Cambodia International Political Economy

Cambodian trade of garments slid 27 percent in January as the global economic crisis continues to take hold in emerging economies according to Business News.

The Cambodian trade decline accounts for a loss of $69 million as Cambodian exports of garments accounted for $246 million in January 2008 but only $177 million in January 2009.

The World Bank has estimated that the decline in Cambodian trade of garments has cost the Cambodian economy as many as 30,000 factory worker jobs.

The US government will continue to invest in Cambodia in 2009 with a similar amount to that of 2008 according to Xinhua.

The US Cambodian investment for 2008 amounted to $5.6 million in aid and according to the US Ambassador to ASEAN the Cambodian investment for 2009 is expected to match at a minimum.

The key areas of focus for the US investment in Cambodia include health, trade and the Cambodian economy.

The Cambodia government plans to launch the Cambodian stock market may be delayed as the global economic crisis continues to take hold of the Cambodian economy according to Xinhua.

While the delay is disappointing, it does make sense as a launch of a Cambodian stock market, considering the current economic conditions, could severely negatively impact equity prices and essential damage the Cambodian economy.

For more on the Cambodia stock market see:

Cambodia Set to Open Cambodia Stock Exchange in 2009

Cambodia Not Ready for Cambodia Stock Market [Read more →]

The International Monetary Fund (IMF) warned that the Cambodian economy faces serious challenges in the wake of the global economic crises according to Reuters.

More specifically the IMF stated that the Cambodia economy would suffer a severe decline in capital inflows and economic activity along with a possible shock to the banking system.

IMF recommendations to the Cambodian government include continued spending on social and infrastructure projects as well as greater flexibility in its exchange rate policy. [Read more →]

Cambodia trade of rubber has declined by 15.2 percent in 2008 according to Xinhua.

The key drivers of the decline in Cambodian exports of rubber point to a fierce competition and falling demand in bigger markets for Cambodian trade such as Malaysia, Vietnam and China.

Cambodia exports of rubber only accounted for an estimated value of 43.2 million in 2008. [Read more →]

Cambodia plans to open its first stock exchange by April of this year to open up the country to further Cambodian investment according to Bloomberg.

The Cambodian government and the Ministry of Economy and Finance have identified approximately twenty companies to list on the Cambodia stock exchange and to allow for Cambodian investment beyond that of Cambodian foreign direct investment.

A few of the companies identified include Acleda Bank and Sokimex Group the countries largest bank and petroleum company respectively.

Cambodia is currently the second poorest country in Southeast Asia.

For more on the Cambodia stock exchange see:

Cambodia Partners with South Korea to set up Cambodia Stock Exchange

Cambodia Passes Law to Open Cambodia Stock Exchange in 2009

Cambodia Government Eyes Stock Exchange as a Means to Boost Cambodia Foreign Direct Investment (FDI)

Cambodia Set to Open Cambodia Stock Exchange in 2009 [Read more →]

The World Bank projects foreign direct investment in Cambodia will come in dramatically lower 2008 according to Reuters.

While there is some discrepancy between the World Banks forecast and the Council for the Development of Cambodia (CDC), the World Bank does expect Cambodian investment of FDI inflows for 2008 to come in around $800 million with a further fall to $600 million in 2009.

According to World Bank spokesperson Huot Chea, the key driver of the drop in foreign direct investment in Cambodian is the global economic slowdown as opposed to political risk. [Read more →]

Both Russia and the International Monetary Fund (IMF) have both agreed to write off large portions of Cambodian debt according to Xinhua.

The relief on the Cambodian economy accounts for 70 percent of its $1.5 billion debt to Russia and $82 million of debt own to the IMF.

The debt relief will help the Cambodian economy significantly as emerging markets continue to battle the global economic downturn.

The Cambodian economy saw inflation decline in October after hitting a high of 22 percent in August according to Xinhua.

While still in the double digits, Cambodia’s consumer price index only grew by just over 18 percent showing an over decline that it is likely a direct result of the current global economic crisis.

From 2005 up until 2008 the Cambodian economy experienced double-digit growth which has lead to high inflation. [Read more →]

The IMF expects the Cambodian economy to slow to just over 4 percent in 2009 according to AP.

These expectations are significantly lower then what the Cambodian government is forecasting for the Cambodian economy which is forecast at 7.2 percent.

Nonetheless, the Cambodian economy grew an average of over 11 percent between the years of 2004 and 2007. [Read more →]

The Cambodian government has enacted new building regulations that could severely limit the attractiveness of Cambodia investment by foreign firms interested in real estate development according to ABC.

While the Cambodian government says the laws are imperative to control the mainly unregulated construction sector, foreign firms see the move as a hindrance to growth.

The new Cambodia investment laws require builders to apply for numerous additional licenses as well as deposit large sums of cash with the Cambodian government before starting a project. [Read more →]

John Negroponte, US Deputy Secretary of State, is planning to sign a Cambodia trade deal on his visit to the country next week according to Xinhua News.

The focus of the Cambodia trade agreement with the US is agriculture and industry.

Official statistics indicate that Cambodia trade with the US is up in the first half of 2008 with apparel exports totaling $1.16 billion up from last years $1.3 billion. [Read more →]

The Cambodian government’s request for $38 Million from the Asian Development Bank (ADB) will go to the ADB board next month according to Xinhua News.

The ADB request by the Cambodian government is proposed to ensure Cambodian food security between through 2011 and is expected to benefit over 500k Cambodians. [Read more →]

The Bank of India has indicated its intent to invest in Cambodia as the Cambodia government has welcomed an initial application by the Indian bank according to The Economic Times.

The Cambodian investment news comes after the Cambodia Finance Minister Keat Chhon met with Indian ambassador Aloke Sen to promote further Cambodia investment by India. [Read more →]

The Cambodia government’s Commerce Minister ChamPrasidh has stated that it will not be affected by Thailand government boycott of fruit exports to Cambodia according to Xinhua News Agency.

The challenge comes as the Cambodian government and the Thai government continues to debate over the Preah Vihear Temple. See: Cambodia Government Seeks UN Intervention Temple Dispute with Thailand

Cambodian trade volume with Thailand increased over 10 percent in 2007 to $1.4 billion according to Cambodian Commerce Ministry. [Read more →]

As expected, the current Cambodian government administration won a landslide victory over the Cambodian opposition party according to AP.

Many Cambodians are concerned that the Cambodian election was rigged raising concerns that one party-rule is damaging it’s the countries democracy.

The Cambodia election results give Prime Minister Hun Sen a new 5 year term. [Read more →]

The current Cambodian government and the Cambodian People’s party (CPP) has claimed victory in the recent Cambodia parliamentary elections according to the Financial Times.

Should the Cambodian People’s party (CPP) continue to control the Cambodia government, Hun Sen, Cambodia’s prime minister would continue his 23 year reign.

Key drivers to the likely victory include a strong economy, a change in the Cambodia constitution that no longer requires a two-thirds majority vote, and the fact the Cambodian government has stood up to neighboring Thailand over the Preah Vihear temple dispute. See: Cambodia Government Seeks UN Intervention Temple Dispute with Thailand [Read more →]

The Cambodia government has engaged the United Nations Security Council to intervene in its dispute with the Thai government over the Preah Vihear temple according to AP.

The dispute is over a recent UNESCO approved application to have the Hindu Preah Vihear temple named a World Heritage Site.

While seemingly inconsequential, the dispute has caused the Cambodia government and the Thai government to deploy more than 4,000 troops to the Cambodia Thai border.

Nonetheless, neither country can afford a military melee in order to settle the dispute considering the Thai and Cambodian economic growth goals at stake. [Read more →]

Vimpelcom, Russia’s second largest cell phone operator has announced it will invest in Cambodia through the purchase of Sotelco according to Reuters UK.

The Cambodian investment deal with Vimplecom and telecommunications and internet service provider Sotelco involves an estimated $28 million purchase yet no other details were released.

Interestingly, the move by Vimpelcom to invest in Cambodia coincides with Vimpelcom similar investment in Vietnam. See Vimpelcom to Invest in Vietnam [Read more →]

Cambodia exports of rubber are expected to expand from 30k tons to 50k tons according to The Hindu News.

The increase in Cambodian exports of rubber comes as new rubber trees planted over five years ago begin to yield.

Rubber currently sells for $3,310 up from $2,800 a year ago. [Read more →]

The National Bank of Cambodia plans to tighten its money supply in a move to fight run away inflation that continues to inflict the Cambodia economy according to the Phnom Penh Post.

The plan is to double reserves to 16 percent from 8 percent which complies with the International Monetary Fund (IMF) recommendation.

Some believe the Cambodian economy is experiencing an inflation rate as high as 30 percent even though the Cambodian government has not released Consumer Price Index (CPI) number since March. See Cambodia Government Opposition Accuses Current Administration of Lying [Read more →]

An opposition party of the current Cambodia government has accused it of being dishonest to the Cambodian people by lying about Cambodia inflation according to ABC Radio Australia.

The criticism of the current Cambodia government comes a month before the country will hold general elections and highlights the fact that the Cambodian government has not published a Consumer Price Index since March.

It is estimated that the Cambodian economy is experiencing 30 percent inflation which is similar to levels that the Vietnam economy is publishing. See Vietnam Inflation Hits 26.8 Percent [Read more →]

The Cambodia has lifted its rice export ban according to Bloomberg.

The Cambodia trade announcement by the Cambodia government added to a further softening of rice prices as rice futures July delivery fell 2.5 percent.

Cambodia is expected to produce [Read more →]

The Cambodia government is going through with plans to build nine hydroelectric dams despite environment concerns according to AFP.

The move will potentially threaten to flood a large portion of Cambodia’s protected forests yet will provide 1,942 megawatts of power by 2019.

A large portion of the Cambodia investment is [Read more →]

Thailand’s largest cement producer, Siam Cement, plans to invest in Cambodia by building a second cement plant according to Bloomberg.

The Cambodia investment move by Siam Cement is worth possibly $189 million and is expected to triple cement production in the country.

Other big commodity investment deals in Cambodia include [Read more →]

Cambodia, Vietnam and Thailand, as well as Myanmar and Laos have agreed to form a rice cartel according to Forbes.

The Cambodia trade move with its neighboring countries would act similar to OPEC but would be called the Organization of Rice Exporting Countries (OREC).

While intentions may be good considering recent runaway rice prices, it will be interesting to see how the World Trade Organization (WTO) reacts to the [Read more →]

The Cambodian government has announced that is plans to become one of the world’s largest rice exporters according to ABC.

The Cambodia government’s plan is to export 8 million tons of rice annually by 2015.

As affordable food continues to become one of the biggest global issues, there is a distinct possibility that the Cambodia trade plan is attainable considering its [Read more →]

The Cambodia government has agreed to sell 6,000 tons of rice to Senegal despite its recent rice export ban according to Xinhua News.

The decision by the Cambodia government to circumvent the Cambodia trade ban is justified by only selling ‘broken’ rice to Senegal.

Any move by the government of Cambodia to lift the ban on Cambodia rice exports is welcome by Cambodia rice farmers as the price of Cambodia rice [Read more →]

Seamico Securities, Thailand’s 7th ranked brokerage firm, plans to invest in Cambodia according to Reuters.

While the details of the Seamico expansion plan were not disclosed, a license to enter Cambodia market is likely to go through later this year.

The key driver for Seamico’s interest to invest in Cambodia surrounds the fact that the Cambodia economy is currently [Read more →]

In addition to sky rocketing rice prices, depleting fish supply is putting pressure on the Cambodia economy according to IPS.

75 percent of the protein consumed in Cambodia is through fish and as supply continues dwindle the Cambodia government is faced with the possibility of introducing stringent fishing controls which may only further the problem for the poorest Cambodians.

While the Cambodia economy continues to grow at rapid pace, any disruption in food supply could cause social unrest and derail Cambodia government plans to further grow the Cambodia economy. [Read more →]