Cambodia 20240205

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

Feb 05, 2024

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Headlines:

Global Trade Partnerships for Growth

Cross-Border Task Force to Combat Air Pollution

Beyond Garments to Tech and Autos

Rise in Private Security Personnel

Homegrown Car Brand, Sort Of…

Stabilizer: NBC Responds to Inflation

Sihanoukville SEZ Continues Growth

Funan Techo Canal

Financial Reporting With New ACAR Directives

Ghost Buildings Need More Money

Urgent Need for a Deposit Protection Scheme

Real Estate Sector 2024 Perspective

Cambodia's Economic Outlook

Talking Up “Khmeritude”

Phnom Penh Captured in 4K Drone Video

Global Trade Partnerships for Growth

Cambodia continues to actively pursue economic relationships with global partners, including ASEAN, the EU, Georgia, Japan, France, Australia, the United States, and Canada. Highlights in the press this week include exploring new growth areas with the EU, strengthening bilateral ties with Georgia, and attracting more investments from Japan, France, and the US. Despite a sharp downturn in trade with Canada, the Cambodian Chamber of Commerce remains positive on growth prospects and has even recently opened a trade representative office in Toronto .

Read more: Khmer Times (ASEAN-EU), Khmer Times (Georgia), Phnom Penh Post (Japan), Khmer Times (French investment), Khmer Times (Australia Cooperation), Khmer Times (US Cooperation), Phnom Penh Post (Canadian Trade)

Cross-Border Task Force to Combat Air Pollution

Cambodia and Thailand have (again) claimed to be working jointly to tackle air pollution, focusing on the transboundary haze from PM2.5 particles. A hotline and a joint committee will be established to exchange data and resources, with an objective of mitigating the effects of pollution on public health and the environment (and probably some of the increasingly boisterous public complaint, as well).

Read more: Khmer Times (Co-op Details), Nation Thailand (Joint Efforts)

Beyond Garments to Tech and Autos

Cambodia is expanding its industrial landscape beyond traditional garment production (still a backbone of the economy) to include non-garment sectors like electronics and vehicle assembly, leveraging skilled labor and technology. This comes as there is a growing recognition that a reliance on garment exports, which saw a decline in 2023, is probably not sustainable, long term. Last year, exports of non-garment products surged by 56%. and the government would like to maintain that trajectory to attract more investment and improve the country's industrial self-sufficiency.

Rise in Private Security Personnel

The private security sector has grown by more than 7% in 2023, reaching 31,796 guards, with women making up 2,507 of the workforce. The increase comes along with a broader expansion in the industry, including 23 new companies and an increasing number of training programs. There are calls for continued professional development and integration of retired police officers into private security roles as the private security business is seen by many as useful in support of the regular police force.

Homegrown Car Brand, Sort Of…

GTV Motor is heralding Cambodia’s entry into car manufacturing with an expected 2024 factory opening. The venture will begin with production of five models, including SUVs and a minivan. Supported by the government and the royal family, GTV Motor hopes to democratize vehicle ownership in Cambodia, positioning itself alongside international brands while presenting a line-up of “affordable cars” for the domestic market. While this new project is being reported as “Cambodia’s first car brand,” it seems that all the models are rebadged Chinese designs.

Stabilizer: NBC Responds to Inflation

Facing a projected inflation rate of 2.5% in 2024, the National Bank of Cambodia (NBC) is committed to maintaining the stability of the riel's exchange rate. With Cambodia's GDP expected to grow by as much as 6.4% due to a surge in tourism, manufacturing, and agriculture, the NBC's stated monetary policy is to safeguard the national currency's purchasing power.

Sihanoukville SEZ Continues Growth

The Sihanoukville Special Economic Zone (SSEZ) has emerged as an important force in national economic growth, with trade exceeding $3.3 billion in 2023, a ~35% increase from the previous year. Hosting 231 companies from 10 countries, the SSEZ benefits from favorable laws, proximity to the Sihanoukville Autonomous Port, and investment terms that are somewhat more favorable for investors. Recent talk has focused on the importance of competitive energy prices to further improve Cambodia's market appeal.

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