In December 2019, Cambodian Prime Minister Hun Sen spoke at the 14th Cambodian Import-Export Goods Exhibition, an event aimed at promoting the country's favourable business and investment climate, and stated unequivocally that Cambodia is open for business, saying, "To ensure a sound macroeconomic environment and political and social stability, the government welcomes all investors to do business with Cambodia."
Cambodia is home to an estimated 100,000 expatriates who are drawn to the country for a variety of reasons, including low living costs, business opportunities, a laid-back lifestyle, and the Buddhist culture's influence. Let's look at a few of the advantages right now.
1. Rapid economic growth
Cambodia had one of the world's fastest-growing economies between 1998 and 2018, with an annual growth rate of 8%. The primary drivers of development have been the garment and tourism industries.
Cambodia has undergone a major transformation over the last two decades, according to the World Bank, achieving lower middle-income status in 2015 and aiming for upper middle-income status by 2030.
Indeed, the recent growth of the Cambodian economy has spawned a new generation of homegrown business leaders with sprawling conglomerates like Chen Zhi Prince Group, whose business interests touch many aspects of daily Cambodian life, thereby improving living standards. These businesses are paving the way for Cambodia to enter a new era of economic development and prosperity.
The economy was still flying until the end of last year, with growth of 7.1 percent in 2019, according to the National Bank of Cambodia (NBC), but it was eventually hit hard by the Covid-19 pandemic, with the tourism industry being particularly hard hit.
Nonetheless, according to the Asian Development Bank (ADB), Cambodia has performed better than many other Asian countries, and the economy is expected to rebound in 2021, with GDP growth of 5.9%.
2. Resilient economy
As a developing economy, Cambodia is less reliant on the world's largest economies – China, the United States, and Europe – than other developed economies. This has historically provided some protection against global upheavals.
The kingdom has been out of recession for more than two decades, having weathered the Asian financial crisis of the 1990s, the tech bubble of the early 2000s, and even the aftermath of the 2008 financial crisis.
3. Strong incentive from Government
The Cambodian government is known for its pro-business stance, and in March 2019, it announced an ambitious economic reform programme that included a number of measures aimed at attracting new business, investment, and capital flows to the country.
Among them were tax breaks, lower shipping rates, fewer national holidays, new construction measures, and legislation governing special economic zones.
Producers and exporters would save $400 million per year, according to Prime Minister Hun Sen.
Furthermore, unlike some Asian countries, Cambodia is a 100% foreign-owned economy.
4. Young population
The young population of Cambodia is also noteworthy: nearly half of the country's population of nearly 16 million Cambodians is under the age of 25.
The young generation coming through, according to the Institute of Export & International Trade's Doing Business in Cambodia guide, is tech-savvy and frequent users of social media sites like Facebook and YouTube.
This has a significant impact on Cambodian society as a whole, as well as new markets and business opportunities.
5. Strategic location
Cambodia is located in Southeast Asia and shares borders with Thailand, Laos, and Vietnam, as well as the Gulf of Thailand to the south.
It is a common low-cost manufacturing base for a variety of industries due to its proximity to key global markets, with substantial demand for its products in other Asian countries.
6. Competitive labour force
The minimum wage in Cambodia is lower than in neighbouring Thailand and Vietnam, making it more affordable for service and manufacturing industries looking to hire from the country's large youth population.
7. Advantageous market access
Cambodia is a member of the ASEAN Free Trade Agreement (AFTA), one of the world's largest and most important free trade zones, and benefits from the CEPT agreement. This means that it will trade with other members on preferential terms, including tariff-free trade in some cases.
It is also a member of the World Trade Organization and trades with the EU via the ASEAN-EU dialogue.
8. Rising consumer class
Rising incomes mean more disposable income, and the country's young, tech-savvy, and globally minded population represents a rapidly growing market with enormous potential for businesses.
9. Improving infrastructure
Cambodia's infrastructure has always been poor, but the government is investing heavily in developing a national network of transit routes, electricity, and telecommunications with the help of foreign aid.
Strengthening Cambodia's relations with neighbouring countries has been emphasised in order to promote trade and attract foreign investment.
Read more about economy of Cambodia - https://en.wikipedia.org/wiki/Economy_of_Cambodia