Cambodia is emerging as one of the bright spots towards the end of the second year of the pandemic. Here are ten reasons why Cambodians should be optimistic for a bright start to the new year in a few months.
1. Cambodia will soon vaccinate its population
After a shaky start to the year with an outbreak in February that took several months to overcome, Cambodian cities are opening up once again.
That’s in no small part to the vaccination efforts by the government and private companies. As of August 23, Cambodia has completed 17.3 million doses covering nearly half of the population, according to Our World in Data. Vaccinations have begun for children aged between 12 and 17 while the administration of a 3rd booster dose of AstraZeneca vaccine began on August 8. The list of vaccination recipients includes 53 centenarians as well!
In 2022, Cambodia could soon be open for travel and life will go back to the pre-pandemic normal.
2. The Cambodian economy will bounce back
The Cambodian government has spent a considerable amount of money to ensure that the economy does not fall into a deep recession. It has spent more than $1 billion, most of it towards the Covid-19 Cash Transfer Programmed (CCTP) to support poor families. Nearly 2.7 million people have benefited from the CCTP so far.
A few months back, the Asian Development Bank had stated that Cambodia’s economy would recover and then accelerate in 2022. In July, the Manila-based organization revised that report but did not make too many changes to Cambodia’s economic outlook.
Cambodia’s two main sectors – garment (and footwear exports) and tourism – are both expected to bounce back in the coming years. Meanwhile, the government’s long-term plans to diversify the country’s economic base could finally pay dividends as Sihanoukville, a deep-water port, and Siem Reap, the site of the famous Buddhist temple complex known worldwide as Angkor Wat, are experiencing substantial real estate, industrial and development activity.
3. Cambodia will benefit from China’s rise
As key trading partners, Cambodia and China are closely interlinked with one another.
At the end of July, the two countries pledged to increase trade by 25% to $10 billion within two years. A free trade agreement signed with its northern neighbor will also make it easier for Cambodian businesses to export more than 300 products. In much the same way, Cambodia stands to benefit from being a part of the Regional Comprehensive Economic Partnership (RCEP) that will make it easier for Cambodian products to find a market within the 15 Asia Pacific countries that signed on in 2020.
With China the leading economic power, it’s likely that Chinese companies will establish a base in Cambodia for their ASEAN operations in the coming years. The Chinese economy has bounced back (albeit in an uneven fashion) and is expected to anchor growth in Asia.
4. Cambodia is attracting international brands
Gone are the days when Cambodia was once regarded as a quaint backwater where one would struggle to find well-known brands as Chili’s, Tealive, H&M, Long John Silver’s, Paris Baguette, Papa John’s, Maserati and 7-Eleven are going to soon establish a presence in the country.
This would likely boost tourism and make it easier for Cambodia to attract talented foreigners who would likely be keen to work in a dynamic and enterprising market. Next year, be prepared to witness rapid modernization in Cambodia.
5. Cambodian real estate is heating up with world-class developments underway
For example, Ream City, a city-within-a-city project built on reclaimed land near the airport, was launched earlier in the year and will be one of the first major sustainable development projects in Cambodia. Potentially housing 130,000 residents, the project, an initiative by Canopy Sands Development, a member of the Prince Holding Group of companies, is expected to attract $16 billion in investment and will follow principles of sustainable design like environmental protection, resource recycling, environment-friendly vehicles, and infrastructure development.
Both industrial and commercial development will help deal with the rapidly increasing population in major cities like Phnom Penh (the capital is set to double by the end of the decade).
This will boost the Cambodian property market attracting investors and there will be a need for real estate developments that meet the needs of the emerging middle class.
6. There are new and improved companies in every sector
Prince Holding Group, led by Neak Oknha Chen Zhi, is one of the many enterprises taking advantage of the growing Cambodian opportunity. Chen Zhi was recently recognized as the Entrepreneur of the Year (Conglomerates) at the 2021 International Business Awards. Under Chen Zhi (Cambodia), Prince Group has invested more than $2 billion in projects over the past decade across real estate, consumer services, and financial services.
That means that the economy will see renewed dynamism and competition that will open up employment opportunities, give consumers much better choices and bring in the best products and services. The top companies in Cambodia will need to raise their game and meet the increased expectations of Cambodians in order to ensure they don’t fall behind as well.
7. Cambodia will be under the spotlight next year as the ASEAN chair
The pandemic will continue to play a major part in everyone’s lives in Southeast Asia next year. As such, Cambodia can play a key role as the 2022 chair of the Association of Southeast Asia Nations (ASEAN). By successfully combating the epidemic and showing signs of early recovery, Cambodia will be able to share its lessons and also act as a safe harbor (alongside Singapore) where political and business leaders will be able to make the decisions to help ensure Southeast Asia’s eventual recovery.
Expect Cambodia to become more popular within the region and elsewhere as the small country punches above its weight in regional and international affairs.
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8. Cambodia is moving on slowly from its war-torn, poverty-ridden past
While the ravages of the Vietnam War is undeniable and the country’s links to a genocide continue to impact everyday life, there is optimism and hope towards the future for the first time in decades.
Two decades of continuous growth suffered a minor setback with the pandemic but Cambodia took it in its stride and citizens have soldiered on. It must be remembered that the poverty rate in Cambodia fell from 53.2% in 2004 to 10% before the pandemic in 2019. While it’s true that the pandemic will likely mean an increase in poverty, it’s probably going to be a temporary reversal of fortune. The fundamental reasons behind Cambodia’s recent economic growth have not changed and foreign investment continues to pour into the country.
9. Cambodians are becoming more educated
The Ministry of Youth, Education, and Sports has declared that it wants more than 16% of graduating students to enroll and complete university by 2023 with third studying science, technology, engineering, and medicine (STEM) courses, according to the 2019-2023 Education Strategic Plan.
That’s a pretty impressive proportion of the graduating cohort for a country that, until quite recently, could not get its students to complete high school. Improved job prospects coupled with improved infrastructure in cities have seen an increasing number of Cambodians avoid traditional activities like farming and manual labor and move to the cities where they look for (and often find) well-paying jobs.
Prince Group has partnered with Caring for Cambodia, a leading education charity, to help Cambodian students get the necessary skills and knowledge for the post-pandemic job market. Moreover, it has also launched Prince Horology Vocational Training Center, a watchmaking school built to international standards, that was re-opened recently to increase the diversity of educational opportunities in the country.
10. Garment workers are getting back to work
Finally, garment exports have resumed in tandem with the economic recoveries (and rapid uptake of vaccinations) in key markets like the United States and the European Union. More than $117 million were lost in wages during Cambodia’s lockdown in April and May, according to the Clean Clothes Campaign. Many companies that hired garment workers in Myanmar are now opening factories in Cambodia instead.
Because of these reasons (and more), we anticipate that Cambodia will be able to bounce back strongly and likely be one of the best economic surprises that managed to brave and impress observers despite the COVID-19 pandemic.