Cambodia has issued a fresh invitation to Vietnamese business players to explore investment opportunities in the Kingdom, including for co-investment with Cambodian entities, to maximise the benefits of bilateral and multilateral cooperation frameworks, as trade between the two countries increased over 22 per cent on-year to pass $4.6 billion in the January-September period.
Prime Minister Hun Sen made the proposal at this year’s Cambodia-Vietnam Investment and Trade Promotion Forum held in Phnom Penh on November 8, according to a statement posted on Hun Sen’s official Facebook page.
The premier commented that the two neighbouring countries have maintained good diplomatic relations, “especially before the advent of Covid-19”, and that the number of Vietnamese investors in Cambodia had been steadily rising prior to the pandemic, although there have been “no positive signs” in the two years since.
“I encourage Vietnamese investors to put in more money and do more business in Cambodia, especially in areas showing great potential, such as modern agriculture, food processing and light manufacturing,” Hun Sen said, highlighting agriculture and telecoms as two popular choices for Vietnamese investors in the pre-Covid era.
He said the government has continued to launch and implement strategic policies and roadmaps to underpin efforts to consolidate post-Covid economic recovery and growth, as well as to boost Cambodia’s attractiveness and competitiveness towards driving up domestic and foreign investment.
The Kingdom has also forged ahead in its pursuit of bilateral and multilateral free trade agreements with a variety of partners to improve access to foreign markets for local goods, he noted.
“I welcome the wise decisions of all foreign investors, especially Vietnamese investors, who have opted or intend to select Cambodia as a potential investment destination to start or expand their business,” Hun Sen said.
He asked Vietnamese players specifically “to learn more about the potential and investment opportunities in Cambodia and decide to invest or co-invest with Cambodian investors to maximise the benefits of bilateral and multilateral cooperation”.
Speaking to The Post on November 9, Cambodia Chamber of Commerce vice-president Lim Heng remarked that, given its lack of warehousing, processing and packaging facilities, the Kingdom heavily relies on Vietnam to bring its products to international markets, and that a significant uptick in bilateral trade would provide economic tailwinds for both countries.
He argued that “it is necessary to facilitate the exchange of goods and mutual investment between the two countries, because due to their shared border, one country’s economic troubles will in turn cause negative effects on the other”.
General Department of Customs and Excise (GDCE) data show that although commodity trade between the two countries reached $4.634 billion in the first nine months of 2022, up 22.02 per cent year-on-year, the Kingdom’s trade deficit with its neighbour for the period expanded by 96.05 per cent on a yearly basis to $1.514 billion.
Heng downplayed the increased trade deficit, reasoning that due to its position on the development ladder, Cambodia requires construction materials, fertilisers, machinery and other resources to build itself up.
For reference, in the January-September period, Cambodian commodity exports to Vietnam amounted to $1.560 billion, up 3.13 per cent year-on-year, and imports $3.074 billion, up 34.53 per cent.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said more favourable conditions for imports, exports and direct investment between the two adjacent countries would deliver a consequential boost to economic growth in either nation.
He surmised that Cambodia could leverage transport infrastructure to reinforce diplomatic and trade cooperation with Vietnam, offering as an example the Phnom Penh-Bavet Expressway, which ends at the Vietnamese border.
“Strengthening the quality and production of goods with high demand on target markets is essential to boosting Cambodia’s exports,” Vanak added.