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Headlines:
Economic Growth Faces Headwinds
Border Tensions Create Ripple Effects
Scam Operations Draw Global Sanctions
Garment Sector Continues to Expand
Investment Climate Sending Mixed Signals
Gulf and Asian Trade & Labor: AE, KR
Financial Services Get a Boost
Ag and Exports
Press Freedom and Media Rules Consternation
Infrastructure and Environment
Domestic Political and Legal
Economic Growth Faces Headwinds
The IMF thinks that growth is going to slow to 4.8% once the final numbers are in for 2025 and will be a little lower again in 2026 with 4.0%, down from 6.0% in 2024. The weaker numbers are the result of softening domestic demand, declining remittances, and tourism challenges, compounded by the Thailand border kerfuffle. The IMF is suggesting a handful of temporary measures to support affected households and workers while making longer-term structural changes to strengthen fiscal buffers for the long term. The fund also wants to see a return of reserve-requirement ratios to pre-pandemic levels alongside better financial supervision to keep an eye on rising private debt and NPLs.
Read more: Cambodia Investment Review
Border Tensions Create Ripple Effects
Thailand is expected to ask for an international fact-finding mission on landmines at the border, the first such mission under the relevant treaty. A Chinese national was injured by a land mine while allegedly attempting to cross illegally. Thailand says the Cambodians are laying new mines in disputed territory. Both countries have agreed to install temporary demarcation posts in the disputed zone following a joint survey of 5.3 kilometers, nearly all the temporary markers between posts 52 and 59 have already been installed. The demarcation could end up as a de facto permanent situation, and while some fear that this might complicate future adjustments, it seems like a stop in the fighting would be a helpful ‘win.’
Read more: Asia Nikkei (Fact-Finding), The Star (Mine Injury), CamboJA News (Border Posts), Human Rights Watch(Worker Crisis)
Scam Operations Draw Global Sanctions
South Korea hammered 15 people and 132 Prince Group/ Huione/ related entities this week in its largest-ever unilateral sanctions action. The U.S. government announced operations against the Prince network in October, designating it a transnational criminal organization and charging Chairman Chen Zhi with wire fraud and money laundering, while seizing nearly $15 billion in bitcoin: the largest asset forfeiture in U.S. history. The UK froze 19 London properties valued at more than $100 million. South Korea has appointed former National Police Agency Commissioner General Kim Chang-yong as ambassador to improve cooperation in dealing with these operations after the recent repatriation of 64 Koreans over alleged scams.
Read more: Korea Herald (SK Sanctions), The Diplomat (US Operations), RegTech Times (Chen Zhi), Yonhap(Ambassador), Korea JoongAng Daily (Police Chief)
Garment Sector Continues to Expand
More than 1,800 garment factories are currently in operation, a nice increase over the almost 1,600 factories that were reported at the end of 2024. The garment, textile, footwear, and travel goods industry employs more than a 1.1 million workers, most of them women. Several international clothing brands have made binding agreements to improve wages and support the introduction of collective bargaining, a welcome change for labor from the previously mostly voluntary agreements.
Read more: AKP (Factory Growth), Textile Today (Wage Deal)
Investment Climate Sending Mixed Signals
The CDC has approved almost 600 Qualified Investment Projects worth $9.4 billion so far this year. Deputy Prime Minister Sun Chanthol said that 93% of G-PSF reform measures are completed, with 166 of 179 changes fully implemented and 82% of issues raised in working group meetings already fixed. The government signed a reciprocal trade agreement with the United States, in what’s being hailed as a confidence booster for investors in the US market. Effective January 1, a capital gains tax of 20% on asset gains will be mandated under Prakas 496, a new tariff that will be applied to both resident and non-resident taxpayers.
Read more: Khmer Times (Reform Progress), Kiri Post (CDC Workshop), Khmer Times (Tax Changes)
Gulf and Asian Trade & Labor: AE, KR
The forum “Doing Business with Cambodia” brought together about 250 businesses from the UAE and Cambodia in a meeting organized by Dubai Chambers in concert with the Ministry of Commerce and the Cambodian Chamber of Commerce. Bilateral trade between the UAE and Cambodia is nearly $400 million, with more than 30 companies currently active in Dubai’s market. The UAE-Cambodia Comprehensive Economic Partnership Agreement that came into effect in early 2024 is helping support the growth of non-oil trade to a target of more than a billion USD by 2030. South Korea’s Hongcheon County signed a Memorandum of Understanding on November 27 to recruit seasonal workers. Korea says that it needs more than 1,500 foreign seasonal workers annually.
Read more: Khmer Times (UAE Forum), Arabian Business (CEPA Goals), Khmer Times (Korean Workers)
Financial Services Get a Boost
The Asian Development Bank approved a $50 million loan on November 24 to improve the financial services sector through its Inclusive and Sustainable Finance Development Program. The program will support the development of the regulatory environment, financial stability, and consumer protection while developing plans for the rollout of new financial technology and digital assets. AIA Life Insurance and KB PRASAC Bank inked a 10-year bancassurance partnership to provide one-stop financial experiences that bring together banking services and life/health insurance solutions. The products will soon be available at 50 KB PRASAC Bank branches and is expected to expand nationwide by Q2 next year.
Read more: ADB (ADB Loan), Cambodia Investment Review (Bancassurance)
Ag and Exports
The Ministry of Economy and Finance confirmed that tax incentives for agricultural enterprises will be extended through 2027, including suspension of minimum tax payments, income tax exemptions, and the removal of withholding obligations. More than 200 members of the Rice Federation are benefiting from the incentives, which have been in play since 2011. Cambodia has exported more than $807 million worth of cashews YTD, a 60% increase from last year. German company FUCHS Gruppe is going to build a pepper processing plant in Tbong Khmum in support of exports. Cambodia produces about 20,000 tonnes of pepper annually.
Read more: Fresh Plaza (Tax Incentives), Cambodianess (Cashews), Khmer Times (Pepper Plant)
Press Freedom and Media Rules Consternation
The Ministry of Information has brought about new standards for journalists and media outlets that require editors-in-chief to be more than 25 years old, hold a Bachelor’s degree with a recognized journalism certificate, and have at least three years of experience. Journalists and content creators are required to be more than 20 years old and have a Bachelor’s degree to run media outlets, which are now required to have full staff structures. The Cambodian Centre for Human Rights published a legal analysis indicating that laws restrict online freedom of expression, with the Draft Law on Cybercrime expected to impose stricter (beyond already strict) defamation penalties. Cambodia has dropped 10 places to 161 in the 2025 World Press Freedom Index, in the category of those facing a “very serious situation.” The Ministry says that at the last report there were more than 10,000 journalists working in the country. Kouprey has a good summary of the situation - you should read it (and subscribe).
Read more: Kiri Post (Qualification Rules), Kiri Post (CCHR Analysis), Kouprey (Summary)
Infrastructure and Environment
Minister of Water Resources and Meteorology Thor Chetha says his ministry is committed to cooperation with the Asian Development Bank on sustainable and climate-resilient water resource management. The government is currently working on the delivery of three ADB-financed projects: the Climate-Friendly Agribusiness Value Chain Project, Irrigation Agriculture Improvement Project, and Integrated Water Resources Management Initiative. The country was able to tie up support for six climate initiatives during COP30, including a sustainability program for Tonle Sap Lake targeted at restoration by 2050, a carbon-neutral island project in Koh Sralao, and a $4 million project to reduce black carbon emissions. Cambodia remains publicly committed to its goal to reduce greenhouse gas emissions by more than half by 2035.
Read more: Khmer Times (ADB Water), Khmer Times (Climate Projects)
Domestic Political and Legal
Former opposition lawmaker Suon Rida has departed the Cambodia National Rescue Party to join the newly rebranded Progressive Democratic Party. The party, formerly known as the Cambodia Nationalist Party, announced its new name after an extraordinary congress on September 28 and was given official approval from the Ministry of Interior in mid-November. About 850 victims of Piphub Deimeas Company protested in front of Phnom Penh Municipal Court on November 24 to demand the re-arrest of owner Hy Kimhong over longstanding debt issues that have dragged on for more than two years. The court announced 28 criminal cases and 8 civil cases against Piphup Deimeas Investment; hearings are set for December 16. More than 8,000 families were reportedly defrauded, and losses are estimated at a staggering $300 million.
Read more: English Cambodia Daily (Party Change), CamboJA News (Protest), Khmer Times (Court Cases)
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