Key Figures and Their Forecasts for Cambodia’s Economy in 2017

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Thong Khon, Minister of Tourism
In 2016, about five million overseas tourists visited Cambodia, a positive sign for the country’s tourism sector. Under government policy, the Ministry of Tourism established the Chinese Ready, White Book to attract Chinese visitors to Cambodia. With the push to get tourists from China, hotels, restaurants and other tourism related businesses were asked to increase their awareness and products to cater to the Chinese market. There were also upgrades to infrastructure linking tourism destinations to make transportation between sites easier for the visitors.
Late this month, it was announced that the international airport at Sihanoukville will have its passenger terminal and taxiway renovated to enable larger aircraft to land and take off. This will help increase the number of tourists from China, Russia and other countries who prefer to visit the beaches and coastal areas of the province directly.
For 2017, I expect that the tourism growth rate will be achieved at between seven and 10 percent. Based on the endeavors of the Ministry of Tourism in promoting the potential of our tourism sector domestically and internationally, the growth rate will be healthy next year.
The ministry has tried and will continue to increase the number of tour guides to serve the large number of tourists visiting Cambodia in the future. The government aims to attract at least seven million foreign travelers to Cambodia annually by 2020.
Hean Vanhan, Director-General of Agriculture at the Ministry of Agriculture, Forestry and Fisheries
In 2016, Cambodia is expected to have more than 10 million tons of husked rice in both the rainy and dry seasons and after local consumption, animal feed and reserve seeding for the new season, Cambodia will have four to five million tons of husked rice to keep in stock as well as to process for export.
For market mechanisms, we will look not only at the prices for agricultural products, but the Ministry of Agriculture has a different perspective and we will encourage and help farmers to work with buyers and improve their negotiating skills. We ask farmers to do contract farming in order to keep the sustainability of the market mechanism. By doing so, we have regulations and laws to build the farmers’ trust in contract farming.
There are many challenges and risks in agriculture, but the most important issues here are natural disasters, droughts and market access.
First, most of our farmers depend on rain for cultivation since we lack irrigation systems. The second is market risks. We cannot guarantee that the international market will be stable. Thus, we have to work closely with the Ministry of Commerce and other relevant stakeholders to closely engage with markets – both the domestic and international market.
The agriculture sector is not the only sector the Agriculture Ministry has to oversee, even though it is the country’s economic backbone.
We need to coordinate with the Ministry of Rural Development and the Ministry of Water and Meteorology, so three ministries can solve the issues in the agriculture sector. We have the same mechanisms to work together.
In Channy, President and Group CEO of Acleda Bank
The financial sector has been performing very well in the past year thanks to an improvement in the economic performance of the country.
We saw demand for the source of funds for business expansion and activities were still there.
My outstanding loans amounted to $2.7 billion for the year end, which increased by 13 percent, while deposits went up 20 percent and reached about $3.2 billion, while Acleda’s profit after tax was about $120 million for the year.
However, the industry suffered a big impact from the bad weather early this year, which affected loans for agriculture over the first few months of the year.
I still have a positive outlook for the financial industry in the year 2017. It will keep growing as the demand for loans keep growing, which is responsive to economic activities as many other international financial institutions predict that our economic growth will be seven percent next year.
Van Sou Ieng, President of the Garment Manufacturers Association in Cambodia (GMAC)
Now the garment sector has grown noticeably, with more buyers starting to order clothes, shoes and other textile products from Cambodia. More buyers are shifting their orders from Vietnam to Cambodia due to the policy of US president-elect Donald Trump, who does not want to be part of the Trans-Pacific Partnership (TPP) agreement. We also see that exports to the EU, Canada and Japan are rising. Our exports have risen about nine percent from 2015. Cambodia’s political stability and peace has also been the catalyst to build trust with buyers and investors, especially in the textile industry. Overall, the garment sector in Cambodia is getting better now.   
A lack of raw materials is our concern. One thing we want the government to do is to clear the complicated procedures and documents needed for importing and exporting the raw materials to and from Cambodia from neighboring countries since there is too much bureaucracy, corruption and complicated controls on importing raw materials to Cambodia. We want the government to consider not strictly checking the imported raw materials from China or Vietnam. We want these imports to flow without complicated procedures.
Our garment sector in 2017 will be better than 2016 since there is now the union law, and all unions are educating their workers about the new law. It will improve the garment sector by about 50 percent. Secondly, is there is no TPP, there is no competition and thirdly our productivity will be improved because we now have the Garment Training Institute. And last but not least, political stability and peace in the country have contributed to push growth in the garment sector next year.
Kim Heang, the newly re-elected president of the Cambodia Valuers and Estate Agents Association (CVEA)
The country’s construction and property sector has been growing remarkably over the last few years as we have seen the flow of foreign investors injecting a lot money into the industry between 2012 and 2014 as well as in 2015. It has been a time of construction as well as selling.
Of course, 2016 has been a great year with momentum and changes in the industry. I have observed that the trend or focus has been from the high-end and middle-class customers to the lower-medium customers. Starting mid-2016, you could buy a condo for a price of $50,000 per unit, while before it was at least $100,000 per unit. The housing developers are also constructing places at more affordable prices for lower- to medium- income people, which means they can buy a flat from between $20,000 and $25,000 per unit.
I also noticed that many developers also change their behavior from building high priced houses to just cutting plots of land for sale and this has been very popular among the lower to middle income people. This is happening in many other provinces too, not just Phnom Penh.
This doesn’t mean that the industry is backward – it is still very good – it’s just that demand from the middle income people has risen and they already own some property.
I think 2017 will be a great year for those who have the money to buy cheap property because the general election is approaching and some people will start selling their land or houses because they are afraid. There is nothing to fear about the election, but that is some people’s mindset. I dare to say that 2017 will be a great year for buyers and a great year for construction of houses for lower to middle income people. Even if build your house about 18 or 20 kilometers from Phnom Penh, there is still huge demand.
I don’t see any risks for the industry because the developers and industry insiders are very smart and switched on to the trends and follow changes of the industry.
Faizai Izany Mastor, MATRADE Trade Commissioner in the Consulate General of Malaysia Trade Section in Ho Chi Minh City, Vietnam.
Cambodia is an important trading and investment partner for Malaysia. Malaysian companies are always encouraged to create strategic collaborations with Cambodian partners that will benefit both parties to penetrate Asean and the global markets. In 2015, Malaysia was ranked the seventh largest trading partner for Cambodia.
On the other hand, Malaysian investments in Cambodia have also showed consistency over the last five years. During the period of 2011 to 2015, Malaysia maintained its rank as the seventh largest investor in Cambodia. Malaysia’s total investments from 1994 to July 2016 was valued at $3.37 billion with 127 registered projects.
The outlook of bilateral trade and investment between Cambodia and Malaysia is very promising.
Exchange of high level visits by the leaders as well as private sector delegations and enterprises of the two countries will further strengthen business linkages.
With tariff reductions in the AEC to be fully implemented by 2018, it is expected more trade and investments activities will happen in Cambodia, especially involving the Malaysian business community.
Keo Mom, President of the Cambodia Women Entrepreneur Association (CWEA)
Since being officially formed in 2012 with 14 members, CWEA now has 370 companies as members. The association has helped members to organize training courses to strengthen their capacity and their independence in management skills. In 2016, the association received funds from the Swiss Development Cooperation and Coca-Cola.
The funds have been used to organize training courses monthly. We also have cooperation with ministries and organizations. What we have seen through the ongoing training courses is our members can build up their skills and their active involvement in business. Originally, due to tradition, women could not present themselves in social work, so through the training courses, they can step by step get involved in social work to share their experiences.
In 2017, we will continue to push for lower interest rate loans for women. We will continue providing training courses related to increasing production with quality and cut down production costs so we can compete with imported products. We have sent our members to get trained overseas and we will continue doing this because learning at an international level is very important to absorb new ideas, gain knowledge, innovation and building capacity and production.
Sinn Chan Sereyvutha, spokesman for State Secretariat of Civil Aviation (SSCA)
We have seen a 22 percent increase in local flights, a nine percent increase in international flights and about 500,000 local passengers, an increase of about 13 percent. Cargo transport has also dramatically risen about 67 percent due to increases in trading activity and manufacturing. We are now gaining more confidence from local and international travelers to Cambodia due to the fact that Cambodia gained an improved result at a recent inspection by the International Civil Aviation Organization. It revealed that Cambodia does not have significant safety concerns and it will fix the mentality of foreign travelers to have confidence in Cambodia. In total, our result was satisfactory, but not excellent.
The government has the vision to have a new airport, but it has not happened yet. Although our airports are crowded, we can handle it. Our only issue is concerns the infrastructure of landing strips. Now our airport in Phnom Penh can receive about seven million people in the next 10 years. For Siem Reap Airport, we will expand but we cannot fly over the Angkor Wat temple, so this is a concern.
Our aim is to have a new airport if the present one gets too crowded. We have a plan to build a new airport with help from French company Vinci, which received the concession to develop and manage Cambodian airports and it has conducted a study on a location in the west of Phnom Penh at Kampong Speu or Kampong Chhnang, in the north at Oudong and in the east at Dom Dek. Vinci has hired experts to do this.

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