. With Hong Kong’s inherent lack of office supply, prime rents remain robust at $171 per square metre per month (psqm/m).

Demand from global financial and manufacturing companies kept occupancy costs high in Tokyo, while in Beijing pharmaceutical companies continued to expand.

Worldwide, office demand stemmed from the automotive, high-tech and energy industries. The latter is evident in Cambodia, where drilling off the coast near Sihanoukville has helped to increase office demand. Thus, companies such as Total and Chevron are large office occupiers, and new Japanese oil exploration firms will also establish operations in Cambodia by the end of 2013.
The growing insurance industry, particularly life insurance, is also a key office demand driver in Phnom Penh.

Cambodian Life, Manulife and Prudential jointly occupy more than 3,000 sqm of office space in Phnom Penh and will likely expand by the end of this year.
The top office buildings in Phnom Penh are seeking rents of between $21 and $28 psqm/m, and with the lack of high-quality office developments, rents are unlikely to decrease.
In terms of new supply, Vattanac Capital will be ready for occupation this year. The building will be the first Grade A office development in the Kingdom.

The development recently won an award for the best commercial property in Southeast Asia, and its specifications match many office buildings in Hong Kong and Singapore. This is not only welcome news for occupiers, but also helps to elevate Cambodia’s standing among investors.
Cambodia’s sound macro-economic fundamentals, the first Grade A office development in the country, and the continued expansion of multinational corporations will make 2013 an interesting year for the Phnom Penh office market.

Number of construction companies in Cambodia soars

Last Updated on 09 January 2013

By Seun Son

 

Construction and design companies that have registered for business in Cambodia have grown to number 1,205 at the end of 2012, according to an official at the Ministry of Land Management, Urban Planning and Construction.

Lav Tepseiha, deputy director of the construction department of the ministry said it is a large number, and is good for Cambodian construction.

“The construction sector in Cambodia has increased every year and it is continuing to boost the Kingdom’s real estate,” he said.​

There are 932 Cambodian and 273 foreign construction and design firms at the end of 2012, he said.
“I have noticed that foreign companies that invest the construction in Cambodia have climbed much more, especially in 2012, because they are looking for the potential of construction investment in Cambodia,” he said.

Foreign investors in Cambodia come from 16 countries: China, Korea, England, Japan, Russia, Lao, Malaysia, Taiwan, India, Vietnam, the United States, Singapore, Belgium, Australia and France. China is number one, South Korea number two and England third.

This growth is a good sign for Cambodia’s real estate, said Tepseiha. With the Kingdom’s political stability and rich human resources have come technical prowess, and specialist construction companies have sprung up.

“Companies will increase more and more next year because the number of proposed projects that are being submitted for permission continue to increase,” he added.

Key Real Estate Company CEO Soun Seap said that this growth is good for Cambodia’s economy.
Cambodia’s construction sector has increased due to economic and political stability, he said.