As a result of the pandemic, the economy contracted for the first time since the 1980s. Outages in global supply chains have been felt by the Cambodian economy, which is heavily dependent on foreign trade with a predominantly informal sector, with a slump in all key sectors – textiles, construction and tourism.
The economic crisis has confirmed previous warnings from international financial institutions that a decade of 7% growth is unbalanced and Cambodia is ill-prepared to face external shocks. Dependence on development cooperation and grant aid may deepen in the short term due to ongoing uncertainty about the full recovery of global demand. A gradual recovery can be expected already this year, but the return to the original growth values will be gradual.
The government has adopted a national recovery plan for the period 2021-2023. In the plan, the agriculture, manufacturing and domestic tourism sectors were identified as priorities for restarting the economy. An extraordinary fund of low-interest loans to small and medium-sized enterprises in the agricultural and food industry was established.
A revision of the Investment Act is also being prepared, which should make it easier for foreign investors to access the market and reduce the bureaucratic burden. A greater emphasis on the digitization of state administration and administration is also being considered. The effects of the economic crisis are motivating the government to take a more active approach in supporting exports and concluding new free trade agreements, where Cambodia has so far recorded lower sales of production (e.g. China, Korea, etc.).
Post-COVID-19 opportunities for foreign exporters
It is necessary to continue to take into account the risk of postponement of larger projects and the reduction of investments by the state and private entities. On the other hand, opportunities can be found in smaller projects and investments. The pandemic has dampened government purchases, but it is putting pressure on improving the health system. The upcoming revision of the Investment Act could help increase the confidence of foreign investors, who have so far focused on simpler production, especially in the textile industry.
Ultimately, the pandemic may have a positive effect on starting the process of diversification of the Cambodian economy, which is desirable for its sustainable growth and as a prevention of future global crises. Promising possibilities are offered by the so far little-used fields of e-commerce and fintech services. In addition, the tools of foreign development cooperation of the Czech Republic can be used, where the healthcare and water and sanitation sectors are priority fields.
Civil aviation industry
According to allcountrylist, construction of new backbone airport hubs and modernization of existing regional airports is currently underway. In 2020, projects for new airports in Phnom Penh and Siem Reap were launched, with an assumption of completion in 2023. A smaller airport in Mondulkiri province should undergo modernization. The implementers of these projects are mainly Chinese entities, subcontracting options are offered especially for those Czech companies that already have sufficient references on the Chinese market.
Energy industry
Cambodia is turning its attention to previously neglected photovoltaics, while foreign firms are also exploring the potential of small hydro and wind power. According to estimates, the share of solar and wind energy in the country’s energy mix could increase from the current 5% to up to 15% by 2030. At the same time, smaller projects of renewable resources are the most interesting investment alternative in the energy sector.
However, Cambodia continues to count on fossil resources as well, and in 2020 the construction of several coal-fired power plants was started in the form of a joint venture. Cooperation with the investors of these projects, which are usually Chinese companies, is necessary for possible subcontracting. Frequent power outages can be a prerequisite for the supply of backup generators and associated technologies that are commonly used throughout the country.
Water management and waste industry
Opportunities for application are offered by smaller projects with the use of innovative and inexpensive solutions (mobile water treatment plants, root cleaners, etc.). Insufficient capital of the public sector for the implementation of projects can in some cases be bridged by instruments of foreign development cooperation. Companies could also apply as suppliers for the local non-profit sector with access to their own financing. Partial opportunities can be identified through subcontracting for large projects such as water treatment plants financed by international financial institutions.
Healthcare and pharmaceutical industry
Health care has long been struggling with low public trust due to the insufficient equipment of public hospitals and the low qualification of personnel for more complex procedures. Public hospitals lack the experience of staff to operate and regularly repair technologically demanding equipment. The pandemic demonstrated the need for necessary investments in hospital equipment (devices, beds, instruments and other aids for routine and more complex procedures). At the same time, it was confirmed that the healthcare sector is not sufficiently prepared to face extraordinary events and a higher number of patients. As part of the deliveries, some development tools can be used with the option of focusing on hospitals where the Czechia is already active in this prioritized area of development cooperation.
Agricultural and food industry
The agriculture sector has not been hit as hard by the pandemic as other sectors. However, its long-term weakness remains the low competitiveness of growers and excessive dependence on primary production with underdeveloped agribusiness and processing industry. Modern agricultural methods and technology are especially lacking in small and medium-sized enterprises.
Underappreciated potential is offered by the agribusiness of products with protected geographical indications (Kampot pepper, palm sugar from Kampong Speu or pomelo from the island of Koh Trong), for which demand is growing, but their producers do not have sufficient capacities for processing and exporting abroad. In particular, exporters of micro and mini solutions could apply, a zero customs rate can be used when importing agricultural machinery and equipment.
Contacts
Subchapters:
- Contacts to Czech embassies in the territory
- Practical telephone numbers (emergency services, police, firefighters, information lines, etc.)
- Important Internet links and contacts
Contacts at the embassies of the Czech Republic in the territory
Embassy of the Czech Republic
ICON Professional Building (5th floor)
216 Norodom Boulevard
Tonle Bassac 12301 Phnom Penh ( Google Maps link )
tel.: +855 (0)23 726 623,
other contacts here
website: www.mzv.cz/phnompenh
It is possible to take a taxi from the airport to the embassy. A taxi can be ordered at the airport, or it is possible to use a shared taxi application (e.g. Grab or PassApp). The average price for a taxi from the airport to the city center is usually around 15 USD.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
- Police: 117
- Firefighters: 118
- Emergency room: 119
Important web links and contacts
- www.mzv.cz/phnompenh – Embassy of the Czech Republic in Phnom Penh, economic news from the territory
- www.mfaic.gov.kh – Ministry of Foreign Affairs and International Cooperation of Cambodia
- www.moc.gov.kh – Ministry of Commerce of Cambodia
- www.mef.gov.kh – Ministry of Economy and Finance of Cambodia
- www.evisa.gov.kh – electronic visa application (only official site)
- www.worldbank.org/en/country/cambodia – World Bank in Cambodia
- www.adb.org/countries/cambodia/main – Asian Development Bank in Cambodia
- www.ccc.org.kh – Cambodian Chamber of Commerce
- www.cccdirectory.org – Cambodia Chamber of Commerce Members Directory
- www.eurocham-cambodia.org – European Chamber of Commerce EuroCham
- www.cambodiainvestment.gov.kh – Cambodia Development Council (CDC)
- www.b2b-cambodia.com – a portal about doing business in Cambodia
- www.customs.gov.kh – Customs Administration
- www.pressocm.gov.kh – Cambodian government website
- www.phnompenhpost.com – electronic version of Phnom Penh Post newspaper
- www.khmertimeskh.com – the electronic version of the Khmer Times newspaper
