Chhay Bora, managing director of Bower Group Asia (BGA) – a Washington DC-based business strategy consulting firm that bolsters foreign direct investment in the Indo-Pacific region – offers deep insights into the economic prowess of Cambodia.
Specialising in public-private relations and public policy, Bora secured a Master of Science in Petroleum Engineering from the Russian Federation in 1997. As the guiding force behind BGA Cambodia, he has been instrumental in honing the human resources in business strategy consulting, public-private relations and public policy.
With his dedicated team, Bora unfurls the untapped potential of Cambodia’s economic sector to prospective foreign investors, aiming to usher them into the vibrant Cambodian market. Beyond simply championing Cambodia’s economic allure, Bora’s team at BGA lends its expertise to clientele – both investors and businesses – across Cambodia and the wider region, helping navigate business challenges, pinpointing fresh investment prospects and aiding the expansion of their Cambodian operations.
Reporter Ung Kim Oan sat down for an exclusive interview with Chhay Bora who delved into these topics.
In your view, what defines Cambodia’s economic potential?
Cambodia, prior to the global Covid-19 pandemic, marked strong economic strides, clocking in an average yearly growth rate of nearly 7 per cent between 2003 and 2019. Despite facing the brunt of the pandemic and sundry external tribulations, the Cambodian economy stands unwavering, steering towards swift recuperation. Data from the Ministry of Economy and Finance indicates an anticipated economic expansion of 5.6 per cent in 2023, spiralling to 6.6 per cent by 2024.
The Cambodian government has spared no effort in catalysing the nation’s development trajectory. A testament to this is the raft of bilateral and multilateral free trade agreements inked with nations including China, Korea and the comprehensive economic partnership agreement with the United Arab Emirates, alongside regional and ASEAN-based multilateral accords.
Furthermore, Cambodia finds itself in the thick of discussions for sealing more free trade agreements with a variety of countries. The endgame is to amplify the investment potential and thereby augment the export market diversification for Cambodian goods crafted for international markets.
Beyond these agreements, could you shed light on the tangible measures the government has rolled out to craft an open and accommodating milieu for investors?
I’ve noted the government’s proactive stance in sculpting laws and regulations. A case in point is the new investment law, which saw daylight in late 2021. This legislation bears immense promise for investors, courtesy of its attractive incentives, streamlined approval mechanism and a plethora of advantages for both domestic and overseas investors.
On the whole, my outlook for Cambodia’s investment sphere in the forthcoming years is resoundingly optimistic. The nation is poised for sustained growth, propelled by the migration of production units from regions grappling with hefty labour costs, like China, to Southeast Asian neighbours — especially Vietnam and Cambodia.
Moreover, there’s an anticipation of an influx of foreign investors expanding their operation from Thailand and Vietnam to Cambodia under the Thailand plus one or Vietnam plus one strategy. Unlike Vietnam, where a higher worker turnover rate can cause disruptions, Cambodia offers a stable labour market, making it an attractive destination for factory production investments.
Can you share your economic forecast under the new government?
With the ascension of the new government, I anticipate Cambodia will navigate a trajectory of swift economic growth. The government’s commitment to bolstering resilience and carving out an inviting landscape for business and investment is evident. They’re fostering an open economy peppered with attractive incentives for investors. Additionally, Cambodia’s strategic geographical position in the heart of ASEAN cannot be overstated. It’s a hub for transporting and distributing goods not just within the ASEAN belt but also to powerhouses like China, Korea, Japan, the United States, and Europe.
In tandem with this vision, the government has unfurled a series of ambitious projects to spur economic momentum. These include the crafting of landmark infrastructures like the Funan Techo Canal, enhancements to the Sihanoukville International Port, and the inception of expressways, high-speed railways, and international airports in cities like Phnom Penh and Siem Reap.
Which sectors hold promise for investors, and why?
Several sectors in Cambodia beckon with substantial promise for keen investors. Notable among them are digital technology, tourism, agriculture, energy, and the burgeoning non-garment industry. Tourism stands out as a linchpin of the Cambodian economy, given its role in job creation and poverty reduction. The agricultural sector remains the fulcrum of our economy.
As time has progressed, the agriculture sector has magnetised an increasing number of investors, especially from countries like China, Korea, and Japan. In its bid to bolster the investment environment, the government has amplified infrastructure development spanning roads, electricity, human capital, and technology. Furthermore, to diversify its economic base and diminish its dependency on garments, Cambodia is pivoting towards the non-garment sector. This includes processing agricultural produce, construction materials, spare parts, and electronics, all of which find a fertile ground in Cambodia.
What further actions should the new government contemplate to augment the pace and vigour of the economy?
The new government ought to mull over comprehensive reforms to enhance its current public administration. As it stands, the system is top-heavy, which can act as a drag on socio-economic advancement and obstruct rapid progress. Streamlining the bureaucracy can not only relieve the strain on the national coffers but can also curtail bureaucratic sluggishness in delivering public services. These services are pivotal for the general public, businesses, investors, and also for fostering synergy between various institutions.