The new Cambodian government has launched its Pentagonal Strategy, which aims to safeguard peace and accelerate national economic development
Historically, the Kingdom of Cambodia and the former Socialist Federal Republic of Yugoslavia formally established diplomatic relations on 15th July 1956, led by late King Norodom Sihanouk and former President Josip Broz Tito, and those relations have been updated to this day. Diplomatic relations between Cambodia and the then Federal Republic of Yugoslavia (Serbia and Montenegro) were re-established in 1993, and in 2009 Cambodia and Serbia established diplomatic relations that resulted in the 2019 reopening of the Cambodian Embassy in Belgrade.
“As Cambodians, we cannot forget the great merit of former Prime Minister Samdech Akka Moha Sena Padei Techo, Hun Sen, who played important roles in ending the civil war and maintaining stability and economic development during his rule of recent decades.
“After the general elections of 23rd July 2023, the government was formed and led by Samdech Moha Borvor Thipadei, Hun Manet, as Prime Minister of the Kingdom of Cambodia. It was during this 7th mandate of the legislature that the new government launched the Pentagonal Strategy, aiming to safeguard peace and accelerate national development,” note officials from the Embassy of Cambodia, Serbia.
ECONOMY
Cambodia has been among the top-performing economies in Asia over the course of two decades. As the country emerges from the social and economic impacts of the pandemic, a rapid return to the high levels of growth seen prior to Covid is now anticipated. Cambodia’s GDP growth stood at 5.2% in 2022 and is forecast to grow by 5.3% this year and 6% in 2024, according to the Asia Development Bank. Cambodia will benefit from its geography and free trade agreements, including bilateral and regional ones like CCFTA, CKFTA, ACFTA, AKFTA, AANZFTA etc.
Import-Export Partners:
Cambodia imports from ASEAN countries, China, the EU, Japan, South Korea etc., while it exports its products to the U.S., EU, ASEAN, China, Japan, Canada, UK etc. The trade balance reached $52 billion in 2022, despite the country having to confront the Covid-19 pandemic. In response to global trade concerns, the government has introduced a number of measures to reduce production and supply costs and encourage further foreign investment.
INVESTMENT LAW
The Cambodian Investment Law aims to establish an open, transparent, predictable and favourable legal framework to attract and promote high-quality, effective and efficient investment by investors without discrimination or nationalisation, protecting investors’ rights etc.
Investment incentives are offered in 19 sectors in Cambodia: 1) High-tech industries, 2) Innovative, 3) Supplying regional and global production chains, 4) Supporting agriculture and tourism, 5) Electronics, 6) Spare parts, 7) Mechanisation and machinery, 8) Agriculture, Agro-industry, Agro-processing and food processing, 9) Small and medium-sized enterprises, 10) Tourism-related activities, 11) Special economic zones, 12) Digital transformation, 13) Education and vocational training, 14) Health, 15) Physical infrastructure, 16) Logistics, 17) Environmental management and protection, and biodiversity conservation and the circular economy, 18) Green energy, 19) Other sectors and investment activities not listed by this Law deemed by the Royal Government of Cambodia to have potential for socioeconomic development.
The special economic zones are entitled to offer investment incentives and provide companies with all access to land, infrastructure and services to facilitate the set-up and operation of businesses.
In addition to all this, the sections of the aforementioned incentives also include: utilities, tax services, tax holidays, zero rate VAT, import duty exemption for raw materials, machinery, equipment and customs clearance, and other administrative services.
TOURISM
Cambodia’s tourism industry is also a key economic pillar, contributing to the country’s socioeconomic growth, job creation and poverty reduction. This kingdom of wonders attracted 3.5 million foreign visitors (250.8%) in the first eight months of 2023. It has so much tangible and intangible heritage that numerous sites have been registered as protected World Heritage sites, including Angkor Wat, Preah Vihear Temple etc.