2019 is now over but can its legacy of a robust economy, solid export performance, increased domestic demand, rapid development in the construction industry and a generally good business climate be sustained? Khmer Times reporter Sok Chan spoke to some of the country’s leading movers and shakers
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Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia
He says the sector going into 2020 will depend very much on the outcome of the decision of the European Union with regards to the Everything But Arms (EBA) trade deal. “If the EBA is retained, our sector should be able to continue to experience growth,” he said. “We should continue to see a revival in exports to the USA – our exports should continue to experience decent growth to the USA. We expect to see more investors in both garment and travel goods next year.”
Loo added: “Going forward, we will continue to focus on improving productivity and efficiency in our industry. We must continue to invest more in training and the upgrading of skills among our workers. We urge all stakeholders to work together to ensure that our sector continues to thrive even when facing difficulties and increasing challenges.”
In Channy, president and group managing director of ACLEDA Bank and president of the Association Bank of Cambodia (ABC)
The financial sector performed well in 2019 and it will continue to enjoy a healthy growth rate in 2020 because of peace and political stability and the macro-economic situation, he said. In added that Acleda Bank had a total loan portfolio in 2019 of $3.711 billion, up annually 7 percent, while deposits were $4.2billion, a 12 percent increase. It had 2.3 million customers, of which 402,00 had a loan portfolio as of Dec 30. He said non-performance loans were 1.2 percent.
“In 2020, we foresee that the outstanding loans and deposits will increase around 10 percent and 12 percent respectively. The growth will be depend solely on the overall economic growth, peace and stability. Our growth plan is dependent on the economic growth of Cambodia,” he said.
When asked whether the EBA withdrawal would affect the financial sector, In said he has never thought of the EBA as a base to evaluate the financial sector. “We have never used the EBA as the base to forecast our growth because of the fact that Acleda Bank is a retail bank, so our growth will be connected with small and medium enterprises, which are in demand now,” he added.
Ha Jong Weon, vice-chairman and chief operations officer of the Cambodia Securities Exchange
“If we take a look at the Cambodia Securities Exchange [CSX] in 2019, it shows that the market performed well in 2019. According to the report from CSX, daily average trading was $73.55 million in the first 11 months of 2019, while it was only $2.92 million in the same period in 2018.
“The all-time high for Cambodia Securities Exchange index is 870.65 points on Oct 1, 2019. However, the average in the first 11 months of 2019 was 777.66 points. The market capitalisation in the first 11 months of 2019 was $716.07 million from $358.67 million in the same period in 2018.”
“Our mission in 2020 is to find a tech company to join the stock market,” he said. “We would like to see our securities market to be amain platform, introduce and find some good companies to introduce to it.
“In 2020, I guess for the main board, two companies can be listed. For the growth board, two or three can be listed on our exchanges, so a total of five companies can be listed on our exchanges. More than seven companies would like to issue bonds in 2020. Two bond issuers will be from manufacturing companies. Separately, five more companies would also like to issue equity in the market.”
Top Sopheak, spokesman for the Ministry of Tourism
He said that the ministry has already prepared some strategic plans for 2020 to attract more international tourists to visit Cambodia, especially the main tourism destinations – Siem Reap province for instance.
“We expect that the number of international tourists will increase between 10 to 15 percent. We expected 6.6million in 2019 and 7million foreign tourists in 2020,” he added.
“We are now building and strengthening the building capacity, strengthening the quality of products and services, creating new tourism products to encourage tourists to stay longer and expanding the promotion of tourism, especially digitally. We will also work with all stakeholders to improve tourism products in 2020.”
Lim Heng, vice-president of Cambodia, Chamber of Commerce
The growth rate of imports and exports will remain strong in Cambodia for 2020 because we experienced increased growth rate of new businesses registered in the Kingdom in 2019. The country’s real gross domestic product (GDP) will remain 7 percent in 2020, he said.
“We will soon have the Free Trade Agreement (FTA) with China, the Asean-China FTA, the Asean-South Korea FTA and the Asean-Japan FTA. Those agreements will influence Cambodia’s economic growth. Therefore, the growth the country’s GDP will remain strong at around 7 percent,” Lim added.
Mey Kalyan, senior adviser of the Supreme National Economic Council in Cambodia
Mey said that besides the EBA deal, his organisation’s situation is behaving normally. We do not think about emergencies, but we have to think things are normal. I believe they are moving forward.
“If we put in much effort for 2020, we will move rapidly. If we do not, we will go slowly,” he added. “We have the basics and we know the issues, so our GDP will remain around 7 percent or slightly lower than 7 percent if the EBA deal is withdrawn.
“But some issues are beyond the economy, so we cannot foresee them,” Mey added. “The EBA is not good news for society, but what needs to be done in the future of Cambodia is to push the country’s economic resilience.
Mey added that Cambodia has to build a comprehensive economy that is strong and global, “but we cannot solely rely on the rest of the world. We should diversify our products and boost local products to mitigate risk and add value to all stakeholders. We have to do more.
“What Cambodia has to do in the longer term is think about human resources, technology, the investment climate, modernsiation in agriculture and protecting the environment, especially with regard to science and technology. From 2020, we have to tighten our belts because it will not be business as usual, both administratively and in private sector. We are still trying to build the country.”