Cambodia 20250317
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Headlines:
Online Scam Crackdowns Getting Results
LDC Graduation Challenges Economic Outlook
ASEAN Wants South China Sea Code of Conduct
Public Debt Still Manageable at $12 Billion
Infrastructure Plans Draw Korean Interest
AI Strategy for Economic Growth
Environmental Protection Gains Momentum
Growth Workshop Explores Diversification
Government Bond Issuance Grows
Vietnam-Cambodia Relations Reset
Agricultural Value Chain Development Needed
Chinese Investment Trends Shifting
Sustainability Forum Tackles Climate Challenges
Biodiversity-Linked Bonds
Border Tensions Flare Up with Thailand
Bakong Cross-Border Phase 2 Launched
Tourism Recovery Shows Strong Momentum
Online Scam Crackdowns Getting Results
Cambodia's Commission for Combatting Online Scams has run its first major operation, targeting centers in Mondulkiri province. Authorities say they arrested 258 foreigners, including 247 Chinese nationals, with 14 suspects facing investigation for charges of violence and forced labor. Similar operations in Poipet resulted in the arrest and repatriation of 119 Thai nationals, with 15 identified as organizers of online gambling platforms. Thai-Cambodian police collaboration continues to target cross-border call center scams, and officials say (optimistically?) that they expect to eliminate these networks by year-end.
Read more: Khmer Times (Initial Crackdown), Khmer Times (Continued Operations), Nation Thailand (Thai-Cambodian Collaboration), UCA News (Graft Allegations)
LDC Graduation Challenges Economic Outlook
Paradoxically, graduation from Least Developed Country status in December 2029 could reduce GDP growth by up to 1.5% and eliminate 165,000 jobs, according to UNDP. They are warning that the change could particularly impact women as the country loses trade preferences for exports including garments, rice, and bicycles. To mitigate these challenges, they say Cambodia needs to manage trade support phase-out, improve creditworthiness, diversify the economy, develop higher-value exports, and attract a greater variety of industries.
Read more: Fibre2Fashion (Economic Impact), Khmer Times (Employment Effects)
ASEAN Wants South China Sea Code of Conduct
ASEAN is pushing to finalize negotiations on the Code of Conduct in the South China Sea (SCS) by 2026, with Secretary-General Kao Kim Hourn leading the charge. The agreement, building on the 2002 Declaration on Conduct of Parties, is intended to create a framework to manage maritime disputes between ASEAN members and China. The framework will be based on the 1982 UN Convention on the Law of the Sea.
Read more: Khmer Times
Public Debt Still Manageable at $12 Billion
Total public debt rose above the $12 billion mark last year, with 99% of that amount being external debt. The debt is mostly USD (49%), followed by SDR (18%), Japanese yen (10%), Chinese yuan (10%), and the euro (8%). Metrics to keep an eye on are still within what are thought to be sustainable ranges, with a debt-to-GDP ratio of 19.3% well below the 55% danger mark. Cambodia was able to ink $1.8 billion in new loan agreements in 2024, with 67% set to fund infrastructure projects. While the government maintains debt sustainability, tail risks include rising service costs and foreign currency exposure.
Read more: Cambodia Investment Review (Detailed Analysis), Phnom Penh Post (Debt Structure)
Infrastructure Plans Draw Korean Interest
Korea Expressway Corporation says it wants in on two major highway projects: a 400-km route linking Phnom Penh, Siem Reap, and Poipet valued at $4.2 billion, and a 135-km Phnom Penh-Bavet route estimated at $1.7 billion. The projects are part of Cambodia's Comprehensive Intermodal Transport and Logistics System Master Plan 2023-2033, which is expected to build nine expressways with a total investment of $13.6 billion. Four new international border crossings are also planned through a project funded by the Asian Infrastructure Investment Bank.
Read more: Khmer Times (Korean Interest), Business Korea (Partnership Details), Construction Property (Border Crossings)
AI Strategy for Economic Growth
A national Artificial Intelligence strategy is being contemplated, with a focus on eight arenas: productivity, research, human capital development, digital infrastructure, international cooperation, public sector integration, AI literacy, and inclusive innovation. The strategy, led by NCSTI, MISTI, and UN-ESCAP, has projected that AI could add $1 trillion to the ASEAN economy by 2030.
Read more: Khmer Times (Strategy Focus), Khmer Times (Implementation Plan)
Environmental Protection Gains Momentum
The Ministry of Environment has identified more than 100 companies responsible for water pollution, and has put enforcement measures in place as a response. Companies are being ordered to install wastewater treatment systems, with the most severe polluters facing penalties or closure. The ministry is demanding self-monitoring equipment in factories to enable automatic data transmission. A new three-year collaborative project with JICA is developing monitoring and management systems for surface water and wastewater.
Read more: Khmer Times (Enforcement Actions), Khmer Times (Japanese Collaboration), Khmer Times (Ministry Statement)
Growth Workshop Explores Diversification
A recent economic workshop brought together Harvard Growth Lab founder Professor Ricardo Hausmann with Cambodia's top leadership, including Deputy PM Sun Chanthol and Permanent Deputy PM Vongsey Vissoth. The session, organized under CAPRED with Australian Ambassador Derek Yip, was intended to bring a spotlight to economic diversification by using Growth Diagnostic and Economic Complexity methodologies.
Read more: Cambodia Investment Review
Government Bond Issuance Grows
The government raised $74.86 million through government bond issuance in 2024, reaching 68% of its legal ceiling for public investment financing. The bonds, with maturities from 1 to 15 years and coupon rates between 3.50% and 4.58%, will support economic growth, fund infrastructure development, and reduce reliance on foreign loans. The government plans to expand the bond program to $125 million in 2025, with a possible issuance of up to $1 billion over five years. The National Bank also recently expanded market access by allowing non-bank financial institutions to trade government securities.
Read more: Khmer Times
Vietnam-Cambodia Relations Reset
Vietnam and Cambodia saw high-level meetings between Cambodian PM Hun Manet and Vietnamese PM Pham Minh Chinh last month. The countries agreed to grow trade to $20 billion and move forward with several major infrastructure projects, including an expressway (and possible railway) linking Ho Chi Minh City and Phnom Penh. The diplomatic discussion was focused on economic integration, security cooperation, and infrastructure development while addressing historical tensions. Both nations committed to protecting "legitimate interests" while diversifying international relationships.
Read more: Fulcrum
Agricultural Value Chain Development Needed
Cambodia's trade with Vietnam reached $7.08 billion in January-November 2024, with Cambodia mostly sending raw agricultural materials that Vietnam processes into higher-value products for re-export. Cambodia's agricultural sector has several challenges including low farmer selling prices, high production costs, and a heavy reliance on imported fertilizers. The country's processing capacity is hampered by high electricity costs, lack of specialized training, and limited industrial development. Experts say that a reduction in electricity and logistics costs, along with more investment in processing technology, and the development of a skilled workforce, will be necessary for longer-term competitiveness.
Read more: Cambodia Investment Review
Chinese Investment Trends Shifting
The Ministry of Economy and Finance has seen a shift in creditor rankings, with South Korea becoming the top lender at $264.3 million in 2024, followed by Japan ($237.9 million) and France ($205.1 million). China, surprisingly, provided no new loans in 2024, in contrast with the more than $300 million committed in 2023. Chinese investment has been maintained in some sectors, however, with a delegation of 19 Chinese firms from Yunnan province keen to explore cashew sector opportunities, for example. China remains Cambodia's leading investor, accounting for about 50% of total investment capital last year, with bilateral trade reaching more than $15 billion, up 23% year-over-year.
Read more: Khmer Times (Debt Rankings), Khmer Times (Cashew Sector Interest)
Sustainability Forum Tackles Climate Challenges
Cambodia hosted a Future Forum to talk about development of sustainable rice food systems, bringing together stakeholders including GIZ, CARD, MAFF, and the European Union. The Better Rice Initiative Cambodia and Accelerating the Scaling of Low Emissions Rice project were specifically mentioned as important initiatives. Cambodia has committed to reducing agricultural emissions by 34.4% by 2030, in line with other regional commitments.
Read more: Krishak Jagat
Biodiversity-Linked Bonds
Asean+3 Macroeconomic Research Office (AMRO) has recently published commentary titled ‘Bridging the Biodiversity Financing Gap: Unlocking Private Capital Through Market-Based Solutions.’ With global biodiversity protection apparently requiring $680-$950 billion annually, biodiversity-linked bonds are being reported as a mechanism to draw private capital by linking financial returns to specific biodiversity outcomes. For Cambodia, the bonds could help balance urban development with environmental preservation while supporting sustainable tourism initiatives. Implementation would require policy frameworks, public-private partnerships, and integration of biodiversity considerations into urban planning, but it’s being touted by AMRO as a way forward.
Read more: Khmer Times
Border Tensions Flare Up with Thailand
Prime Minister Hun Manet made a warning to Thailand regarding military action after a confrontation between Cambodian and Thai soldiers near the disputed Ta Moan Thom temple. While saying that Cambodia continues to have a preference for peaceful resolution through legal channels, Hun Manet made clear that Cambodia stands ready to defend its territory with military force if necessary. The situation echos previous tensions over the Preah Vihear temple border dispute.
Read more: Radio Free Asia
Bakong Cross-Border Phase 2 Launched
The National Bank of Cambodia and UnionPay International have started phase two of Bakong cross-border payments that allows Cambodians to conduct cross-border transactions through UnionPay QR Codes in China and WeChat Pay QR Codes. ABA Bank has unveiled "Navi," Cambodia's first AI-powered virtual banking assistant, offering 24/7 support in Khmer, English, and Chinese.
Read more: Asian Banking & Finance (Cross-Border Payments), Cambodia Investment Review (Virtual Assistant), Cambodia Investment Review (Digital Trust Initiative)
Tourism Recovery Shows Strong Momentum
Just over 600,000 international tourist arrivals were reported in January, a 13.3% year-over-year increase. Air arrivals totaled 245,403 (+18.8%), while land and waterway arrivals reached 366,491 (+9.8%). Thailand led source markets with 189,343 visitors, followed by Vietnam, China (+45.5%), and Russia (+96.9%). The Tourism Ministry wants to see as many as 7.5 million international visitors in 2025. The Angkor Archaeological Park welcomed 146,140 foreign tourists, generating nearly $7 million in ticket revenue. Cambodia's participation in ITB Berlin 2025 resulted in nearly 500 meetings with international buyers, mostly from Europe.
Read more: Khmer Times (Visitor Statistics), Phnom Penh Post (Berlin Expo)
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