By Sovinda Po
Cambodia cannot control global trade wars, geopolitical rivalry or climate shocks. But it can decide how prepared it is when those shocks arrive. As the country navigates a more uncertain world, the real strategic question is no longer whether another crisis will come, but whether Cambodia has built the national resilience needed to absorb, adapt, recover and emerge stronger from it.
At this critical moment, there is no shortage of challenges facing smaller countries like Cambodia. These challenges are wide-ranging, from economics to geopolitics, to society.
Internally, Cambodia is dealing with high private debt (non-performing loans), stagnant real estate, unemployed returned workers from Thailand, rising inflation, rising energy prices, online frauds, low local processing capacity, climate vulnerabilities (e.g., flooding), etc. Externally, Cambodia is dealing with the impacts of closed borders with Thailand, US’s tariffs, fluctuating crude oil and fuel prices, great power competition, concentrated Foreign Direct Investments in only a few sectors like manufacturing, etc.
Cambodia’s National Resilience
In response to these challenges, Cambodian leaders have increasingly promoted national resilience as a strategic policy framework. However, while the concept has gained traction among policymakers and academics, there is still little clarity about what national resilience actually means or how it should be applied in Cambodia.
For clarity, resilience refers to one’s capability to absorb, adapt, and recover from systematic shocks without or with minimal losses and then transform itself to be stronger. Within this definition, there are four key concepts that need to be defined.
Absorptive capacity is a nation’s ability to take the first hit from a major shock—such as a global economic crash, a pandemic, or a severe climate event—and absorb the impact without experiencing systemic collapse.
Adaptive capacity is a nation’s ability to make incremental adjustments, change behaviors, and modify internal systems to better cope with ongoing or predictable hardships. It assumes that the operating environment has permanently changed, requiring new methods to maintain the same level of well-being.
Recovering capability is the speed and efficiency with which a nation returns to its normal, pre-crisis state after suffering damage. It focuses on relief, rehabilitation, and getting systems up and running again as quickly as possible.
Transformative capacity is a nation’s ability to fundamentally change its underlying structures, institutions, and economic foundations when the status quo becomes completely unsustainable. This is the highest level of resilience, where a country deliberately redefines its entire systems to move to a higher tier of development.
For Cambodia, the definition of its national resilience does not seem to be well articulated. Moving forward, embracing a clear definition of a concept can help guide Cambodia’s thinking about how to deal with internal and external challenges.
As a humble suggestion, the definition of resilience discussed above fits well with Cambodia’s growing need to safeguard its sovereignty and further boost its economy. As listed above, there are myriads of challenges facing the country. To ensure that Cambodia is well prepared to deal with those challenges, its national resilience – absorption, adaption, recovery, and transformation – as a guiding policy needs to be enhanced.
Japan’s Free and Open Indo-Pacific 2.0
In early May 2026 at the Vietnam National University, the current Prime Minister of Japan Takaichi Sanae spoke about Japan’s new foreign policy direction, focusing the shifting geopolitical dynamics in Asia, rising economic challenges, and technological accelerations. Even though a big proportion of the speech focuses on Japan-Vietnam bilateral relations, there are other aspects vis a vis Southeast Asia that she highlighted.
As Takaichi Sanae pointed out, three new pillars of Japan’s Free and Open Indo-Pacific – AI and Data Age Infrastructure, Co-Creation and Trade Rules, and Regional Security and Defense – are designed to offset challenges of geopolitical competition, and tech disruption and promote the growth of the Global South.
Areas of Convergences
For Cambodia, Japan’s updated FOIP, focusing on the three pillars mentioned above, is an emerging opportunity. This means that there are areas of greater convergence between Cambodia’s needs to enhance its national resilience and Japan’s aspiration to be a responsible regional player. That said, both sides could work on advancing their shared goals through three key immediate areas.
First, both Japan and Cambodia can work on digital and AI infrastructure cooperation.
The first pillar of Japan’s FOIP 2.0 — AI and Data Age Infrastructure — maps onto perhaps the most acute of Cambodia’s internal vulnerabilities: a digital economy that has expanded faster than its capacity to secure and process it. The proliferation of online scam operations has become both a domestic governance headache and a reputational liability for Cambodia internationally.
Cambodia has responded by participating in ASEAN’s regional cybersecurity cooperation framework, working with the UN Office on Drugs and Crime on transnational crime, and cooperating with Interpol on cyber-enabled fraud investigations — but bilateral capacity remains thin relative to the scale of the problem.
The strategic logic of prioritizing this pillar is straightforward. Cyber and data vulnerabilities are not yet at the level of systemic shock that would test Cambodia’s absorptive capacity, but they are precisely the kind of “ongoing or predictable hardship” that adaptive capacity is meant to address — requiring Cambodia to modify its regulatory and institutional systems rather than simply recover from a single incident.
Concretely, an immediate agenda under this pillar could include an expanded scope for the existing JICA-CamCERT partnership to cover fraud-specific threat intelligence sharing, Japanese co-investment in data-center and connectivity infrastructure to raise Cambodia’s local processing capacity, and inclusion of Cambodian officials in Japan’s regional AI-governance dialogues as Tokyo begins to export its own domestic AI regulatory approach to Southeast Asia.
None of this requires new institutional architecture; it requires scaling an existing one.
Second, Japan and Cambodia can help each other on trade diversification and economic rules-making.
The second pillar of Japan’s FOIP 2.0 — Co-Creation and Trade Rules — speaks directly to one of the more structural vulnerabilities in Cambodia’s external environment: an FDI base that remains heavily concentrated both by sector and by source country.
In 2025, Cambodia attracted $5.2 billion in FDI, of which China accounted for over 70 percent of inflows, with Singapore a distant second at 7 percent. This concentration leaves Cambodia’s investment ecosystem exposed to shifts in a single bilateral relationship, and reinforces the pattern the country is already trying to move away from — a Cambodian government that has publicly framed diversification of investment sources as central to building a more resilient economy less reliant on any one partner.
Japan’s trade-rules pillar, which aims to co-create standards and supply-chain arrangements with partner economies rather than simply extend aid, offers a mechanism for Cambodia to add a qualitatively different investor to this mix rather than merely a larger one.
This pillar strengthens more than one dimension of resilience. Diversifying Cambodia’s investment base enhances its absorptive capacity by reducing its exposure to shocks affecting any single trading partner. At the same time, attracting investment into higher-value sectors such as agro-processing, renewable energy and technology—rather than remaining heavily dependent on low-value garment manufacturing—supports transformative capacity by reshaping the country’s economic foundations instead of simply cushioning existing vulnerabilities.
An immediate agenda could include a bilateral dialogue on supply-chain resilience that addresses disruptions along the Thailand border, Japanese-backed incentives to expand investment in agro-processing and renewable energy, and Cambodia’s active participation in the regional trade rules and standards that Japan promotes under this pillar. Doing so would allow Cambodia to help shape emerging economic rules rather than simply adapt to them as it prepares for graduation from Least Developed Country (LDC) status in 2029.
Third, Japan can offer non-traditional security support to Cambodia.
The third pillar of Japan’s FOIP 2.0 — Regional Security and Defense — is the most politically sensitive of the three for Cambodia, given its proximity to major-power rivalry, but recent bilateral developments suggest the convergence here is already more advanced than the “emerging opportunity” framing might imply.
In July 2026, Japan provided patrol boats and communications equipment to Cambodia’s military under its Official Security Assistance program, marking the first time Cambodia has received support through that framework, with the agreement signed by Japan’s ambassador and Cambodia’s Defence Minister. The package, valued at roughly $3 million, is also expected to support the establishment of the first communication school for the Royal Cambodian Armed Forces, run jointly with Japan’s Ground Self-Defense Force.
This is a modest package in dollar terms, but symbolically significant as an opening rather than a ceiling.
The immediate value of this pillar lies less in absorptive capacity against a sudden security shock — an unlikely near-term scenario — and more in reinforcing recovery capability through disaster and climate cooperation, while the sovereignty-preserving language Tokyo has attached to its security assistance offers Cambodia a partner whose engagement is explicitly framed as expanding, rather than narrowing, its room for maneuver among competing powers.
An immediate agenda could extend the newly opened OSA channel incrementally, deepen joint disaster-response planning given Cambodia’s flooding vulnerability, and use the environmental cooperation initiatives launched in 2026 as a low-friction venue for building the kind of habitual, working-level trust that could eventually support a broader security relationship.
Limitations
Even though the Japan’s FOIP 2.0 is promising, there are structural limitation so as to how the full potentials of Japan’s FOIP 2.0 can fully be maximized for Cambodia.
First, Japan’s cybersecurity cooperation has been capacity-building, not large-scale investment — too small relative to the scam economy’s size. The problem is also transnational, so bilateral aid alone can’t fix it without deeper ASEAN/Interpol coordination, and some drivers are domestic governance failures Japan can’t address from outside.
Second, China still dominates Cambodian FDI (over 70 percent in 2025) despite a decade of diversification efforts, so shifting this balance is slow and structural, not something one partnership fixes quickly. Japanese investment is more risk-averse and smaller in volume than Chinese capital, and the Thailand border closure could push Japanese “Thailand Plus One” investment toward Vietnam instead of Cambodia.
Third, Cambodia’s need to avoid appearing to choose sides caps how far this cooperation can go, and China remains the dominant security/economic partner regardless. The 2026 OSA package is symbolically important but financially small, and Japan’s “strategic empowerment” framing is Tokyo’s interpretation — Phnom Penh may see it more as one more hedge than a partnership upgrade.
Conclusion
Japan’s FOIP 2.0 is not a strategic alternative to Cambodia’s existing partnerships, but it is a valuable complement to them. Cooperation is already taking shape in digital infrastructure, trade diversification and non-traditional security, from CamCERT capacity-building to Japan’s 2026 Official Security Assistance package. While these initiatives broaden Cambodia’s strategic options, they remain small compared with China’s deeply entrenched role in the country’s economy and security landscape.
For Cambodia, the strategic value of FOIP 2.0 lies less in displacing that dependence than in incrementally building the kind of absorptive, adaptive, recovery and transformative capacities that widen its room to maneuver among competing powers. Whether this translates into meaningful resilience will depend less on Japan’s framework itself than on Cambodia’s own follow-through on diversification, and on whether both governments treat these three areas as a sustained agenda rather than a one-off gesture.
Sovinda Po is Senior Lecturer of International Relations and Strategy at Institute for International Studies and Public Policy at Royal University of Phnom Penh.
