2. Over the past several years, the political and security situation in Cambodia has remained stable and peaceful as reflected by the success of last year's Commune Council Elections. The Agreement of the Royal Government of Cambodia (RGC) to cooperate with the United Nations in organizing an appropriate tribunal to prosecute the main perpetrators of the genocidal crimes committed during the Khmer Rouge (KR) Regime was formalized on 6 June 2003.
3. At the same time, the Royal Government has undertaken a wide-ranging reform agenda covering major areas: governance and public administration, legal and judicial reforms, demobilization and military reform, fiscal and financial reforms, and natural resources management. The RGC has taken further measures to strictly control the use and circulation of small arms and light weapons as well as ammunitions, and to eliminate their illegal procurement and sales by destroying most of those collected arms.
4. Since 1993 Cambodia's annual GDP has averaged 5.6 percent growth. In 2002, Cambodia's economy was hallmarked by continued macro economic stability as witnessed by a GDP growth around 5.0 per cent and a low inflation rate.
5. In regional and international affairs, Cambodia's role and prestige have risen, given the fact that Cambodia played host to the 8th ASEAN Summit, the ASEAN Plus Three Summit, ASEAN Plus One Summits with China, Japan, the Republic of Korea, and with India for the first time. Cambodia also hosted the meeting between the ASEAN Leaders and the Leader of South Africa. As the Chairman of the ASEAN Standing Committee (ASC) and the ASEAN Regional Forum (ARF), Cambodia's external relations centered on assuming this important role on behalf of itself and on behalf of the respective member countries within both ASC and ARF. The deepening and expansion of cooperation with all the partners, especially within ASEAN, ARF and the ASEAN plus Three in all dimensions-in particular economic, political, security and functional cooperation-were Cambodia's important priority.
6. At the ASEAN Summit in Phnom Penh, in November 2002, the Leaders signed:

• the "ASEAN Tourism Agreement (T -ASEAN Agreement);
• the "Framework Agreement on Comprehensive Economic Cooperation"-with the Premier of China, that would establish the ASEAN-China Free Trade Area within a period of ten years;
• the "Joint Declaration on Comprehensive Economic Cooperation" (CEP) with Japan which includes elements of a free trade area;

They witnessed the signing of the Declaration on the Conduct of Parties in the South China Sea (DOC) by ASEAN Foreign Ministers and the Special envoy of the People's Republic of China.

They also adopted:

• the "Declaration on Terrorism", setting up measures and ways of cooperation in combating terrorism;
• the "Joint Declaration between ASEAN and China on Cooperation in the Field of Non-Traditional Security Issues" with Chinese Leader, strengthening cooperation in the fight against transnational crimes;
• the Joint Ministerial Statement on the Initiative for the Development in East Asia (IDEA);
• the Final Report of East Asia Study Group (EASG) led by the Republic of Korea, which contained 26 concrete short, medium and long-term recommendations towards the long-term vision of the establishment of an East Asian Community (EAC);

They launched the First ASEAN-India Summit in Phnom Penh and agreed to have regular ASEAN India Summit as an annual basis and to set up Task Force to study the possibility of establishing India-ASEAN Free Trade Area (AFTA) Linkages.

They met the President of the Republic of South Africa, Chairman of the African Union (AU), who came to brief the 8th ASEAN Summit on the New Partnership for Africa's Development (NEPAD), opening the door for ASEAN-Africa interactions for issues of common interest and mutual benefits.

II. Cambodia's Contribution to Regional and International Security

7. This year, the overall political and security situation in the Asia-Pacific region has remained relatively stable despite the fact that the region continues to face uncertainty. The major challenges confronting the region are associated with tensions in the Korean peninsula, the threats of terrorism, war in Iraq and its aftermaths, the Middle East, and the slowness of the global economic recovery.
8. Relations among the major powers have remained stable and constructive. They have tremendous importance to peace, stability and security in the Asia-Pacific and have benefited the region. They underline their shared interest in the spirit of cooperation and in the maintenance of regional and international peace and security.
9. The situation in the Korean peninsula has been a major source of concern to all. Cambodia, in its capacity as the Chair of the 361 ASC/10th ARF, has made every efforts in a genuine manner to help defuse tension there and facilitate dialogue among all parties concerned. In so doing, it has actively put into implementation the enhanced role of the ARF Chair and PD. Cambodia welcomed the recently concluded Talks among the People's Republic of China, the Democratic People's Republic of Korea (DPRK) and the United States of America on nuclear issues and the subsequent resumption of high level inter-Korean meetings, considering theses events as a meaningful start towards peaceful and long-lasting settlement of the Korean issue. Cambodia calls for the continuation of dialogue and consultations among all parties concerned.
10. Cambodia welcomed the Independence of the State of Timor-Leste on 20 May.
11. Cambodia was pleased with the historic signing of the Declaration of the Conduct of Parties in the South China Sea (DOC) by ASEAN and China in Phnom Penh on 4 November 2002.
12. The increasing scope and intensity of transnational crime has expanded the regional security agenda to cover non-traditional security issues. Of particular concerns to member-states in the region are trafficking of narcotic drugs and related crimes, trafficking in persons including women and children, the illicit trade of small arms and light weapons, and infectious diseases like HIV/AIDS and SARS. Cambodia has rendered active cooperation to international efforts to curb transnational crimes effectively.
13. Despite the continued threats of terrorism, the ARF has been successful in combating it. Cambodia acceded to the Agreement on Information Exchange and the Establishment of the Communication Procedures between Indonesia, Malaysia and the Philippines in Brunei Darussalam on 30 July 2003, which among other thing, calls for closer cooperation of different agencies in those countries to effectively combat terrorism. Cambodia, on it part, had in late May 2003 arrested a number of terrorist suspects, based on hard evidences of a direct link to the terrorist network in the region.
14. At a national level, Cambodia has taken various measures including reforming and upgrading its security policy in order to keep pace with the changing security situation in the region and the world. To respond effectively to any threat and for its own national security, Cambodia has set its security priorities by adapting it to the current security environment. Those security priorities include the following:

• Enhancing border security capabilities against transnational crimes and infiltration of terrorist groups. Increasing efforts in infrastructural and community development in border areas;
• Maintaining navy's technological capability and resources to achieve an effective patrol capability for the maritime border;
• Expediting military reforms, particularly demobilization, improving soldiers' living standard, unit restructuring and the reform of the training system;
• Establishing a mechanism for force mobilization to ensure the sustainability and the quality of the armed forces;
• Expanding military participation in national development, particularly in the areas of engineering, relief operations, suppression in safeguarding the environment (tree planting) and other humanitarian activities;
• Gradually building up the capabilities to participate in regional and international military activities, especially small-team participation in future UN's peace operation.

15. Cambodia, as the current ARF Chair, commits itself to the constructive dialogue and important role of the ARF Chair, thus enabling the ARF participating states to exchange information relevant to the ARF in a timely manner and on a voluntary basis. The ARF Chair's activities include the following:

• ARF Statement condemning the bombing in Bali;
• initiatives undertaken to help defuse tensions on the Korean peninsula;
• liaising with other regional and international organizations.

• To that end, on 5-7 December 2002, H.E Mr. Hor Namhong, Senior Minister, Minister of Foreign Affairs and International Cooperation attended the 10th Ministerial Council Meeting of the Organization for Security and Cooperation in Europe (OSCE) and held discussions with H.E. Mr. Antonio Martins de Cruz, Foreign Minister of Portugal and Chairman of the OSCE;
• In a separate meeting with Mr. Jan Kubis, General Secretary of OSCE, the latter agreed to the proposal put forward by H.E. Hor Namhong on forging closer cooperation between the ASEAN Secretariat and the Secretariat of the OSCE.
• On 21 January -2003, in a meeting with H.E. Mr. Javier Solana, Secretary-General of the European Union, they agreed that there was a need for ASEAN-EU cooperation against terrorism. An ASEAN-EU joint Declaration on Cooperation to combat terrorism was adopted at the 14th ASEAN-EU Ministerial Meeting (14th AEMM) in Brussels on 28 January 2003.