Why Cambodia could be the ‘Asian Tiger of the 21st Century?

• 3 August 2022
• Local News
• 2514 Views

Chinese and American analysts have forecasted that Cambodia could have a chance to become the “tiger of Asia of the 21st century” in the near future, after the end COVID-19 pandemic and global uncertainty.

The forecast was made by the President of the American Chamber of Commerce and Group CEO of Cambodian Investment Management Holdings Anthony Galliano and CEO of Prince Real Estate Edward Lee.

Both experts cited 9 main reasons to support their predictions:

1) The economic growth rate of Cambodia during the past 5 years before the pandemic is in line with the economic growth trajectories of Singapore, Hong Kong, Taiwan, and Korea between 1960 and 1990, which was 6% per year. Economic growth at this rate has made these countries the tigers of Asia, and so does Cambodia.

Cambodia’s GDP growth in 2022 is projected at 6.3%, according to the S&P Global Rating, which is one of the highest projections in the region. (Read more)

2) The Cambodian government has been implementing master plans and agendas to boost the economy; for instance, the mega plan to transport project to transform Sihanoukville into a multi-purpose special economic zone, the development of many mega infrastructure projects as airports, PP-SHV expressway, among others. This will lower the cost of logistics in Cambodia, which is a highly-competitive factor.

3) To date, there is no demarcation of agricultural or industrial land in Cambodia yet. This factor makes it easy for investors to make real estate transactions at a lower cost. Besides, the fact that land price in Cambodia is relatively lower compared to other neighbouring countries such as Vietnam and Thailand will allow investors to enjoy the low cost of settling factories or companies.

4) New investment laws and incentive policies also play an important role in attracting investors. For example, the policy that allows a foreigner to 100% owns a private company.  This is deferred to Thailand which requires Thais to have at least 51% of the total share in the company. Policies such as minimum capital to start a company as slow as US$1,000 and low corporate taxes are also attractive factors.

5) Being a highly dollarized economy makes Cambodia enjoy stabilized exchange rate, which preferable incentive to the export-import businesses.

6) Cambodia has become a member of free trade agreements and Regional Comprehensive Economic Partnership, especially with China.

7) Cambodia has a large working-age population, which is a driving force of the economy. These human resources are improving in quality thanks to a better education system.

8) Cambodia is more accessible to foreigners with better and more diverse tourism, entertainment, and hospitality services. This factor not only attracts tourists but also makes investors want to live and work in Cambodia.

9) Compared to all countries in Southeast Asia, Cambodia is considered an investment-friendly country. Many laws and regulations are in the stage preparing, which is highly favorable and flexible compared to other developed countries.

• Analysis