By The Nation
Published on February 13, 2009
Business leaders from both within Cambodia and overseas are due to meet in Siem Reap today to discuss the business and investment prospects of the country and the region.
In cooperation with the government of Cambodia, The Economist Conferences' "Business Roundtable" will feature a keynote address by Prime Minister Hun Sen.
The next 10 years will be more challenging for Cambodia than the past decade, and economic growth is unlikely to be as strong. Nonetheless, with the right policies, the country presents exciting opportunities for foreign investors, say the organisers, the Economist Intelligence Unit (EIU).
As a prelude to the roundtable, Charles Goddard, editorial director of the EIU and co-chair, said: "Cambodia has enjoyed a decade of blistering growth, more than doubling its per capita gross domestic product between 1998 and 2007.
"Much of this performance came about thanks to the introduction of greater political stability, a deepening integration into the global trade and investment community, and improved macroeconomic management. However, the outlook for 2009 and beyond looks far less promising. With the world in the midst of a deepening recession, Cambodia's economy will not escape unscathed."
The EIU is now forecasting that GDP growth will slow from 5 per cent in 2008 to around 1 per cent this year. Demand for Cambodia's exports, especially garments, will be hit by the downturn. Tourism, a major source of growth in recent years, will suffer too, as consumers elsewhere in the world cut back on travel and holidays. And the construction and real estate sectors will be hurt by tightening credit conditions and the pull-back of foreign investors.
Indeed, the EIU is forecasting that foreign direct investment into Cambodia in 2009 will fall sharply, after rising steadily over the past four years.
Justin Wood, director, Corporate Network, and Southeast Asia expert at the EIU, as well as co-chair of the roundtable, said: "Trying to navigate this less favourable environment will throw up serious challenges for the government in the short term, not least how it should adjust fiscal policy to keep the economy growing.
"The medium- and long-term challenges are just as great. Having relied heavily on four sectors of the economy - agriculture, garments, construction and tourism - to drive recent growth, the government needs to help the economy to diversify.
"Equally, the financial system needs to be strengthened, investment into areas like infrastructure needs to be raised, the monetary and macroeconomic framework needs to be upgraded, and the management of the country's resources needs to be improved - especially its human capital through education."
Wood concluded on a more positive note however, commenting that "The next 10 years will be more challenging for Cambodia than the past 10, and economic growth is unlikely to be as strong. Nonetheless, with the right policies, the country does present exciting opportunities for foreign investors."
The roundtable, taking place at the Angkor Palace Resort and Spa, is sponsored by Acleda Bank and Sciaroni & Associates (lead sponsors), and Jardine Matheson and TFC Capital (supporting sponsors). River Orchid is the supporting PR agency.
Published on February 13, 2009
Business leaders from both within Cambodia and overseas are due to meet in Siem Reap today to discuss the business and investment prospects of the country and the region.
In cooperation with the government of Cambodia, The Economist Conferences' "Business Roundtable" will feature a keynote address by Prime Minister Hun Sen.
The next 10 years will be more challenging for Cambodia than the past decade, and economic growth is unlikely to be as strong. Nonetheless, with the right policies, the country presents exciting opportunities for foreign investors, say the organisers, the Economist Intelligence Unit (EIU).
As a prelude to the roundtable, Charles Goddard, editorial director of the EIU and co-chair, said: "Cambodia has enjoyed a decade of blistering growth, more than doubling its per capita gross domestic product between 1998 and 2007.
"Much of this performance came about thanks to the introduction of greater political stability, a deepening integration into the global trade and investment community, and improved macroeconomic management. However, the outlook for 2009 and beyond looks far less promising. With the world in the midst of a deepening recession, Cambodia's economy will not escape unscathed."
The EIU is now forecasting that GDP growth will slow from 5 per cent in 2008 to around 1 per cent this year. Demand for Cambodia's exports, especially garments, will be hit by the downturn. Tourism, a major source of growth in recent years, will suffer too, as consumers elsewhere in the world cut back on travel and holidays. And the construction and real estate sectors will be hurt by tightening credit conditions and the pull-back of foreign investors.
Indeed, the EIU is forecasting that foreign direct investment into Cambodia in 2009 will fall sharply, after rising steadily over the past four years.
Justin Wood, director, Corporate Network, and Southeast Asia expert at the EIU, as well as co-chair of the roundtable, said: "Trying to navigate this less favourable environment will throw up serious challenges for the government in the short term, not least how it should adjust fiscal policy to keep the economy growing.
"The medium- and long-term challenges are just as great. Having relied heavily on four sectors of the economy - agriculture, garments, construction and tourism - to drive recent growth, the government needs to help the economy to diversify.
"Equally, the financial system needs to be strengthened, investment into areas like infrastructure needs to be raised, the monetary and macroeconomic framework needs to be upgraded, and the management of the country's resources needs to be improved - especially its human capital through education."
Wood concluded on a more positive note however, commenting that "The next 10 years will be more challenging for Cambodia than the past 10, and economic growth is unlikely to be as strong. Nonetheless, with the right policies, the country does present exciting opportunities for foreign investors."
The roundtable, taking place at the Angkor Palace Resort and Spa, is sponsored by Acleda Bank and Sciaroni & Associates (lead sponsors), and Jardine Matheson and TFC Capital (supporting sponsors). River Orchid is the supporting PR agency.
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