Cambodia 20240819: Capacious, Erudite, Germane
Cambodia 20240819: Capacious, Erudite, Germane
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Headlines:
Chinese Investments Reshape Landscape
Funan Techo Canal Still Controversial After Start
Foiled Plot Tightens Security Grip
Trade and Port Growth Drive Economy
Garment Sector Preps for Wage Talks
Tourism Soars on Air Travel, Eco-Tours
Tighter Rules for Lending on the Way
Global Partnerships Expand: KR, RU, CU, TR
Vinci Granted Rights to New PP Airport
Thai Casino Law Threatens Border Gaming
Real Estate Market Shows Mixed Signals
Construction Sector Embraces Sustainability
Energy Talks with Thailand Need Jumpstart
Siem Reap Hotel Leads Plastic-Free Charge
Chinese Investments Reshape Landscape
Massive infrastructure projects like the Phnom Penh-Sihanoukville Expressway and Funan Techo Canal are boosting connectivity and growth, but raising debt and regional tension concerns. PM Hun Manet expands diplomacy beyond China, though Beijing's influence remains strong. The Chinese-funded Ream port project stirs unease in Thailand over potential military uses.
Read more: East Asia Forum (Investment impact), The Star (Relations stability), China Daily (Xi’s visit legacy), Cambodia Daily (Geopolitical implications)
Funan Techo Canal Still Controversial After Start
The Funan Techo Canal, a massive $1.7 billion infrastructure project, has become a symbol of both ambition and controversy. The 180 km canal, intended to connect Phnom Penh to the Gulf of Thailand, should lower transport costs and boost economic connectivity by bypassing cutting Vietnam out of the picture. The project, however, led by the influential Overseas Cambodian Investment Corporation (OCIC), has been fraught with land disputes and concerns over compensation for displaced residents. The OCIC, owned by tycoon Pung Kheav Se, has a history of contentious development projects that have displaced hundreds of families, raising fears that those living along the canal’s route may face similar struggles. Despite government assurances, residents remain skeptical about fair compensation, particularly in light of OCIC’s track record.
Read more: Khmer Times (Project update), RFA (Controversy and compensation issues)
Foiled Plot Tightens Security Grip
Cambodian security forces arrested 31 individuals allegedly planning to overthrow the government. The operation included weapons seizures and heightened security measures. Officials are urging public vigilance against extremist influences while emphasizing overall stability.
Read more: Khmer Times (arrests and security), Khmer Times (government stability)
Trade and Port Growth Drive Economy
Exports to Vietnam rose by 38% in early 2024, despite tensions over the Funan Techo Canal (also read second article, above), with total trade reaching $4.6 billion. Sihanoukville Autonomous Port, an important gateway for Cambodian trade, saw a 25% increase in revenue, fueled by the completion of a new container terminal that improves cargo handling capacity. Cambodia's trade with RCEP countries hit $20 billion, showing the benefits of regional trade agreements.
Read more: Khmer Times (Vietnam trade), Khmer Times (Port revenue), Khmer Times (RCEP trade), AKP (Port expansion)
Garment Sector Preps for Wage Talks
Discussions on the 2025 minimum wage for garment, footwear, and travel goods sectors have begun. The industry saw 17% export growth in early 2024. Current minimum wage is $204 per month. Proposals due August 29.
Read more: Apparel Resources (Wage discussions), Khmer Times (Wage negotiation criteria)
Tourism Soars on Air Travel, Eco-Tours
Air passenger traffic saw a 22% lift in the first half of 2024. International airports handled over 3 million passengers, a strong recovery in air travel. Elsewhere on the tourism landscape, Veal Veng, once a Khmer Rouge stronghold, has transformed into a sought-after eco-tourism spot, attracting visitors with its green development initiatives and natural attractions like the Antong Aing area and 505 Elephant Roundabout.
Read more: Khmer Times (Air travel growth), Khmer Times (Eco-tourism development)
Tighter Rules for Lending on the Way
The banking and financial sectors are bringing in new regulations to improve consumer protection and promote ethical lending. The Association of Banks in Cambodia and the Cambodia Microfinance Association announced measures prohibiting the use of some lands and personal identification documents as collateral for loans. These rules are intended to prevent predatory lending, especially among vulnerable populations, and to encourage lenders to consider unsecured lending options.
Read more: Khmer Times
Global Partnerships Expand: KR, RU, CU, TR
The Republic of Korea and Cambodia have elevated their ties to a "strategic partnership," focused on trade, investment, and defense, with special economic zones planned for Korean investors. Cambodia and Russia have signed a new MoU to deepen academic and cultural collaboration, particularly in Asian and African studies. The Cuban Embassy has committed to improving cooperation in governance and public administration, while Cambodia and Türkiye celebrate 65 years of diplomatic relations by broadening cooperation in sectors including education, energy, and environmental protection.
Read more: Khmer Times (Korea), Khmer Times (Russia), Khmer Times (Cuba), EAC News (Türkiye)
Vinci Granted Rights to New PP Airport
Tensions have eased as France’s Vici has secured operating rights for the new Chinese-built Techo Takhmao International Airport in Phnom Penh. This decision comes after Vinci's monopoly on Phnom Penh's airport operations was threatened by new Chinese-backed developments. The agreement, following a meeting between French President Emmanuel Macron and Cambodian Prime Minister Hun Manet, ensures that Vinci will continue its involvement in Cambodia’s aviation sector, averting potential legal disputes and securing continued French investment.
Read more: Nikkei Asia
Thai Casino Law Threatens Border Gaming
Thailand's finalization of the Entertainment Complex Bill, which legalizes casinos, is expected to increase competition for Cambodian casinos, particularly in border towns. The new law, which permits both foreigners and Thai citizens to gamble, will likely lead to a decline in Cambodian casino revenues as Thai citizens opt to gamble closer to home. This development could pressure Cambodian casinos to enhance their offerings to maintain their market share, especially with Chinese gamblers also in play.
Read more: Khmer Times
Real Estate Market Shows Mixed Signals
Knight Frank’s H1 2024 report has shown a mixed performance in Phnom Penh's real estate market. While the office and serviced apartment sectors show signs of stabilization, the retail sector still struggles with oversupply and declining occupancy rates. The hotel industry is slowly recovering, yet still below pre-pandemic levels. The condominium market is adjusting to new realities with a focus on affordability, and landed housing continues to expand cautiously. Overall, Cambodia’s young population and infrastructure growth appear to offer long-term market potential.
Read more: Cambodia Investment Review
Construction Sector Embraces Sustainability
The local construction industry is moving towards sustainability by adopting passive cooling strategies, as discussed in a recent workshop hosted by the Institute of Technology of Cambodia. The shift, supported by the Ministry of Environment and UN partners, is expected to reduce energy consumption and greenhouse gas emissions. The workshop emphasized the integration of traditional and modern building techniques, focusing on energy efficiency.
Read more: Khmer Times
Energy Talks with Thailand Need Jumpstart
The Petroleum Institute of Thailand is calling for renewed negotiations with Cambodia over joint petroleum production in the overlapping claims area (OCA) of the Gulf of Thailand, as talks have stalled since early 2024. The OCA, located near major gas fields, is reportedly a significant untapped energy resource. A successful agreement on collaboration could be a big shift in energy security for both nations, reducing Thailand’s reliance on expensive LNG imports and stabilizing electricity prices. Past successes in resolving similar disputes with Vietnam indicate that there is potential for a positive outcome.
Read more: Bangkok Post
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap with a less business-focused article.
Some readers may be relieved to learn that the Miss Cambodia 2024 Candidates have finally been announced, others may want to learn more about the Ritz-Carlton Phnom Penh Hotel and Residence that will be coming soon to Norodom Boulevard. Others still may be more interested in this sustainability focused article featuring Siem Riep’s legendary Christian de Boer:
Siem Reap Hotel Leads Plastic-Free Charge
Christian de Boer, managing director of the magnificent Jaya House River Park Hotel in Siem Reap, has been a pioneer in the movement to eliminate single-use plastics in Cambodia’s hospitality sector. Now serving as an advisor to the UNWTO, de Boer is calling for broader global change, challenging the tourism industry to adopt genuine sustainable practices beyond greenwashing. Some of his more important points call for full-time employment, the elimination of plastic, and fair working conditions as essential pillars of true sustainability.
Read more: TTG Asia
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