Prime Minister Hun Sen on Monday told US companies and investors that although Covid-19 has slowed the growth of Cambodia’s economy, the government has proactively taken measures to keep business activities afloat and the country remains a good investment destination for US firms.
Hun Sen made his comments during the 2020 Virtual Cambodia Business Mission meeting organised by the US-ASEAN Business Council.
The prime minister said the whole world is fighting against the spread of Covid-19, which is severely affecting the economy and society and the government has managed to keep the coronavirus from spreading in the community without shutting down any areas of the country.
However, he said the coronavirus led to huge challenges in the garment and textile, tourism, aviation and service sectors.
He said the Cambodian government had launched five rounds of measures to keep production and businesses afloat and assist those affected in their daily lives.
“I am confident that a number of US companies with a presence in Cambodia have also benefitted [from the measures],” he said.
He said bilateral trade between Cambodia and the US grew by 17 per cent in the first eight months of this year.
“The government doesn’t decelerate reform in all sectors to attract more investors. Once the coronavirus eases, Cambodia is set to pass a new and comprehensive investment law and tax incentives to be more attractive for electronics, equipment assembly, spare parts, agro-agriculture and other industries.
“Cambodia will also sign a free trade agreement [FTA] with China soon. I hope the new investment law and the FTA will be key factors in transforming Cambodia into an attractive destination for US companies that seek new production locations in the Southeast Asian region,” he said.
US ambassador to Cambodia Patrick Murphy said at a Trade and Investment Forum in Phnom Penh early this month that economic ties between Cambodia and the US have been increasing remarkably over the past two decades as bilateral trade, which once stood at $850 million, reached $5.9 billion last year – a seven-fold increase.
He said that the US is Cambodia’s largest export destination with $5.4 billion worth of goods exported from the Kingdom to the US last year.
Despite the current pandemic, exports are up 23 per cent this year.
Murphy said: “Cambodian exports also benefit US consumers by providing choice. There are now more Cambodian products in US stores than ever before.
“These include not only garments and footwear, but also award-winning agricultural products like Kampot pepper and Cambodian rice. You can also find more and more Cambodian-made travel goods in the US.”
The ambassador pointed out that travel goods are a remarkable story after the US granted duty-free access to travel goods in 2016 under the Generalised System of Preferences (GSP) programme to Cambodia which led to an increase from $50 million to nearly $1 billion last year.
“Given Cambodia’s economic progress, and Cambodians preference for high-quality US brands, that number can be much higher. I encourage Cambodians to buy more US products and services. This will help ensure that our trading relationship is free, fair and mutually beneficial.
“While trade is an important part of our economic relationship, investment plays a major role as well. If you tour Phnom Penh today you will see an increasing number of US companies, from hotels and retail stores to restaurants and, further afield, factories,” Murphy said.
He said the US has several tools available to help those interested in trade and investment across the Indo-Pacific.
They include $60 billion in financing to support private sector investment from the new Development Finance Corporation (DFC). Its predecessor, the Overseas Private Investment Corporation (OPIC) has invested over $150 million in Cambodia so far.
The Infrastructure Transaction Advisory Network (ITAN) helps develop high-quality infrastructure and the US is exploring ways for ITAN to support the Kingdom’s development.
Murphy said: “These tools may help unleash new investment in Cambodia. But investment, like trade, can go both ways.
“Given the strength of Cambodia’s economy and the sophistication of its companies, the time is right to promote Cambodian investment in the US.”