Cambodia has came a long way. In 1920s, Phnom Penh was known as the “Pearl of Asia”, it was considered one of the loveliest French-built cities in Indochina. Over the next four decades Phnom Penh continued to experience rapid growth with the building of railways to Sihanoukville, and Phnom Penh International airport. Things changed and the Cambodians went through a tumultuous period in the 1970s. The country is now back on it’s feet and will only emerge stronger. So why Cambodia?
The population stands about approximately 16 million. Boosted by a young population with a median age of 24.9, one can only imagine the growth potential the country has as the new middle class emerge.
Strong GDP growth
Cambodia has experienced strong economic growth over the last decade; GDP grew at an average annual rate of over 8% between 2000 and 2010 and at least 7% since 2011. The tourism, garment, construction and real estate, and agriculture sectors accounted for the bulk of growth. Around 600,000 people, the majority of whom are women, are employed in the garment and footwear sector. An additional 500,000 Cambodians are employed in the tourism sector, and a further 50,000 people in construction. Tourism has continued to grow rapidly with foreign arrivals exceeding 2 million per year since 2007 and reaching around 4.5 million visitors in 2014. Mining also is attracting some investor interest and the government has touted opportunities for mining bauxite, gold, iron and gems.
Additionally, the One Belt One Road initiative linking Asia to Europe is expected to provide more trade opportunities for Cambodian products. Currently, Cambodian properties are not taxed on arrival in EU.
The establishment of the ASEAN Economic Community (AEC) in 2015 is a major milestone in the regional economic integration agenda in ASEAN, offering opportunities in the form of a huge market of US$2.6 trillion and over 622 million people. Cambodia products exported out from free trade area to ASEAN countries are subjected to only 0 to 5% tariffs.
Cambodian products exported to EU are granted duty free status too.
Labour costs are still considerably low. In view of rising business costs in China, Vietnam and Thailand, Cambodia appears to be an attractive alternative for foreign corporations to relocate their business. Notable companies over in Cambodia include Coca Cola, Combi, Toyota, Ajinomoto, and Heineken.