Logo of Phnom Penh Post newspaper Phnom Penh Post - Business outlook still positive

Business outlook still positive

A woman casts her vote at a polling station yesterday in Phnom Penh.
A woman casts her vote at a polling station yesterday in Phnom Penh. Hong Menea

Business outlook still positive

Cambodia’s business environment retained a positive outlook during the commune elections held yesterday, with several experts saying they expected the Kingdom’s economy to benefit from continued political stability.

Despite at times heated rhetoric and threats of violence, political campaigning leading up to the commune elections remained peaceful and without any major altercations, with unofficial preliminary results showing that the Cambodian People’s Party (CPP) took nearly 60 percent of the Kingdom’s communes. Though historically, economic uncertainty increased dramatically during the electoral process, the outlook for investments and business remained relatively unchanged according to members of Cambodia’s business community.

Ngeth Chou, senior consultant at Emerging Markets Consulting (EMC), a firm advising foreign companies on doing business in Cambodia, said that long-term investors showed few concerns regarding the commune election. Many firms continued to conduct feasibility studies in Cambodia and expected to expand their businesses in the Kingdom, he said.

“Investors believe that whoever wins the election, they will treat the private sector well,” he said. “They believe that the government acknowledges that the private sector is the main tax payer to boost government revenue and reduce dependency from foreign aid.”

Chou added that some small businesses or family-run firms had been affected by the election due to lower consumer demand, particularly in Phnom Penh as residents left the city to vote in their home communes.

Cambodia’s financial sector became a major focus of government policy leading up to the election following a series of regulatory changes, including efforts to make clear to Cambodians that the microfinance sector was not part of any government institutions. The government also intervened in the sector by imposing an 18 percent interest rate cap on microfinance loans.

Bun Mony, advisor to the Cambodian Microfinance Association (CMA) noted that though the interest rate cap could lower revenue and cut profit margins in the sector, overall neither the election nor the cap would have a lasting impact for the industry.

“We don’t have any worries and we, microfinance operators, still operate as usual and will expand our business according to market demand,” he said. “I think that whatever the results that are announced, there will not be any negative impact for this industry.”

Ngoun Meng Tech, director general of the Cambodian Chamber of Commerce said the situation surrounding the election was not as agitated compared to during previous election cycles. He said he had no concerns regarding the country’s future economic growth.

“Our economic situation is stable and growth is positive currently, so the election result will not be a concern or a risk to the process of economic growth,” he said.

“However, there are some concerns that still exist for businesses regarding possible future uncertainty but those fears are much smaller than previous elections.”

MOST VIEWED

  • Would you like fries with that? US burger chain makes Phnom Penh debut

    California-based The Habit Burger Grill restaurant chain is all set to serve up a delicious array of charbroiled burgers and sides at its newest international location in the centre of Phnom Penh. The Habit is “renowned for its award-winning Charburgers grilled over an open flame,

  • Banteay Meanchey flood victims receive aid

    Prime Minister Hun Sen on Wednesday provided aid to more than 10,000 families affected by flooding in Banteay Meanchey province’s Mongkol Borei district and offered his condolences to the 18 victims who drowned in the province over the past week. He said flooding had occured in

  • PM urges caution as Polish man tests positive for Covid

    The Ministry of Health on Wednesday reported that a 47-year-old Polish man tested positive for Covid-19 after arriving in Cambodia on Monday. There are a total of six Covid-19 patients currently in the country, all of whom are being treated at the Khmer-Soviet Friendship Hospital

  • Banteay Meanchey floods kill one more as death toll reaches 15

    As floodwaters start to recede in Pursat, Battambang and Pailin provinces and Phnom Penh, Banteay Meanchey continues to bear the brunt as one more person was killed on Monday, bringing the total number of flood-related deaths to 15 in the province this month. Banteay Meanchey provincial

  • Serving coffee with a side of robots

    The eye-catching glass building surrounded by greenery at the intersection of Streets 371 and 2002 in Phnom Penh’s Sen Sok district is more than just another coffee shop where you can while away a few hours. UrHobby House cafe is filled with robots and characters from

  • Floods prompt evacuations in Kampong Speu

    Rain-induced floods and water flowing from Kampong Speu province have submerged the houses of 1,527 families living close to the Prek Thnot River in Spean Thma, Tien, Kong Noy and Roluos communes in Phnom Penh’s Dangkor district, according to data from local authorities. Spean Thma