Business and investment activities are largely proceeding as usual “with no concern at all” in the run-up to the general election on July 23, despite a minor decline in overall consumer purchasing power, pundits have said.
The official campaign period for the seventh quinquennial vote runs from July 1-21, and the National Election Committee (NEC) reported that over eight million of the more than 9.7 million registered voters received the election information cards distributed by its working groups during a door-to-door campaign that ended on June 26.
Royal Academy of Cambodia economist Ky Sereyvath commented that the domestic economic and political climate has seemingly remained normal on the whole since the election campaign period kicked off on July 1.
Sereyvath said that businesses are running normally and that there have been no indications of significant panic buying, which he highlighted would trigger price hikes.
“As of right now, we have seen no barriers to trade or economic activity in Cambodia,” he said. “People typically rush to buy rice and noodles, and hoard food in order to avoid being engulfed in political imbroglio, which highlights the difference in how people view this election compared to past ones.”
“Now, though, I can see that our people are also willing to put some money away. Instead of going to the bank to get cash, they opt to save money from their paychecks or daily business earnings and limit their spending.
“At the same time, our economy seems to be cooling due to lower consumer spending. However, just because some people prefer to save money during the election season, this does not necessarily imply that the economy is not functioning.
“On the contrary, this underscores how much the political climate here has improved, as evidenced by the lack of concern and fear about the future among the populace,” Sereyvath added.
“Nevertheless, although vendors and companies are working normally, their revenues are declining as a result of consumers’ apparent unwillingness to spend much.”
Song Saran, CEO of Amru Rice (Cambodia) Co Ltd, a major rice exporter and miller, corroborated Sereyvath’s observations on the evident absence of significant panic buying, food hoarding or similar behaviours, which he noted have been seen during previous election seasons.
“I don’t see any major issues with the forthcoming election; things are better than ever,from my perspective as a local entrepreneur.
“The most pressing challenge for us today is the global economic downturn, which is particularly acute in Europe and the US, as certain sectors of China’s economy decelerate as a result of ongoing issues bred by the Russia-Ukraine war,” he said, assuring that domestic milled-rice prices remain stable.
Prominent foreign investor Anthony Galliano, the group CEO of Cambodian Investment Management Holding Co Ltd, described the election as “business as usual with no concern at all”.
“The Kingdom is experiencing a renaissance period the last two decades with unprecedented economic growth and prosperity, with near poverty elimination and exponential per capita growth income growth, and at the same time peace and stability,” he said.
“Despite economic challenges over this 20-year period – substantially global in nature such as the financial crisis of 2018 and Covid-19 – the government has a proven track record of astute and superior financial and fiscal management and emerges from these crisis better than most.
“We are observing stable if not increased investment in the Kingdom with little mention or discussion of the elections from international investors.
“Nevertheless, there have been inquiries from the international press, which remain persistent in negativity and fail to recognise the economic and social achievements of the Kingdom, and its incredible pace of development.
“It is encouraging that government officials are making personal appearances and mixing with the population, which is being well received. On the face of it, these events are harmonious, joyful and positive, with no signs of adverse reactions. Businesses are assessing this as continued political and economic stability, which is a critical investment criteria.
“This is expected to be a non-event in the business community and more of a ritual than otherwise. There are no signs of anxiety or concern from the general population.
“If you live in Cambodia long enough and understand its people, it is obvious that the over-whelming portion of the population is happy with the improvements in their standard of living and recognise the period of the Kingdom’s economic prosperity, and are not aspiring for the uncertainty of change,” Galliano claimed.
The government has kept its baseline projection for Cambodia’s economic growth this year at 5.6 per cent, which was announced in late January, marking a sharp drop from the 6.6 per cent put forward in October, according to the current draft version of the Strategic Budget Plan 2024-2026.
The document also presents a baseline estimate of 6.6 per cent for Cambodia’s economic growth in 2024 – despite uncertainty in the outlook at the regional and global levels.