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26 Jul 2013

International Economy

[AEC Plus] Cambodia’s Elections: New Government to Continue Investment & Export Promotion Policy (Current Issue No. 2388 Full Ed.)

The national general elections in Cambodia scheduled for July 28 will be hotly contested largely by three major political parties, including the Cambodia People's Party (CPP), led by the current Premier Samdech Hun Sen, the Cambodia National Rescue Party (CNRP, led by Sam Rainsy and the FUNCINPEC Party, led by Princess Norodom Arun Rasmey. Any party wining at least 62 seats out of the total 123 seats in the National Assembly will be legitimate to form a government. The current Cambodian administration, under Prime Minister Samdech Hun Sin, has placed importance on the open-door policy, wherein various investment regulations have been improved to attract international companies to invest in Cambodia. This policy has been successful in attracting substantial amount of foreign direct investment and supporting the export sector of Cambodia. If the election results do not lead to the change in setting up the government, it is expected that Cambodia will likely continue to promote foreign investment as this policy is imperative for industrial and infrastructure developments, which in turn, helps enhance the country's competitiveness over the long-term. We at KResearch expect that Cambodia will continue to perform well economically with the GPD growth reaching about 7-7.5 percent over the next three years.
Meanwhile, there is ample room for Thailand to expand trade and investment with Cambodia ahead. In trade, Thailand is currently the largest import source for Cambodia, accounting for 28.4 percent of their total imports. Amid thriving Thailand-Cambodia border trade, it is expected that Thai cross-border exports to Cambodia in 2013 will grow perhaps 15 percent to at least THB86 billion. Major exports include electric motors, machinery, cars, motorcycles, refined sugar and various consumer products. In investment, Thailand may use Cambodia as an export base for numerous products that are eligible for investment incentives. Bright investment prospects are seen in the agricultural, agro-processing, garment and tourism industries, thanks to Cambodia's abundant resources and relatively cheap, yet skilled workers.

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International Economy