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Key stakeholders report Kingdom’s investment climate friendly, favourable

Poovenraj Kanagaraj / Khmer Times Share:
Cambodian farmers use boats to harvest water mimosa, a popular vegetable dish, at a farm in Phnom Penh.The country has recently started to diverse its crops to attract investment. AFP

In a series of interviews conducted by a World Economic Forum team with key stakeholders across policymakers, firms, business associations and researchers, amounting to 41 separate entities,  firms have reported Cambodia as possessing a friendly investment and business environment.

The feedback was compiled into a report titled, Sustainable Investment in Cambodia: Policies and measures for the Kingdom’s consideration.

The firms interviewed had compared the Kingdom favourably with its regional neighbours. While challenges are bound to happen in the country, there have been measures that are identified to have had significant development impact through job creation and skills acquisition, for instance.

The report introduced a comprehensive sustainable investment framework that could potentially serve as key to creating an alignment with environmental, social, economic and governance principles.

The framework introduces five dimensions as guidance: sustainable investment policies, sustainable finance mobilisation, sustainable investment promotion, sustainable investment facilitation and sustainable development impact.

The report further highlights supply chain and labour standards, environmental and social impact assessments as well as responsible business conduct and guidelines.

Further suggestions include, consideration of supply chain standard integration in domestic regulation that will ensure that investor source inputs are sustainable through due diligence and tracking the supply chain.

The use of Environmental and Social Impact Assessments (ESIAs) was also encouraged to ensure sustainable investment and this will see economy-accredited EISA firms and international firms sharing international best practices.

A particular area of focus in the report was the agro-industry because investment in the sector can lead to further creation of employment, income growth in rural communities and development of support skills. Investments will also potential see the strengthening of value chains and bolster food security.

Cambodia has recently diversified its range of agricultural products and moved into higher-value crops. This has been seen as a positive development and one that attracts investment into the sector that will play a significant role in further transforming it in coming years.

The Royal Government of Cambodia (RGC) has welcomed investments into the agriculture sector with open arms. It saw the sector absorb 11.5 percent ($4 billion) of approved foreign direct investment (FDI) into the country.

The forum team has proposed integrating principles elaborated by the Asean, Food and Agriculture Organisation (FAO), the UN Conference on Trade and Development-World Bank and Organisation for the Economic Cooperation and Development Food and Agricultural Outlook.

Furthermore, the report has suggested the RGC should consider expanding the priorities of the new Small Medium Enterprise (SME) Bank to include investments in low-carbon use by SMEs including in the agribusiness sector.

Suggestions were also made to the government to provide incentives for the import of agricultural inputs as well as the potential to extend incentives already applied to rice to other commodities and crops that have been identified in the RGC’s Agricultural Sector Strategic Development Plan 2019-2023.

The report was undertaken in collaboration with the Council for the Development of Cambodia and with the support of Grow Asia’s Cambodia Partnership for Sustainable Agriculture.

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