Cambodia: An emerging ASEAN investment hub

+ Official Coverage on The Establishment Post

28 June 2013
The Establishment Post

Cambodia: An emerging ASEAN investment hub

Foreign Direct Investment (FDI) has been re-shaping the economic and social landscape of Cambodia, thanks to years of positioning the country as a market-friendly economy. Spire Research and Consulting shared its views on Cambodia in an article published in The Establishment Post, an ASEAN journal of economic and socio-political affairs.

Cambodia is fast emerging as a serious investment hub in Southeast Asia. FDI is pouring in from keen investors across the globe. Some economists have forecasted a 7 per cent GDP growth rate for the next five years.

Spire’s article on Cambodia identified the following success factors behind the influx of FDI into Cambodia:

Cambodia’s market economy ensures 100 per cent foreign shareholding in local enterprises.
Cambodia has one of Asia’s lowest cost labour forces.
Cambodia’s geographic location enables it to act as an entrepot between Vietnam and Thailand. Its close proximity to India and China also provides ample trading opportunities.
Cambodia’s increasing integration in trade has led to membership in various trade pacts and programs.
There is a large reservoir of untapped natural resources for exploration and production.
Cambodia’s magnificent beaches and historical sites remain a strong attraction for inbound tourism.

Besides, the country is attractive to investors due to its largely dollarized economy, which removes exchange rate risk.

However, corruption, infrastructure gaps and certain restrictions on FDI continue to inhibit Cambodia’s road to economic development. The Cambodian government has taken action to upgrade transport connectivity, modernize sea ports and foster efficient service providers for internet and mobile phone users.

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