A senior French official has called on his countrymen to invest more in Cambodia, citing rapid economic growth, a burgeoning middle class and an overall healthy investment climate.
French foreign trade minister Olivier Becht paid a visit to the Kingdom from January 24-25, accompanied by a business delegation led by MEDEF International and Business France, in a bid to enhance diplomatic and business relations between the two countries.
During his visit, Becht was scheduled to meet with members of the “5,000-strong” French community in Cambodia, including representatives of the “very dynamic” business circles, Paris’ embassy in Phnom Penh had noted in a statement.
On January 25, the official and his entourage met Prime Minister Hun Sen at the Peace Palace. Details of the meeting were revealed by the premier’s personal assistant Eang Sophalleth.
Speaking to Hun Sen, the French business delegation voiced confidence in investing in Cambodia, citing the Kingdom’s spectacular leap from ruins to register average annual economic growth of seven per cent for the 20-year period prior to Covid-19, continued reforms, favourable investment environment, and fairly large middle-income class.
For these reasons, Becht said, French investors are sizing up investment opportunities in the Kingdom, in domains such as high-speed rail; land, water and air transport; construction; and energy.
The premier brought up Cambodia’s open investment policy, which he noted generally allows foreign entities to retain 100 per cent ownership of major ventures in the Kingdom.
He touched on a high-speed railway planned from Phnom Penh to Ho Chi Minh City and that the two existing rail lines are slated for expansion, commenting that the private sector is encouraged to apply for the projects, which he said are to be implemented on a build-operate-transfer (BOT) basis.
The BOT model is a form of project financing where the public sector grants concessions to a private entity to build and operate projects for a specified period a time, after which ownership is typically transferred back to the government.
Hun Sen also highlighted a number of priority areas for investment, such as manufacturing and high-tech industries as well as cashew nut, rubber, cassava and rice agroprocessing for the local market and for export.
The premier also pitched solar, noting that clean energy accounts for “about 62 per cent” of power consumed in Cambodia, and is drawing more investment. Additionally, he mentioned calls for the Kingdom to refrain from building additional coal-fired power plants or damming up the Mekong River, according to Sophalleth.
At an early-June event, French Foreign Trade Advisors (CCE) Cambodia Section chairman Arnaud Darc disclosed that the French Cambodian Chamber of Commerce and Industry (CCIFC) counts 150 French companies among its ranks, and that a recent CCE survey had found that there were more than 500 French firms doing business in Cambodia.
According to the General Department of Customs and Excise, the Cambodia-France merchandise trade volume hit $542.369 million last year, up 25.92 per cent over 2021, with the Kingdom’s exports accounting for a 78.02 per cent share, up 1.20 percentage points on a yearly basis.
Cambodian exports to and imports from France reached $423.131 million and $119.238 million respectively, up 27.89 per cent and 19.41 per cent year-on-year, expanding the Kingdom’s trade surplus with the EU’s second-largest economy by 31.55 per cent, from $231.006 million in 2021 to $303.892 million last year.
Last month alone, the Cambodia-France merchandise trade volume was to the tune of $42.20 million, up 4.7 per cent from $40.29 million in December 2021 and up 23.1 per cent from $34.29 million in November 2022.
The Kingdom’s exports accounted for $34.178 million, up 13.19 per cent year-on-year and up 24.2 per cent month-on-month, while imports came to $8.022 million, down 20.5 per cent year-on-year but up 18.4 per cent month-on-month.