Cambodia 20241209: Striking, Transmundane, Perceptive
Mekong Memo Cambodia Weekly: Business, politics, finance, trade & legal news.
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Headlines:
Investment Surge a Boon to Economic Growth
Air Travel Recovery Takes Off
Consumer Market Set for Strong Growth
Funan Techo Canal Project Raises Questions
Tax Agreement Boosts Regional Trade
Laos and Cambodia Double Down On Partnerships
Chinese Partnerships Deepen
Financial Hub Aspirations on the Rise
Labor Rights Under Pressure
EU Statistics Partnership Launches
US Embassy Auction of Goods
Border Talks Show Limited Progress
Kite Tradition Revived to Celebrate Heritage
Investment Surge a Boon to Economic Growth
Cambodia has drawn $6.44 billion in fixed-asset investments through 389 approved projects during the first 11 months of 2024, creating 305,000 jobs. November alone brought 43 projects worth $940 million. Vietnam led foreign investment at 51%, followed by China at 24%. Projects run the gamut from garment manufacturing, travel goods, footwear, hotels, power generation, ports, solar plants, agriculture, amusement parks, and telecommunications. The Council for the Development of Cambodia has approved a number of major projects including a telecom expansion, a five-star hotel in Svay Rieng, and manufacturing facilities in multiple provinces.
Read more: The Star (Investment Overview), Khmer Times (November Projects)
Air Travel Recovery Takes Off
Air passenger traffic reached a tally of 5 million passengers from the beginning of the year though the end of October 2024, a 21% year-on-year increase. Airlines operated 50,000 flights to Cambodia's three international airports, up 14%. Air cargo volume grew 37% to 63,000 tonnes. The new Chinese-invested Siem Reap Angkor International Airport, featuring a 3,600-meter runway capable of handling most aircraft types, has positioned the country for even greater numbers of international flights and tourism growth.
Read more: The Star
Consumer Market Set for Strong Growth
The consumer market will reach $16 billion by 2025, driven by urbanization and rising disposable incomes. The FMCG sector is now contributing 25% to GDP, employing 500,000 workers directly. With 80% smartphone penetration, e-commerce FMCG sales are growing at a 20% annual clip. Consumer behavior is quickly changing as the middle class expands and urban populations increase.
Read more: The Star
Funan Techo Canal Project Raises Questions
The $1.7 billion Funan Techo Canal project, connecting the Mekong and Bassac rivers to the Gulf of Thailand, faces scrutiny over financing and environmental impact. The 180-kilometer waterway aims to reduce Vietnamese port dependence. China Road and Bridge Corporation leads construction, with completion set for 2028. Government projects $88 million in first-year freight earnings. The U.S. and Vietnam express concern over military implications.
Read more: Lowy Institute
Tax Agreement Boosts Regional Trade
A double taxation agreement with Laos marks Cambodia's 12th such treaty. The agreement eliminates income tax duplication and prevents tax evasion between the nations. Cambodia continues negotiations for similar agreements with Japan, Myanmar, Morocco, UAE, France, and Qatar.
Read more: Fibre2Fashion
Laos and Cambodia Double Down On Partnerships
Cambodia's King Norodom Sihamoni will visit Laos in January 2025. National Assembly President Khuon Sudary met with Lao Prime Minister Dr. Sonexay Siphandone at the National Assembly Palace, following up on their earlier discussions at AIPA-45. During the meetings they reaffirmed their commitment to work. Agreements were signed on avoiding double taxation, cultural exchanges, and agricultural co-op. Both nations said they’d work to grow trade, tourism, and energy cooperation while keeping border relations peaceful. The visit also laid groundwork for Cambodia’s upcoming state visit to Laos and mutual support in ASEAN and international forums.
Read more: Asia News Network, Khmer Times (Royal Visit), Khmer Times (Leadership Meeting)
Chinese Partnerships Deepen
Cambodia's ties with China continue to strengthen across the board. The nations have signed a new broadcasting cooperation agreement, while Chinese tourist arrivals jumped 52.5% to 691,736 visitors in January-October 2024. Former PM Hun Sen's recent China visit included discussions about the $1.7 billion Funan Techo Canal project, though China's official statements remain silent on support for the waterway.
Read more: Khmer Times (Broadcasting), Xinhua (Tourism), SCMP (Funan Techo)
Financial Hub Aspirations on the Rise
Cambodia's economic performance is drawing attention from financial experts. The IMF is projecting 6.1% growth in 2024, leading Southeast Asia. Singapore Global Trust CEO Ong Chee Keong is saying that this growth is setting Cambodia up as a potential regional financial hub.
Read more: Cambodia Investment Review
Labor Rights Under Pressure
The Phnom Penh Municipal Court has upheld an 18-month jail sentence against Morm Rithy, vice-president of the Cambodian Labor Confederation. The verdict stems from a two-year-old social media post about human trafficking, raising questions about labor rights and freedom of expression.
Read more: UCA News
EU Statistics Partnership Launches
The EU has launched a Twinning Project with Cambodia's National Institute of Statistics on December 5. The project, involving Team Europe representatives from Italy, France, Poland, and Lithuania, is intended to help improvement national statistical capabilities for evidence-based policymaking.
Read more: Khmer Times
US Embassy Auction of Goods
The U.S. Embassy in Phnom Penh announced an online auction of used items running December 17-24, 2024. Items will be sold as-is to highest bidders through online-auction.state.gov/km-KH. Buyers must complete payment within 48 hours and handle all duties, taxes, and removal costs.
Read more: U.S. Embassy
Border Talks Show Limited Progress
The Joint Technical Committee for territory dispute talks with Thailand under the 2001 Thai-Cambodian MoU 44 remains in formation stages. Thai opposition groups submitted a 100,000-signature petition demanding cancellation, claiming sovereignty concerns over Koh Kut island. The area contains potential oil and gas reserves. Government delays reflect attempts to manage protest risks.
Read more: Khmer Times (Committee Status), The Nation Thailand (Opposition), Bangkok Post (Transparency)
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap with a less business-focused article.
Good news for pageant watchers: Miss Mera Cambodia 2024 has been crowned.
Kite Tradition Revived to Celebrate Heritage
The Kleng Ek Festival in Siem Reap, scheduled this year for December 27-29, will be a grand display of Cambodia's ancient kite-flying tradition tied to rice harvest rituals. Hosted at the former Siem Reap International Airport, the event is expected to feature cultural performances, exhibitions, and historical insights. Intended to preserve Khmer heritage and attract tourism, the festival shows off a practice depicted in temple inscriptions dating back as far as 972 AD. Officials see the event as a cultural highlight, and are calling for UNESCO recognition of the event.
Read more: Khmer Times
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