Dr Cheng Cheng, chief economist for Made in Africa Initiative, and Dr Sothea Oum, an independent consultant, said if managed properly, the Belt and Road Initiative (BRI) can potentially contribute to Cambodia’s sustainable development goals (SDG).
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In a joint study on the impact of the BRI in Cambodia, the experts exposed the challenges and successes of Cambodia’s close ties with China and the country’s pull in the China-led network of land and sea routes.
They intervened at the ‘Policy Dialogue: Sustainable development and inclusive institutions in Cambodia through the Belt and Road Initiative and the 2030 Agenda’. The dialogue, organised by the United Nations Development Programme in Cambodia, was held at Raffles Hotel Le Royal, in Phnom Penh, on Dec 11.
“If managed properly, BRI has the potential to contribute significantly to Cambodia’s SDGs in terms of sustainable economic growth, job creation, and income generation. These could be achieved through investment in hard and soft infrastructure, trade and investment promotion.
“The BRI could help fill in finance and investment gaps in physical infrastructure. It could also promote industrialization and diversifying sources of growth through investment, trade, knowledge transfer and capacity building,” said the authors of the study.
The researchers presented a paper entitled ‘Equal Cooperation to Achieve Better SDG Performance: Perspective Research on Cambodia and BRI’.
The research aims to study and evaluate potential positive and negative externalities for Cambodia to cooperate with China under the BRI.
Based on both qualitative and quantitative research, the study makes policy recommendations, such as to capitalise on “political trust” with China.
“The study also takes into account the national needs and priority to strengthen Cambodia’s productive sectors, integrate and align BRI into national and sectoral strategies and plans, as well as in commitments to regional agreements, and ensure sound policy and institutional structures at the national level to encourage policy coherence and SDGs mainstreaming,” they said.
The experts argued that Cambodia stands to benefit significantly from the growth of China. Over decades, Cambodia has fostered closer ties in both economic and political fronts, through bilateral and regional arrangements, with Beijing.
However, despite the progress under the ‘Cambodia Vision 2030’, which came out in 2012, there are still many development challenges facing Cambodia. But successes are altogether evident.
In the economic aspiration, the government set a target for the country to reach an upper-middle income status by 2030 and a high-income status by 2050.
The Cambodian government has also committed to the 2030 Agenda for Sustainable Development and the SDGs in 2015 and has made some strides on SDGs.
“The incidence of poverty has declined, and human development improved,” the study said.
Dr Phim Runsinarith, consultant at the United Nations Department of Economic and Social Affairs, who presented a paper titled ‘Regional Perspectives on BRI and SDGs’, concurred on BRI’s potential in promoting inclusive growth and sustainable development.
“Cambodia is a strong supporter of BRI and is one of the founding members of the Asian Infrastructure Investment Bank (AIIB). In fact, Cambodia has benefited greatly from China’s foreign direct investment (FDI) over the past decades and the BRI will further make the economic cooperation comprehensive, strategic and long term.
“There is no doubt that the underlying principles of the BRI – such as connectivity, unimpeded trade, money circulation, industrial capacity cooperation, policy communication, and cultural exchange, among others – are highly compatible with Cambodia’s policy priorities,” he said.
According to Mr Runsinarith, in the wake of the BRI, Cambodia and China are witnessing an ever-growing relationship.
There is policy coordination between both countries in the form of coordinating committees, industrial development policies, and China-ready tourism policies.
The BRI has also facilitated connectivity in the form of the development of the seaports (Sihanoukville and Kampot), airports (Sihanoukville and Siem Reap), the Phnom Penh-Sihanoukville expressway and the Siem Reap-Kampong Cham Road, NR 6A.
In the form of trade and investment, there is the Sihanoukville Special Economic Zone, Chinese FDI amounting to $1.4 billion and a trade figure of $6 billion.
The two nations have grown increasingly close in recent years. Funds from China – in the form of FDI and government aid – have been a boon to Cambodia.
However, it is difficult to trace which of these funds and the projects they support are linked to the BRI.
Similar to the Chinese donations to Cambodia, which are not done through regular channels, it is hard to account for the BRI fund allocations in Cambodia’s structural and economic development.
This issue was tackled by some of the speakers at the dialogue. The most critical comments surrounding the lack of formality – or rather, the lack of conformity about the BRI – were the absence of an official body to identify specific funding and development projects under the BRI.