Mekong Memo Cambodia 20230911

Mekong Memo Cambodia Weekly, September 11, 2023: Business, politics, finance, trade & legal news.

We monitor and filter the very best and most insightful stories from Southeast Asia directly to your inbox every week.

By reviewing a wide variety of media including legal, financial and other relevant industries along with government and NGO sources, we are able to sift through the noise and bring you only what we believe to be relevant to an informed observer of Cambodia business news.

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Here is your Mekong Memo Cambodia for the week of September 11, 2023.

Headlines:

New Leadership and the Uncertain Path to Competitive Elections

Democracy in South-East Asia Faces Decline Amid Power Consolidation

Rising NPLs Lead to Forced Land Sales and Child Labor

ASEAN Surpasses U.S. and EU as China's Largest Trading Partner

Cambodia Grapples with Rising US Dollar

Reviving Trust in Khmer Riel Amidst US Dollar Dominance

Hit Chinese Film Deters Tourism to SE Asia

US-Cambodia Relations Strengthened Amid Geopolitical Tensions

Cambodia-Canada Trade Plunges 25% YTD

Tourism Numbers Misleading Amidst Struggling Businesses

Exports Show Modest Growth, Surge in Trade with China

Cambodia Ranks High as Investment Destination for Chinese Companies

Cambodia Sets Foreign Employee Quota for 2024

Qatar Airways to Resume Flights to Cambodia

Cambodia Positioned as "Gateway to ASEAN" for Indian Investors

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New Leadership and the Uncertain Path to Competitive Elections

Hun Manet, son of former Cambodian strongman Hun Sen, has taken over as the country's leader, aiming to legitimize his rule through economic development. The transition comes amid declining support for the ruling Cambodian People’s Party (CPP) and the absence of competitive elections. The new government's success in achieving upper-middle-income status for Cambodia by 2030 could pave the way for the return of competitive elections. However, the role of Western democracies and the demands of Cambodia's growing youth population will be crucial factors in this political evolution.

Read more: East Asia Forum

Democracy in South-East Asia Faces Decline Amid Power Consolidation

Democracy is deteriorating in key South-East Asian countries—Indonesia, Thailand, and Cambodia—due to common themes of power consolidation and weakening political institutions. Indonesia's President Jokowi has eroded civil liberties, while Thailand's monarcho-military elite undermines electoral outcomes. Cambodia has transitioned into a hereditary dictatorship. These countries exhibit a trend of personalized or dynastic power structures, compromising political parties' roles as platforms for change. Despite civil society's resistance, the decline continues, raising concerns for the region's democratic future.

Read more: The Economist

Rising NPLs Lead to Forced Land Sales and Child Labor

Cambodia's microfinance sector is facing a crisis as non-performing loans (NPLs) rise, signaling severe consequences like forced land sales and child labor. The microloan portfolio has ballooned to $16 billion, nearly half of the country's GDP. Economists predict an increase in NPLs due to economic slowdown, with data showing loans "at risk" have surged up to 300% since 2021. Over 92% of borrowers used land titles as collateral, and child labor has been reported as a direct result of excessive debt. The situation raises serious human rights concerns.

Read more: The Diplomat