Cambodia Investment Review

Leader Talks: H.E. Sun Chanthol on New Opportunities for US Investors at ASEAN Leadership Forum in Washington

Leader Talks: H.E. Sun Chanthol on New Opportunities for US Investors at ASEAN Leadership Forum in Washington

Cambodia Investment Review

H.E. Sun Chanthol, Cambodian politician and Deputy Prime Minister, spoke at the Center for Strategic and the International Studies (CSIS) ASEAN Leadership Forum in Washington, D.C., where he emphasized Cambodia’s potential as a destination for US and Canadian investment. The forum, a key venue for Southeast Asian leaders to address pressing global issues, allowed Sun Chanthol to outline Cambodia’s strengths and opportunities for foreign investors, particularly from the US and Canada.

Cambodia’s Strategic Market Position and Economic Integration

Sun Chanthol highlighted that investors should view Cambodia not merely as a market of 17 million consumers, but as a strategic gateway to the broader Mekong region, which includes Vietnam, Laos, Thailand, Myanmar, and Southern China, with a combined consumer base of 250 million. Additionally, Cambodia’s membership in ASEAN, a regional bloc with 670 million consumers, and its inclusion in the Regional Comprehensive Economic Partnership (RCEP) trade agreement—encompassing 2.3 billion consumers—present vast opportunities for those looking beyond Cambodia’s borders.

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“Cambodia is ideally positioned for investors who are thinking on a broader scale,” Sun Chanthol said. He further underscored Cambodia’s favorable trading tariffs, such as the European Union’s Everything But Arms (EBA) agreement, and expressed hope that the United States will renew the Generalized System of Preferences (GSP), a trade program providing preferential duty-free treatment to Cambodian exports.

Discussing Cambodia’s political and economic stability, Sun Chanthol noted that the country has experienced peace and political stability since 1998, coupled with an average economic growth rate of 7% over the past two decades. “Following the COVID-19 pandemic, Cambodia rebounded with a 5% growth rate, and we continue to maintain stable macroeconomic indicators,” he said. The exchange rate has remained steady at around 4,000 riels to the US dollar, while inflation is flat at 2.5%, benefiting from a dollarized economy that reduces currency risks for US investors. Moreover, Cambodia’s public debt remains low, around 30% of GDP, with borrowing plans focused on productive infrastructure investments.

Sun Chanthol, Deputy Prime Minister and First Vice President of the Council for the Development of Cambodia, will lead the CDC delegation to the United States on October 1 2024 to engage with potential investors.

Infrastructure Development and Workforce Potential

Sun Chanthol emphasized the pro-business stance of the Cambodian government, which actively engages with the private sector through multiple working groups and annual public-private forums. “We believe the private sector is the engine of economic growth,” he said, adding that US investors and organizations, such as the American Chamber of Commerce in Cambodia, are integral to the country’s economic development.

He also pointed to Cambodia’s significant infrastructure improvements, which have been designed to integrate the country’s provinces and facilitate trade. Projects include extensive road networks connecting Phnom Penh to all provinces, the Phnom Penh-Sihanoukville Expressway, and the Phnom Penh-Ho Chi Minh City road, slated for completion in 2027. By 2029, Cambodia’s deep-sea port in Sihanoukville will be expanded, allowing for direct shipping to global destinations. “We are working to ensure that Cambodia becomes a regional logistics hub,” he said, mentioning new airports in Phnom Penh and Siem Reap to accommodate growing numbers of visitors.

On Cambodia’s workforce, Sun Chanthol noted that 60% of the population is under the age of 35, providing a young, dynamic, and trainable labor force for the next 30 years. He also highlighted government efforts to train over 1 million youths in technical skills, aimed at preparing them for the demands of a 21st-century economy.

Business Environment and Investor Confidence

Reflecting on Cambodia’s business environment, Sun Chanthol cited a World Bank report, which ranks Cambodia as having the most open investment regime in ASEAN, with 100% foreign ownership allowed in all sectors. “These are all the right ingredients,” he said. “We just need the cooks—investors—to take advantage of them.” He also noted that Cambodia approved $7.5 billion in investment during the first year of the new government under Prime Minister Hun Manet, with efforts underway to diversify the investor base beyond China, which has been the dominant source of investment.

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During the question-and-answer session, Sun Chanthol addressed several key topics. When asked about Cambodia’s relationship with the US and the potential impact of the next US administration, he stressed Cambodia’s commitment to fostering positive relations. “We will work with any US government,” he said. “We want more engagement, more investment, and more dialogue. Cambodia and the US will celebrate 75 years of diplomatic relations in 2025.” He added that many prominent US companies, such as Ford and Coca-Cola, already operate in Cambodia, and bilateral trade stands at approximately $9 billion, making the US Cambodia’s largest export market.

Regarding concerns about the expansion of the Ream Naval Base, Sun Chanthol reiterated that Cambodia’s constitution prohibits any foreign military base on its soil. “It is being used for joint military training with multiple foreign partners,” he clarified, adding that the Cambodian government has repeatedly affirmed this position, including in discussions with US President Joe Biden. “What more can we say? Wait until it’s completed, and we will prove it.”

Sun Chanthol, Deputy Prime Minister and First Vice President of the Council for the Development of Cambodia, will lead the CDC delegation to the United States on October 1 2024 to engage with potential investors.

Addressing Concerns on Scams, Corruption, and Sanctions

On the issue of scam compounds, Sun Chanthol acknowledged that the government is aware of their negative impact on tourism and investment and is taking action to crack down on illegal gambling and scams. “While we may not be able to eradicate 100%, we are doing our best to limit it as much as possible,” he said.

In response to questions about corruption, labor laws, and recent US sanctions against Cambodian businessman Ly Yong Phat, Sun Chanthol highlighted the Cambodian government’s ongoing efforts to improve the business environment. He pointed to the development of online applications for business processes, which he said would reduce corruption and make it easier to conduct business in Cambodia. “We have improved import and export processes, and the cost of doing business in Cambodia is becoming more competitive,” he added. As for the sanctions, Sun Chanthol described it as a private matter, stating, “It is up to him to defend himself.”

Sun Chanthol’s remarks reflect Cambodia’s strategic positioning as an attractive destination for investment, with a stable economic environment, supportive government policies, and a commitment to fostering long-term partnerships with US and Canadian businesses.

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