By: Ek Tha
The dark cloud which had hanged over Cambodia during the global downturn since mid-2008 seems to disappear and Cambodia has seen many signs of economic recovery in the region and the spill over effects will bring opportunities for a new take off in Cambodian economy. There are optimistic indications that Cambodia’s economy bounces back in the coming years.
The Asian Development Bank (ADB) provided new outlook that the emerging East Asian economies will grow higher than earlier expected 6.5 percent to 6.8 percent in 2010. The Bank also said last year’s Asian growth was 4.2 percent instead of 3.6 percent as earlier forecasted. So, this could be good news for Cambodia, meaning that foreign investors from the region which look for long-term investments could flow billions of dollars into Cambodia where the country has become an investment destination on the region’s radar screen since Cambodia is well known to be enjoying political and social stability, thanks to the wise leadership of Samdech Akka Moha
Sena Padei Techo Hun Sen, Prime Minister of the Royal Government of Cambodia. Slowly but surely, Cambodia achieved many fundamental reforms in public administration, public finance, and judiciary, thus promoting the rules of law, responsibility and accountability. The AntiCorruption draft was adopted last month by the government cabinet meeting weekly for adoption and already presented to the National Assembly in order to further enhance the confidence of the national and international investors and a commercial court will be institutionalized to meet the challenge of the modern day economy.
Another plus for Cambodia is the continued financial support of China. Last month China approved US$1.2 billion in grant aid and loans for Cambodia to develop infrastructures. For sure, the country’s infrastructure improvement will attract more investors—especially Chinese investors themselves who have been leading in Cambodia’s foreign direct investment in recent years.
Already, Vietnamese business is interested in new investments of billions of dollars in Cambodia as reported in December. The two nations, Cambodia and Vietnam inked to bring about US$6 billions of Vietnam’s investment to Cambodia in the areas of power generation, food processing, fertilizer production, rubber plantation and health care. It is worth noticing that the two-way trades between Cambodia and Vietnam have increased significantly in recent years, reaching US$1.7 billion in 2008, up 40 percent compared to 2007.
Another factor that we should also be optimistic is the inward investment of South Korea, whose value was recorded US$1.21 billion in the period 2007- 2009. And Korean loans were US$220 million (2001-2009) and concession loans for 2008- 2011 were recorded US$120 million for five projects.
No one needs to be a rocket scientist to figure it out that foreign investments and infrastructure development contribute to the growth of the national economy, and for the case of Cambodia, tourism, garment export, rice production, banking, and construction are the major areas that drive the national economy.
Taking into account the statistics given by tourism ministry, foreign tourist arrival in Cambodia increased 2 percent in 2009, with a total number of 2,160,000 tourists—which is a sign of recovery in tourism industry.
Angkor area, just for the last few months has made the news in many well known magazines in Europe, including National Geographic, Geo, Atlas and others, and National Geographic, for instance, is published in French, English, German and Russian. The richness of Cambodia in cultural heritages, recognized as a “Cultural Empire” will attract cultural tourists all over the world in even greater number. The Temple of Preah Vihear, another world heritage after Angkor temple, has become gradually a great tourist attraction in the near future. More eco-compatible tourist destinations are expanded in the southwest, the north and northeast. In this regard, it can be said that tourism sector continues to play a vital role in contributing to the country’s growth given the tourist arrival is expected to increase 15 percent a year.
Another strong sector is agriculture especially in rice production. Cambodia has been successful with rice production in the last decade and this prospect remains unchanged. The kingdom produced 7.286 million tonnes of rice for 2009/2010 of which the country saw another surplus of rice of 3.1 million tonnes available for export.
While tourism and agriculture are the backbone of the Cambodian economy, foreign investments will contribute to the development and growth in other areas, such as garment industry, banking and construction.
Finally, the establishment of the China-ASEAN free trade area (FTA) on January 1, 2010, under which most goods traded between China and the 10-member Association of Southeast Asian Nations (ASEAN) attach zero or little tariff, will promote the development of trade and economic cooperation of the region and benefit greatly countries and the people. The world's largest free-trade area (FTA) came into force since January, 2010, an initiative that gives a shot in the arm for global trade troubled by rising protectionism.
Consequently, Cambodia would greatly benefit from the ChinaASEAN Free Trade Area. Cambodia is therefore optimistic about the prospect of growth of the economy of Cambodia. Obviously 2009 was a low growth year, but the beginning of 2010 signals the dawn of many prosperous years to come.
The dark cloud which had hanged over Cambodia during the global downturn since mid-2008 seems to disappear and Cambodia has seen many signs of economic recovery in the region and the spill over effects will bring opportunities for a new take off in Cambodian economy. There are optimistic indications that Cambodia’s economy bounces back in the coming years.
The Asian Development Bank (ADB) provided new outlook that the emerging East Asian economies will grow higher than earlier expected 6.5 percent to 6.8 percent in 2010. The Bank also said last year’s Asian growth was 4.2 percent instead of 3.6 percent as earlier forecasted. So, this could be good news for Cambodia, meaning that foreign investors from the region which look for long-term investments could flow billions of dollars into Cambodia where the country has become an investment destination on the region’s radar screen since Cambodia is well known to be enjoying political and social stability, thanks to the wise leadership of Samdech Akka Moha
Sena Padei Techo Hun Sen, Prime Minister of the Royal Government of Cambodia. Slowly but surely, Cambodia achieved many fundamental reforms in public administration, public finance, and judiciary, thus promoting the rules of law, responsibility and accountability. The AntiCorruption draft was adopted last month by the government cabinet meeting weekly for adoption and already presented to the National Assembly in order to further enhance the confidence of the national and international investors and a commercial court will be institutionalized to meet the challenge of the modern day economy.
Another plus for Cambodia is the continued financial support of China. Last month China approved US$1.2 billion in grant aid and loans for Cambodia to develop infrastructures. For sure, the country’s infrastructure improvement will attract more investors—especially Chinese investors themselves who have been leading in Cambodia’s foreign direct investment in recent years.
Already, Vietnamese business is interested in new investments of billions of dollars in Cambodia as reported in December. The two nations, Cambodia and Vietnam inked to bring about US$6 billions of Vietnam’s investment to Cambodia in the areas of power generation, food processing, fertilizer production, rubber plantation and health care. It is worth noticing that the two-way trades between Cambodia and Vietnam have increased significantly in recent years, reaching US$1.7 billion in 2008, up 40 percent compared to 2007.
Another factor that we should also be optimistic is the inward investment of South Korea, whose value was recorded US$1.21 billion in the period 2007- 2009. And Korean loans were US$220 million (2001-2009) and concession loans for 2008- 2011 were recorded US$120 million for five projects.
No one needs to be a rocket scientist to figure it out that foreign investments and infrastructure development contribute to the growth of the national economy, and for the case of Cambodia, tourism, garment export, rice production, banking, and construction are the major areas that drive the national economy.
Taking into account the statistics given by tourism ministry, foreign tourist arrival in Cambodia increased 2 percent in 2009, with a total number of 2,160,000 tourists—which is a sign of recovery in tourism industry.
Angkor area, just for the last few months has made the news in many well known magazines in Europe, including National Geographic, Geo, Atlas and others, and National Geographic, for instance, is published in French, English, German and Russian. The richness of Cambodia in cultural heritages, recognized as a “Cultural Empire” will attract cultural tourists all over the world in even greater number. The Temple of Preah Vihear, another world heritage after Angkor temple, has become gradually a great tourist attraction in the near future. More eco-compatible tourist destinations are expanded in the southwest, the north and northeast. In this regard, it can be said that tourism sector continues to play a vital role in contributing to the country’s growth given the tourist arrival is expected to increase 15 percent a year.
Another strong sector is agriculture especially in rice production. Cambodia has been successful with rice production in the last decade and this prospect remains unchanged. The kingdom produced 7.286 million tonnes of rice for 2009/2010 of which the country saw another surplus of rice of 3.1 million tonnes available for export.
While tourism and agriculture are the backbone of the Cambodian economy, foreign investments will contribute to the development and growth in other areas, such as garment industry, banking and construction.
Finally, the establishment of the China-ASEAN free trade area (FTA) on January 1, 2010, under which most goods traded between China and the 10-member Association of Southeast Asian Nations (ASEAN) attach zero or little tariff, will promote the development of trade and economic cooperation of the region and benefit greatly countries and the people. The world's largest free-trade area (FTA) came into force since January, 2010, an initiative that gives a shot in the arm for global trade troubled by rising protectionism.
Consequently, Cambodia would greatly benefit from the ChinaASEAN Free Trade Area. Cambodia is therefore optimistic about the prospect of growth of the economy of Cambodia. Obviously 2009 was a low growth year, but the beginning of 2010 signals the dawn of many prosperous years to come.