Despite traditional barriers to investment, including endemic corruption, weak rule of law and the high cost of electricity, Cambodia’s fast-growing economy and liberal investment climate continue to attract US companies and provide solid returns for those already here, the head of the American Chamber of Commerce in Cambodia said yesterday.
“It’s no secret we have been rocking along at 7 per cent growth per year, and American companies continue to come here,” AmCham Cambodia chairman Bretton Sciaroni said.
“[Cambodia] still has issues and is not a 100 per cent user friendly environment,” he said, adding, however, that the Kingdom was still reaping the benefits of investment policies that set up “probably the freest market of all Southeast Asia countries”.
Sciaroni’s remarks come on the back of a newly-released ASEAN Business Outlook Survey 2017, issued this month by AmCham Singapore and the US Chamber of Commerce, which highlighted that 88 per cent of American businesses in Cambodia expect to earn a profit next year and 27 per cent plan to expand their business operations.
The survey, which included responses from 26 of AmCham Cambodia’s 98 members, noted marginal improvements compared to last year’s survey in the perception of how unofficial bribes to government officials affect the business environment.
“Corruption remains an issue, but I applaud the government for what they have been doing,” said Sciaroni, noting specifically the prosecution of Lay Tharoat, a Council of Development of Cambodia (CDC) official, who was charged last Friday for obtaining illicit funds from investors after being arrested in May.
Nevertheless, respondents said the main stumbling blocks for business expansion was the difficulty in finding a high-skilled workforce, while the availability of low-cost labour declined from 67 per cent satisfaction rate last year, to 50 per cent satisfaction this year.
Meanwhile, according to the survey, satisfaction with government agencies remained widely neutral.
“Respondents are generally neutral about government agencies in Cambodia. No agencies receive a satisfaction rate of higher than 50 per cent or a dissatisfaction rate of higher than 40 per cent,” the report read.
American businesses in Cambodia saw the greatest potential of expanding into other frontier markets like Myanmar and Laos, and the more established Vietnam. They also expected less impact from China’s economic slowdown than American firms operating in other ASEAN countries.
“Laos, Cambodia and Vietnam have reaped the most benefits [from a Chinese slowdown], while those in Indonesia, Thailand and Singapore are among the most negatively affected,” the report read.