To celebrate Indonesia’s 76th Anniversary of Independence from August 17 – 24 Cambodia Investment Review will be highlighting business and investment opportunities for Indonesian’s in the Kingdom of Cambodia.
Dear Cambodia Investment Review readers,
2021 marks the 76th Anniversary of the Independence of the Republic of Indonesia. In the past, we celebrated it in a festive way with a lot of joyful and fun competition and gathering, in which we also invited our Cambodian dignitaries and friends. However, it has been two years since the pandemic knock on our door, that turn almost every bit of our life into “new normal”. We have to drastically reduce our face-to-face meeting, stay at home almost all time, and conduct business and meeting online.
This year Indonesia’s journey is still marred with conditions of immense pressure and uncertainty due to the Covid-19 pandemic. This has had a tremendous impact on health, social and economic conditions both at national and global level. If the period before the independence, Indonesian people had to unite against foreign colonialism, now the Indonesian people must unite to mobilize strength to defeat the invisible enemy, the COVID-19 virus with its various variants. If in the past unity was done physically to repel colonialism, now it is the unity of determination that is absolutely needed, not physical proximity, to defeat this newest enemy. The support and enthusiasm from the people of Indonesia and friendly countries is an important capital for Indonesia to get through these stressful times.
Quoting the speech of the Indonesian Minister of Finance, Dr. Sri Mulyani Indrawati, economic growth in 2021 will be determined by several main factors, namely:
1) successful handling of the Covid-19 pandemic, including vaccine research efforts;
2) conditions for recovery in global economic performance, mainly influenced by the handling of the Covid-19 pandemic, geopolitical factors – the dynamics of relations between America and China, as well as commodity prices.
3) structural reform efforts to increase ease of doing business and attract investment; and
4) support for countercyclical fiscal policy, including through the continuation of the national economic recovery program (PEN).
Amidst the background of the current situation, the government of Indonesia revised the target of economic growth of 2021 to 3.7% to 4.5%. The decline in the economic growth projection is influenced by the implementation of emergency community activity restrictions (PPKM) in Java to Bali. This illustrates that Covid-19 will continue to be a factor that determines the dynamics of economic development in a country.
Creating peace, prosperity, stability and growth.
The fundamental principle of establishing relations with other countries is to creating peace, prosperity, stability and growth. A long term and stable relationship, including economic relations with other countries remains of utmost importance for the Indonesia to grow in various aspects. It has been 62 years since Indonesia and Cambodia officially have the diplomatic relations. And during this current decades, economic ties play significant role in these bilateral relations. In trade sector, despite the Covid-19 pandemic that has been affecting globally, Indonesia and Cambodia still maintain a strong trade balance. Based on the data from the Ministry of Trade of the Republic of Indonesia, from 2016 – 2020, the trend of trade balance between both countries are around average 7.53%. In 2020, the total trade volume still reached the amount of $588.65 million. Although the trade balance decreases 10.96% compared to the same period in 2019 ($661.11 million), this is majorly caused by the ongoing pandemic.
In the tourism sector, based on the data from the BPS-Statistics Indonesia, there were 13,843 tourists from Cambodia visiting Indonesia (increase 64.1% from 2018) and 66,804 tourists from Indonesia visiting Cambodia (increase 19.8% from 2018). This significant increase of tourists from both countries were largely due to the ease of connection through direct flight. In 2020 and mid-2021, due to the pandemic, this amount decreases. In investment sectors, Indonesian companies are present in the field of pharmacy, hospitality, and also service. While there are no available data yet for the Cambodian companies in Indonesia, there are still space to explore.
Following the recent bilateral meeting between President Joko Widodo and Prime Minister Hun Sen at the sideline of the ASEAN Leaders’ Meeting, the Embassy of the Republic of Indonesia will organize Indonesia – Cambodia Economic and Development Forum (ICEDF) 2021. The forum aimed to discuss, explore the potentials and opportunities, as well as to follow up on the potential for further collaboration in economy and development between Indonesia and Cambodia.
The forum will also seek potential joint funding for the bilateral collaborative project with third parties/countries. The activity also served as a virtual exhibition facility for strategic, construction, projects, special economic zones of Indonesia and Cambodia as well as to explore business matching in the economic and development sectors.
62 years since Indonesia and Cambodia opened the diplomatic relations
In 62 years since Indonesia and Cambodia opened the diplomatic relations, both countries have achieved significant progress in bilateral relations. One of them is the women empowerment, be in politics, economy or socio culture. Both countries have exchanged ideas and experiences in nurturing women entrepreneurship. Nowadays, women are engaged in entrepreneurship activities. They become independent by taking the several enterprises as business of their own. Women entrepreneurs not only entered into business in a small way but also ventured into starting and managing large enterprise on a professional line, and have been able to sustain and survived in the competitive environment.
As 51.3% of the total population in Cambodia are women, and 65% of business in Cambodia run by women, women entrepreneurship has important way in developing Cambodia’s economy. While in Indonesia, women owned 60% of all registered MSMEs. For women, entrepreneurship becomes a solution from the high unemployment, providing economic opportunity to support their livelihood with the flexibility to also take care of domestic care work. The benefits of women entrepreneurship goes even broader, as they are more likely to provide employment for other women and they contribute significantly to the Indonesian economy.
In order to connect and explore various collaborations between Indonesian and Cambodian women entrepreneurs as well as share their experiences as driving engines and contributions to national economic growth, the Embassy has organized a Webinar titled “Indonesia-Cambodia Women as Drivers for Economic Growth”. It is acknowledged that women and men are equally capable in business as long as there is equal access and opportunity to do the business. It is also important for women entrepreneurs to be tech-savvy and digital literate to expand their business beyond boundaries.
Women is torchbearer to create bright future generation. This utmost important role should be nurturing from the start by sharing experiences on early education and family education. It is the main reason we create a short course for women, in particular Muslim women of Cambodia. We believe that the development of human capital, the promotion of moderate Islam and women empowerment is important since it will create greater impact and long-lasting influence for generation to come. In wider perspective, it will also support the creation of stable, dynamic and prosper region.
Phnom Penh, 17 August 2021
Ambassador of the Embassy of the Republic of Indonesia in Phnom Penh
H.E. Sudirman Haseng