Cambodia is emerging as one of the region’s most attractive countries for new business expansion and investments, driven by political stability and high economic growth over the past two decades, according to Royal Cambodian Armed Forces (RCAF) deputy commander and Royal Cambodian Army (RCA) commander Lieutenant General Hun Manet.
The army chief made the remarks at the September 30 inauguration ceremony for RMKH Glove (Cambodia) Co Ltd’s $80 million glove factory in the Manhattan Special Economic Zone of Svay Rieng province’s Bavet town.
The eldest son of Prime Minister Hun Sen, Manet has been officially endorsed by the ruling Cambodian People’s Party (CPP) as a future candidate for the top office after his father’s retirement.
The government has and will continue to step up efforts to create more conducive conditions for exports and drawing in foreign direct investment (FDI), he said.
“The enactment of the new Law on Investment aims to enhance competition and encourage investors to invest and do business in Cambodia, by providing a wide range of incentives, especially fiscal favours.”
At the same time, the government has worked hard to strengthen national economic resilience, by increasing the capacity and technical skills of the labour force, and turning local enterprises into strong foundations of socio-economic development, he added.
These tasks, he said, require the participation of all major partners, including special economic zones (SEZ) and national and international companies, along with their employees and other workers.
“Over the last two decades, Cambodia has become a major destination for FDI, resulting in one of the world’s fastest growing economies, with an average annual growth rate of more than seven per cent,” Manet said.
For reference, between the August 5, 1994 promulgation of the old Law on Investment and December 31, 2021, Cambodia recorded a cumulative total of $41 billion of FDI, marking an 11.2 per cent jump from end-2020, according to the National Bank of Cambodia.
Similarly, at end-September, the World Bank (WB) raised its 2022 growth forecast for Cambodia’s real gross domestic product (GDP) to 4.8 per cent, from 4.5 per cent in April.
“In the second quarter of 2022, the economic recovery gained momentum as investment and trade expanded. Approved FDI project value reached $315 million in the second quarter of 2022,” it said in its latest Macro Poverty Outlook (MPO).
In 2023, the Kingdom’s economic growth “is expected to improve to 5.2 per cent, supported by recovering domestic consumption as employment rates improve along with strong government consumption during the election year and inflation recedes”, the Washington-based multilateral lender added.
Manet noted that the Medtecs Manhattan Group’s gargantuan investment – through RMKH Glove Cambodia – in the modern, large-scale medical glove factory in the border town with Vietnam was initiated last year during worse periods of the Covid-19 crisis.
“This is a testament to the company’s confidence in and commitment to sharing the highs and lows with the Cambodian government and the people. The investment also represents the firm’s important contribution to the socio-economic development of Cambodia, especially in stimulating post-Covid-19 economic growth,” he said.
Bavet has become a major production centre, hosting several SEZs comprising a total of 178 factories that cover the full range of sectors and employ more than 90,000 people, he added.