A1. As you said, this is the 50th Anniversary of diplomatic relations for our two countries. But, because of the civil war period, which lasted almost three decades, I will talk more about our relations after this period. Of course, before the turmoil we had normal and good relations, but because of the Pol Pot regime we had to close our embassy in 1975 and re-opened it in 1992.

I would say that our bilateral relations are very good. I would even say that it is especially good when I compare with bilateral relations between Japan and other countries, even in Asia. This is mainly because when Cambodia tried to seek peace the Japanese diplomacy was very much involved in that peace process, during the late 1980s, as part of an international effort to bring peace in Cambodia.

Japan played a unique and important role. Many diplomats, government officials and political leaders from Japan were engaged at certain important stages of the process of negotiations to establish peace. Japan also tried, together with France and other countries, to organize international conferences to establish peace. After the peace agreement in Paris, the country was not very stable yet; internal conflicts continued and then the UN came in to establish UNTAC. The Japanese national Mr. Akashi represented UNTAC; of course he's not a Japanese government official, but because of his nationality the Japanese people closely followed the UNTAC's work. As you may remember, the Japanese government sent its first ever peacekeeping forces abroad to Cambodia.

Japan is a country whose public opinion is strongly pacifist, so when the Japanese government decided to play a more active role internationally, during the late 1980s, the public opinion in Japan was against anything related to war. That explains why, when our government tried to enact a law enabling Japan to participate in overseas peacekeeping operations, this first endeavor failed. But after that, the government re-submitted a new draft law and our parliament successfully passed it. Based upon this law, Japan sent its first peacekeeping operations abroad to Cambodia. This strongly impressed the Japanese, and Cambodia became very close to the heart of our people.

After the successful elections administered by UNTAC, Cambodia established its first after war government in 1993. The major task was then to reconstruct the country. Since that time, Japan has been the top donor; we have assisted Cambodia in their efforts of reconstruction in diverse ways and I can say that the whole country is very thankful for the Japanese assistance.

Q2. As you said Japan is one of the main donors to Cambodia. This falls into the ODA policy, Could you give us the main lines of this policy?

A2. If we go back to an earlier period, it had been a long and consistent policy of the Japanese government to help the economic development of Asian countries. In the 1970s and through the 1980s, the Japanese economy rapidly grew and our government has made a series of five-year plans to double our assistance to developing countries in the world, and especially in Asia through our ODA.

We considered first the organization called ASEAN, as the central group of countries in Asia. Our close relations with ASEAN countries started 30 years ago. In 1977, the former Prime Minister Mr. Fukuda made a very clear policy speech in which he underlined that Japan would consider ASEAN countries as equal partners for development and to establish peace and stability in this area. We increased our ODA to this particular region in Asia year by year. I think we can say with confidence that the massive contribution of our ODA, for these original ASEAN countries, helped their economic development rather substantially. This is the case for countries such as Thailand, Malaysia, Singapore, the Philippines and Indonesia.

We consider that our policy was very successful. At present day, we continue to help the ASEAN countries as the central core group of Asia. ASEAN has become larger; now they are 10 member countries. The most important agenda of ASEAN today is what they call IAI or Initiative for ASEAN Integration. This means that they are committed to fill the gap of development between the original ASEAN countries and the latecomers: Vietnam, Myanmar, Laos and Cambodia. The Japanese government has now a clear policy of helping this important agenda of IAI. This means that we have to continue to give assistance to ASEAN countries and particularly those new members.

Q3. Cambodia lies in a strategic place for ASEAN, it is more or less the center of Indochina. What are your expectations for the development of this country?

A3. I consider that among these Indochina countries, Cambodia is by far the least developed. It is far behind the other countries. I can show it to you with some statistics; when we compare some economic and social indicators like the per capita GNP, the ratio of sewage systems, the percentage of paved roads, access to safe water, infant mortality, etc…, we see that those indicators show that Cambodia is the lowest in this sub-region. Even Laos, which is a very poor country, lies ahead of Cambodia.

This is due, of course, to the decades of war and instability. I traveled extensively in the country through all the provinces and I was impressed by the extreme poor conditions of economic infrastructure; roads and bridges. I even saw a bridge which was destroyed by the US bombing during the late 1960's and has not been repaired since then. Since Cambodia went into the civil war in 1970 the roads and bridges were also destroyed and had not been rehabilitated. It was only in 1998, when this country really obtained peace and stability that they have been able to work on their infrastructure rehabilitation. It is only four years ago that Cambodia really started the reconstruction efforts. Not only physical infrastructure, but also legal and administrative systems were destroyed during the war.

You also have to consider that human resources have been destroyed, especially during the Pol Pot regime; they often say 1.7 million people died then, and most of them were intellectuals and engineers who could carry out the development of this country. Because instability kept on until 1998, the people didn't access to "normal education". Therefore, the people who are supporting the development of this country today are those who barely survived the Pol Pot period. The younger generations have not received appropriate education either, so the negative legacy is enormous and almost unthinkable in other neighboring countries. This means that conditions for economic development are very much constrained in this country and therefore consider that priority must be given to Cambodia in developing Indochina sub-region.

Q4. Which are nowadays the priorities in order to develop the country and allow FDI to flow into Cambodia?

A4. First of all we have to rehabilitate the infrastructure such as roads, bridges, electricity and telecommunications. Prime Minister Hun Sen is very conscious of this need for the country's development. The government has been asking donor countries to help rehabilitate roads and bridges. Japan may be the number one country in helping the infrastructure, but international organizations such as World Bank and Asian Development Bank are also really involved in this aspect.

Q5. Can you give us an idea of the ODA that the Japanese government has given to Cambodia?

A5. In the past three or four years our government has been helping this country an average amount of some $100-$120 million per year; including infrastructure building, human resources development, rural development and assistance to the health and education sector.

Prime Minister Hun Sen seems to give a top priority to rehabilitate infrastructure, as it is the basis of any economic activity. If we go around the provinces, we see that roads are so bad that even farmers who grow some vegetables cannot sell them to neighboring villages. Thus, the Royal Government of Cambodia asked not only to Japan, ADB, World Bank, but also to other countries such as Thailand, Laos, Vietnam and China for infrastructure assistance. South Korea also participates in this effort now.

The government's ultimate goal is poverty reduction but the Japanese government as well as the Cambodian government consider that building infrastructure and thereby promoting economic activities is a very effective way to reduce poverty. There are other focal areas of our assistance such as health and education, the rural development and then human resources development in all areas. We also assist the country in their de-mining activities. Last but not the least we attach importance to system building, such as rebuilding the legal framework; we are providing assistance to draft the civil code, the civil procedures, which are now completed this year.

Q6. Do all those projects go through JICA?

A6. No, not all of them. In every country the system of assistance is very complicated. JICA is a governmental organization that conduct technical co-operation. It's not a funding organization. We extend a lot of grant assistance to construct bridges and hospitals or rehabilitate roads, but this financial assistance is provided by the Foreign Ministry of Japan.

JICA is under the jurisdiction of the Foreign Ministry and they conduct technical assistance such as dispatching Japanese experts and advisors to this country in all kinds of fields. JICA also receives technical personnel from the developing countries to have them trained in Japan or in other countries. It also dispatches many development survey teams; for instance when you have to construct a road, establish a hospital or create irrigation facilities, you need these surveys and that is also JICA's job.

Q7 Could you tell us more about the involvement of Japanese companies in Cambodia and what are their main projects?

A7. At present time there are over 40 Japanese companies in Cambodia; 10 Trading Companies, 16 Construction Companies and the rest are different types of companies. Most of these companies, Trading Companies or Constructors, conduct their activities based on our government assistance or ODA. That explains why there are so many Construction Companies. There are only a few companies that invest as private foreign direct investment and these are rather small in size.

The first investor from Japan is a wood-processing company, called Okada; this company operates in joint venture with the Cambodian government. The second private investment is Eastern Steel Company and is also a joint venture. Japanese Trading Company called Sumitomo invested in this company. They produce tin products for fences or roofs; annual production is about 5 million dollars. There is also Suzuki Motors that has a motorbikes factory; annual production is about 5 million dollars. Toyota Trading has a sales and repair shop of automobiles. There is also Marubeni trading company; they constructed an oil jetty in joint venture with a local Cambodian company. Ajinomoto started a sales company last year, and that's about all for Japanese private investment.

Q8. What are according to you the advantages and inconveniences that an investor encounters in Cambodia?

A8. I think that among this small number of companies, many of them have some problems. Most of those companies are struggling with the smuggling that makes business very difficult. For instance Eastern Steel who produces tin-plates, they suffer from the smuggled similar products from Thailand or Vietnam. Their production encounters lots of difficulties and they lose competitivity. Toyota Trading also encounters this problem, the customs ratio is very high for automobiles, but there are many smuggled automobiles that don't pay any taxes. Imported automobiles with high customs duties do not sell very well vis-à-vis smuggled automobiles. So this is one of their serious problems Cambodian authorities are taking measures to reduce smuggling.

Q9. Could you tell us more about your career path and your greatest satisfaction as Japanese Ambassador to Cambodia?

A9. Well, I entered the Foreign Service in 1968, so this is my 35th year in the Japanese Foreign Service. As diplomats we serve in Japan or in foreign countries. As for my foreign assignments, I served in France twice, and then the Philippines, the former Soviet Union at the time of Gorbachov, i.e., at the time of the great changes in the Soviet Union. After Moscow I went to South Korea and my latest foreign assignment was at Honolulu, Hawaii as Consul-General.

Cambodia is my seventh posting in a foreign country, but it is my first Ambassadorial assignment. Because of the close relations between Japan and Cambodia, being Japan the largest donor to this country, the Japanese role in Cambodia is very important, so I enjoy being here. Having lived here for more than two years and three months and having traveled in all provinces and countryside; I have observed the development situation and the extent to which poverty is deeply rooted. I sincerely consider that Japan must assist the Cambodian efforts.

I know that to promote foreign direct investment, official development assistance (ODA) is very important. At this stage the investment conditions are not really good particularly because of the lack of infrastructure, such as the roads, communications systems, electricity, etc… So in the early stages of development, aid from foreign donors or international institutions plays a vital role. In order for Cambodia to ensure its development it needs foreign assistance but the government must manage the country in a democratic and non-corrupt way. There is the donor's community that maintains a close dialog and gives advices to the Cambodian government to reduce corruption, to pursue reforms and improve the situation. As representative of the largest donor to this country, I have been trying to join in this international effort, so that the Cambodian government can conduct a good economic policy and pursue serious reforms. In fact, there are many problems like corruption, smuggling, and problems of drugs and even traffic of human beings; we, as donor countries and donor institutions, always encourage this government to make reforms and realize better governance.

In doing so I consider that Japan's role is important. So far I have been doing my utmost efforts in that direction and I think the government headed by Prime Minister Hun Sen has been going in the right direction. There are many difficulties, but they are working hard. Sometimes donors give severe criticisms of the situation in this country and they are often right, but we have to recognize the difficulties coming from the lack of infrastructure and human resources and the weak legal and judicial systems which have also been destroyed during the war. We have to be patient. At least I can say that little by little, and steadily, progress has been made, so we have to continue encouraging the government to do more in that direction.

Q10. As last question, what would be your final message to foreign investors who are interested into Cambodia?

A10. Cambodia is still at the very initial stages of development, but in certain sectors there are good short- or medium-term prospects. The tourism has a big potential, and has been developing quite well. First, I think Sihanoukville and its vicinity have good prospects for having more economic activities in the near future. Although the major roads are not yet rehabilitated, I think that in four or five years time, major national roads will be more or less rehabilitated and will facilitate the traffic between Thailand, Cambodia and Vietnam.

There is also a hopeful prospect for oil exploitation and exploration offshore of Sihanoukville and if it's successful it will change the perspectives of Cambodia's economic development. Although it is not really developed, there is a potential for some agro-industries as there are a number of agricultural products that can be processed. The government and the donor community are assisting for the planning and realization of some industrial zones or special processing zones. So, in the medium term perspective this country has a rather good future.