Cambodia 2040 Economic Development

DETH Sok Udom, Bradley J. Murg, OU Virak & Michael Renfrew

Cambodia has experienced drastic changes since the signing of the Paris Peace Accords in 1993. Twenty-five years later, Cambodia is a lower middle-income country with consistently high GDP growth rates and concomitant improvements in human security as measured by the Human Development Index (HDI). The question that Cambodia confronts today is a seemingly simple one, but which is in fact remarkably complex: Whither Cambodia? From energy to industrialization to agriculture, how are the diverse sectors of Cambodian society and the Cambodian economy likely to develop over the next two decades?

Mrs. KRUY Narin

From being largely reliant on agriculture, in 2040 the Cambodian economy has developed into one that is industry-based; from being labor intensive and narrow, its economy is now skills-based and diversified. The population enjoys higher standards of living and better conditions in smart and green cities, with access to quality healthcare and education systems, inclusive social security, and efficient public services. Strong political will and bold reform efforts have been key in effectively addressing structural weaknesses to improve the investment climate, reduce business costs, enhance trade facilitation, and address skills shortages. This has provided a conducive environment for Cambodia to strengthen its competitiveness and attract more quality foreign direct investment for economic diversification, with a focus on higher value-added goods and services. Complications and costs regarding doing business in Cambodia have been reduced drastically, with investors well informed of the registration processes that turn over in a matter of a few business days.

Mr. CHEAN Sithykun

Dara has recently relocated the headquarters of his digital marketing company to Phnom Penh. Encouraged by the growth of industry in the kingdom, the move was largely motivated by the low level of corporate taxation when compared to his previous base in the region. This additional revenue for the company has been instrumental in the firms’ recent success. The ability to invest in the latest software and training has led to a reputation for quality that is now in high demand: so high that the team has doubled in personnel. Thankfully the national e-payroll system is streamlined to reduce the burden on companies. One code per company, one code per resident, easy to track for Dara, and easier to collect for the administrative system.

H.E. Dr. PHU Leewood

The date is July 30, 2040 and Mr Khemara, a farmer from Takeo province, has just finished planting his rice crop. Leaving his family to tend to the crop before the harvest period, he departs for seasonal work across the border in Thailand. As he waits in the airport for his flight to depart he thinks back to his first cross- border excursion as a young man of 16. At that time, he would cram himself into the back of an unsafe minivan heading across the border with the hope of being picked up by a generous employer.

Mr. SOK Kha

“JapanCorp” is a Japanese multinational corporation that produces machinery components and electronics devices. The company owns multiple production plants in several countries in Asia, including Cambodia. The decision to open their factory in Cambodia was driven by a combination of the firm’s risk diversification program, enhanced market access in the region, and the availability of skilled Cambodian labor. In addition, the operation was at minimal cost due to the RGCs pro-trade and pro-investment policies.

Mr. DARAVUTH Sithy Rath and Mr. VRAK Thanit

At 26 years old, Ms. Sovann was recently appointed as the first Tech Ambassador to Phnom Penh. On a particularly pleasant Tuesday morning she is on route to attend a business meeting at the Sokha Hotel with representatives and serial entrepreneurs from major tech companies from Silicon Valley. They are interested in expanding their connections with domestic digital FinTech companies in the city.

Dr. HENG Pheakdey & Ms. Maureen Boyle

Can we see a future Cambodia as a society that has reduced its energy demand and dependence on imported fuels such as oil and coal and moved towards forms of renewable energy such as solar, wind, and biogas? We can view this society in 2040 through the eyes of Phnom Penh resident Sothy, who works with a university, teaching students in the department of energy futures.

Mr. OUNG Ty Keithya

Ms. Sothy is a middle-aged woman from a farming household based in a rural village of Kampong Cham province. Her family is practicing crop diversification for their farmland. Primarily the family grows rice, utilizing a drought-resistant seed, as their main source of income. In addition to rice, they also use plots on their farmland to grow other crops such as tomatoes, pumpkins, mangoes, and cassavas. During April, whilst her village is going through a long dry season with very little rainwater, Sothy waters her farm through the irrigated pipelines. The water supply available for this process is being pumped from a communal village water storage. This irrigation and storage system was installed and supported by district authorities, alongside the farming committee in her province. To power her farm, Sothy uses a biodigester in which she inputs waste from farm, both animal manure and farm waste. In return, the biodigester provides her with biogas for clean cooking, and organic fertilizer for better crops and healthier soil. Most households in her village also use this type of clean energy because it is affordable.

Ms. YOU Sotheary

Kravanh is 7 months pregnant and is employed as a cleaner in Phnom Penh. Her husband, Prayuth, works as a garbage collector. She has 7-year old twins living with her parents back in her hometown in Kampong Cham province. Her twins study in grade two at a local primary school located 15 minutes away from her parents’ home. Due to the income level of the family the school provides two free meals every school day, under the “home-grown” school feeding scheme. Helping to support this scheme in their retirement, Kravanh’s parents utilize their 50 square meter backyard to grow vegetables to supply some of the primary schools in their district. While visiting her parents and children during Khmer New Year, Kravanh gives birth prematurely. In a compounding turn of events, Prayuth also finds himself in a traffic accident and in need of medical attention for a broken foot.