Cambodia 20240902: Lambent, Atavistic, Empyrean
Cambodia 20240902: Lambent, Atavistic, Empyrean
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Headlines:
Bargaining Table Wins Threatened by Rising Rents
Bakong Success Helps Digital Asset Revolution
Mass Arrests After Alleged Overthrow Plot
AmCham for Improved US-KH Trade Relations
Foreign Staff Quota Application Window Open
Hun Manet’s Balancing Act
Economy Stable with Positive Mid-Term Outlook
Funan Techo Fuels Mekong Worries
Philippines and Cambodia in New Finance MoU
Security Doubts as Warships and Pier Transferred
Angkor Wat Pulls in $30 Million YTD
VN Airlines Direct Hanoi-Phnom Penh Flights
Infrastructure: Railway, Airport, and Bridge
Viral 'Temple Run' TikTok Trend
Bargaining Table Wins Threatened by Rising Rents
As Cambodian garment, footwear, and travel goods workers are pushing for a $14 minimum wage increase, employers have countered with a $1 offer, a significant impasse. Beyond that though, the potential wage hike faces a challenge as union leaders warn that any gains could be negated by rising living costs, particularly rent. Workers' representatives are calling on landlords to hold back from raising rental rates as the risk that increased wages will be offset by corresponding spikes in housing costs would leave workers no better off.
Read more: Fibre2Fashion (Wage Negotiations), Khmer Times (Negotiation Details), Khmer Times (Rising Rent Concerns)
Bakong Success Helps Digital Asset Revolution
The success of Cambodia's Bakong digital payment system, with widespread adoption over more than 10 million accounts, is paving the way for further digital asset innovations in the country. The National Bank of Cambodia is drafting regulations to expand the use of blockchain and crypto assets. The thriving blockchain ecosystem, supported by initiatives like CamDX and several startups, is indicative of Cambodia’s growing role in the digital economy. New entrants are finding opportunities in this evolving market, alongside established players like Bakong. Separately, WorldBridge Group and Thailand-based Bitkub Capital have formed a JV to explore digital asset services in Cambodia.
Read more: Khmer Times (Bakong Success), CIR (Bitkub Tie-up)
Mass Arrests After Alleged Overthrow Plot
Authorities have arrested 94 people following allegations of a plot to overthrow Prime Minister Hun Manet’s government. Human rights organizations, including Amnesty International and Human Rights Watch, say that 59 individuals remain unlawfully detained. The arrests are tied to accusations that a group, supported by the Khmer diaspora, was inciting protests over the government’s handling of the Development Triangle Area. Critics argue that the crackdown is a fig leaf to suppress dissent and maintain the ruling party’s control.
Read more: UCA News
AmCham for Improved US-KH Trade Relations
The American Chamber of Commerce (AmCham) in Cambodia is calling for the creation of a dialogue forum between the Cambodian Customs Administration and US investors to improve compliance with customs procedures and support smoother international trade. Talking specifically of the importance of private sector engagement, AmCham President Casey Barnett emphasized the need for streamlined trade processes to attract more American investment. The call comes as trade volume between Cambodia and the US exceeded $5.6 billion in the first seven months of 2024.
Read more: Phnom Penh Post
Foreign Staff Quota Application Window Open
Cambodia's Ministry of Labour and Vocational Training has opened the application window for the 2025 foreign employee quota, allowing businesses to apply until the end of November 2024. Companies must keep to a cap where foreign employees cannot exceed 10% of the total workforce, with specific percentages allocated for office, skilled, and unskilled labor. Businesses struggling to find qualified local employees can make a request to exceed this cap under special conditions, but they are subject to government approval.
Read more: DFDL
Hun Manet’s Balancing Act
As Hun Manet marks his first year as Cambodia’s Prime Minister, his leadership appears secure but is heavily reliant on the continued influence of his father, Hun Sen. While the Hun family controls most key political and social institutions, Manet’s legitimacy is increasingly tied to economic performance. With rising tensions over the Funan Techo Canal and concerns about Vietnam, Manet has no shortage of complex domestic and international challenges that he needs to navigate. His success will depend on his ability to maintain economic stability and consolidate his inherited power.
Read more: RFA
Economy Stable with Positive Mid-Term Outlook
The economy has stabilized after a two-year downturn, with a positive mid-term outlook, according to the Mekong Strategic Capital Report 2024. Growth drivers are improved liquidity in the financial sector, a rebound in garment exports, and ongoing infrastructure investments. Challenges remain, particularly in sustaining GDP growth and recovering domestic consumption. The report says that there is still a need for strategic investment and government intervention to maintain economic momentum.
Read more: Cambodia Investment Review
Funan Techo Fuels Mekong Worries
The Funan Techo Canal project, intended to connect the Mekong River with the Gulf of Thailand, has raised concerns among neighboring countries, particularly Vietnam. Funded by China, the $1.7 billion canal is seen as a move to increase Chinese influence in the region. While Cambodia insists the project is purely drive by domestic economic concerns, critics worry about environmental impacts and the furthering of Cambodia's dependence on China.
Read more: GIS Reports
Philippines and Cambodia in New Finance MoU
The central banks of the Philippines and Cambodia have signed a Memorandum of Understanding (MoU) to improve bilateral financial cooperation. The agreement, signed by BSP Governor Eli Remolona Jr. and NBC Governor Chea Serey, will facilitate closer collaboration in payment system connectivity, digital financial innovation, banking supervision, and cybersecurity.
Read more: Zawya
Security Doubts as Warships and Pier Transferred
China is set to transfer two Type 056A warships and a deep-draft pier at Cambodia’s Ream naval base, a move that analysts say could grant China privileged access to the Gulf of Thailand. The pier, capable of accommodating aircraft carriers, and the ships were developed and funded by China. Despite Cambodia's denials of exclusive Chinese military access, concerns are still present over Beijing's increasing influence and potential semi-permanent military presence in Southeast Asia, a worry for the United States and regional neighbors.
Read more: Radio Free Asia
Angkor Wat Pulls in $30 Million YTD
Angkor Archaeological Park generated $30.33 million in revenue from ticket sales during the first eight months of 2024, a one-third increase over the same period last year. The park pulled in more than 650,000 international tourists, with the United States, Britain, France, South Korea, and China the top source markets. The new Siem Reap Angkor International Airport, operational since November 2023, as well as rising Chinese tourism contributed to the growth.
Read more: Khmer Times
VN Airlines Direct Hanoi-Phnom Penh Flights
Vietnam Airlines will launch direct flights between Hanoi and Phnom Penh starting October 27, 2024, with four weekly flights. This new route complements existing services between Vietnam and Cambodia and is expected to particularly attract travelers from Japan, South Korea, and Europe. The airline is offering a special promotion with round-trip tickets starting at $262 for bookings made before September 30, valid for travel from October 27 to November 2, 2024.
Read more: Khmer Times
Infrastructure: Railway, Airport, and Bridge
The Ministry of Public Works and Transport has called for increased usage of the country’s railway services, talking up how cost-effectivene they are. The upcoming Techo International Airport has been praised by British media and is set to be the ninth-largest in the world. Phnom Penh’s Cambodia-Korea Friendship Bridge, scheduled for completion in June 2025, will go a long way to improving transportation links to and from Phnom Penh.
Read more: Khmer Times (Railway), Khmer Times (Airport), Khmer Times (Bridge)
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.
Miss Universe now allows married contestants and this year’s Cambodian winner is the nation’s first. Also in the pageant space, a troupe of Miss Grand contestants graced the red carpet recently at the 2nd Cambodia-Asia Film Festival. There is reportedly a boom underway in Cambodian-American literature. We will close this week with a story that’s getting traction in the international media about a new trend that has some up in arms:
Viral 'Temple Run' TikTok Trend
A viral TikTok trend, where tourists mimic the "Temple Run" video game by sprinting through Cambodia's Angkor Wat, has caused some backlash. While younger generations are saying they see it as harmless fun, traditionalists and cultural preservationists argue it disrespects the ancient site and risks damaging its fragile structures. Authorities are increasingly concerned about the impact of social media-driven tourism on the UNESCO World Heritage site, forcing them to have uncomfortable discussions on stricter regulations that may be needed to protect Cambodia’s cultural heritage.
Read more: SCMP (TikTok Trend), Khmer Times (Cultural Clash), NY Post (Tourist Impact)
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