European investors have stated they are planning to increase investment and trade with Cambodia and ASEAN – they highlighted supply chains and implementing free trade agreements are key opportunities between the two blocs.
According to the flagship survey, EU-ASEAN Business Sentiment Survey 2021, 82% of the ASEAN economic community (AEC) are expected to increase their level of investment in ASEAN over the next 5 years and 63% ranked ASEAN as the region of best economic opportunity.
However, only 2% think the AEC is progressing fast enough and 81% think there are too many barriers to the efficient use of supply chains.
Opportunities and challenges for Cambodia
Speaking about the opportunities and challenges this presented was a panel hosted by Tom Hesketh and included Tassilo Brinzer, Daniel Schmücking, Chris Humphrey and Molyaneth Heng.
Chris Humphrey Executive Director, EU-ASEAN Business Council said the region needed to focus on accelerating the pace of implementation of current key agreements and initiatives as well as listening to feedback from the private sector.
He added, that while Cambodia has a great number of initiatives focusing on the current key initiatives was paramount.
Tassilo Brinzer European Chamber of Commerce Chairman reflected that Cambodia needed to ensure its Environmental, Social, and Governance (ESG) was at an appropriate level for European business to invest in the Kingdom.
He added, that in the future he hopes what is called ‘green investment’ today will just be called investment.
Tekreth Kamrang Secretary of State at the Ministry of Commerce outlined the government was focusing on promoting economic diversification and economic recovery in four main sectors including agriculture and agri-business, tourism, garment, and manufacturing.
She added, the government was also aiming to build growth for competition, resilience, and sustainable inclusive growth with the development in digitalization to support the SMEs, education skills labor, public health and thirdly the green recovery.
Cambodia in the spotlight during ASEAN Chairmanship
Daniel Schmücking Representative to Cambodia for Konrad-Adenauer-Stiftung (KAS) highlighted that this year Cambodia will have the opportunity to highlight its role within the bloc during the 2022 ASEAN Chair.
He added, despite being a smaller economy Cambodia could bring the bloc together through economic framework and economic diplomacy.
According to a KAS report: Cambodia will have the opportunity to further advance economic diplomacy so that the Kingdom can diversify its sources of growth, amplify economic potentials, and obtain advantages from emerging opportunities.
In particular, the ASEAN Chairmanship will allow Cambodia to pursue the path of economic liberalisation, open trade and globalisation, and strive to promote multilateral trade and negotiations for free trade agreements with more countries, KAS stated.
The country expects that it will turn the external environment into a source of opportunities for its national development, foster greater international engagement between it and other major economies, and elevate its reputation in the world, they added.
Cambodia Investment Review previously reported that EU Ambassador to Cambodia Carmen Moreno said trade and investment will be the main drivers to sustain Cambodia’s growth and create new jobs.
“The adoption of the new investment law will be an important tool to attract more and better-quality investment, increase diversification and competitiveness of industries, and provide more and higher-value jobs for the country,” she said.
Moreno also said the EU would look to increase its presence in Cambodia and is focused on creating a transparent and predictable business environment for investors that adheres to international standards.
The Cambodian government projected it will achieve a growth rate of around 4.8 percent, making the gross domestic product (GDP) current value of approximately $30.544 billion in 2022.