A post-pandemic Cambodia looks set to shine brightly

While the Delta variant of Covid-19 overwhelms most of Southeast Asia in July, Cambodia has reasons to stay optimistic

Cambodia has invested more than $1 billion to combat COVID-19 and might attain herd immunity by early 2022.

The tourism centers of Sihanoukville and Siem Reap are projected to develop into flourishing metropolises following the epidemic.

Cambodia has bright growth potential as a result of Southeast Asia’s economic expansion, growing commerce with China, and a youthful and energetic population with rising educational levels.

Covid-19 has reappeared in full force in Southeast Asia halfway through the year. The delta variant, a coronavirus variation named the “fastest and fittest” by the World Health Organization (WHO), is wreaking havoc on the region. For the time being, Indonesia has become the pandemic’s epicenter.

At the moment though, Cambodia is doing better than most of its neighbors.

Robust government actions

According to Cambodia’s Ministry of Health, more than 5.4 million Cambodians have been vaccinated (getting at least one dose of one of the Covid-19 vaccines), accounting for 54% of the eligible population. The number of Cambodians who are completely vaccinated is likewise steadily growing. Cambodian Prime Minister Hun Sen has stated that children aged 12 to 17 will be the next to get vaccinations.

It is possible that schools may reopen in full in September. Cambodia might achieve herd resilience — defined as 65 percent of the population over the age of 12 being completely vaccinated — as early as next year.

The Cambodian government is also attempting to acquire more vaccinations so that it can offer a third “booster” dosage to those who are immunized.

Cambodia is currently seeing a frightening rise, and leaders are correctly appealing for calm and attempting to soothe fragile nerves. The growing number of cases and deaths may be attributable to comorbidity (pre-existing illnesses that have deteriorated), and the numbers may therefore decline more swiftly in Cambodia than elsewhere in the area.

However, the poor will bear the brunt of the consequences.

Fortunately, the Cambodian government has demonstrated a great desire to assist them and has spent a significant amount, especially for a lower-income country, to sustain an economy primarily consisting of garment and informal workers (tuk tuk drivers, eatery owners, small shops etc). According to the Asian Development Bank, Cambodia spent $1.36 billion to battle Covid-19, which equates to roughly 5.1 percent of the country’s total GDP.

The Covid-19 Cash Transfer Programme (CCTP) was funded, as were money given to purchase Sinopharm, Sinovac, and AstraZeneca vaccines, as well as required investment to enhance healthcare infrastructure such as testing facilities, labor cost sharing, tax deferral, credit availability, and more.

This year, the government is likely to spend much more.

While it is true that the number of Cambodians living in poverty has grown as a result of the pandemic’s impact on companies and a drop in demand for garment exports (a crucial lynchpin of the Cambodian economy), it is evident that things could have been far worse. According to the National Social Protection Council, almost 2.7 million individuals have benefitted from the CCTP, the anti-poverty effort, accounting for 14 percent of the population.

In contrast to other nations in the area, such as the Philippines and Indonesia, which enforced partial lockdowns to make life easier for the impoverished, the Cambodian government imposed strict lockdowns. As a result, economic activity has restarted much more rapidly following an initial jolt.

Moving away from tourism

Meanwhile, the epidemic has hastened efforts to diversify the economic foundations of Sihanoukville, a deep-water port, and Siem Reap, the location of the world-famous Buddhist temple complex known as Angkor Wat.

According to Hello Angkor, a Cambodian knowledge portal, a number of real estate development projects are underway in Siem Reap, including the construction of a new international airport, 20 major projects as part of the Siem Reap Tourism Development Master Plan, and a slew of tourism and hospitality developments launched by private companies and backed by investors from the United States, Japan, and China. When the epidemic is over, the area expects to welcome more than 7.5 million foreign tourists each year (Cambodia only received 6.6 million in 2019) and is making measures to do so.

Slowly, Siem Reap is also becoming a popular location for start-ups, as many want to establish themselves outside of Phnom Penh.

Meanwhile, Sihanoukville is attempting to move past an earlier time in which casino-based real estate development was prevalent. It irritated one travel agent to the point where he wrote a blistering indictment of ‘overtourism.’

Sihanoukville, on the other hand, is anticipated to develop and become recognized for more than its tourism attractions. Given its location as Cambodia’s sole deep-water port, it aspires to become an industrial city similar to Shenzhen, complete with special economic zones and the development of export-led manufacturing activity.

Not only will this improve the Sihanoukville airport, but the subsequent infusion of cash should result in better developments.

For example, Ream City, a city-within-a-city project developed on reclaimed ground near the airport, will be one of Cambodia’s first significant sustainable development projects, drawing on decades of Asian development expertise, most notably the famous Suzhou Industrial Park. The project, a brainchild of Canopy Sands Development, a member of the Prince Holding Group of businesses, is projected to attract $16 billion in investment and construction on the first phase has already begun. The project will adhere to sustainable design concepts such as environmental protection, resource recycling, environmentally friendly cars, and infrastructure development.

As one of the more disaster prone countries, with seasonal floods and droughts, there is a clear need for sustainable development – industrial and commercial development in Sihanoukville is expected to accelerate urban migration, and young Cambodians, who account for more than two-thirds of the population, will require such sustainable property.

Meanwhile, the Sihanoukville Special Economic Zone processed $1 billion in imports and exports in the first half of the year, a roughly 50 percent increase over the same period previous year. More than simply a dead cat bounce, growing commerce between China and Southeast Asia – the two experienced a rise in merchandise trade flows despite a drop elsewhere – implies Cambodia may profit significantly as Chinese firms try to re-shore some of their activities in Southeast Asia.

Prince Holding Group, more commonly known as Prince Group Cambodia, led by naturalized Cambodian Neak Oknha Chen Zhi, is one of several businesses taking advantage of the chance. Despite not being a publicly traded business, Chen Zhi Prince Group has invested more than $2 billion in projects over the last decade and adheres to an environment, social, and governance (ESG) strategy. Unlike in previous times of Cambodian history, intelligent corporate engagement is shaping the country’s destiny.

Despite the delta wave, the signing of the Regional Comprehensive Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership might result in an increase in yearly commerce of $19 billion by 2030, according to the Brookings Institution.

Developing human capital

Finally, if Cambodians do not upskill themselves as they prepare for a future defined by the industry 4.0 revolution, none of these initiatives will be of much use to the country. To avoid a spike in school delinquency, Cambodia will need to witness an increase in university enrollment and a speedy return to school for at least two-fifths of employees globally.

According to the 2019-2023 Education Strategic Plan, the Ministry of Youth, Education, and Sports expects that 16 percent of all eligible students enroll and complete university by 2023, with roughly a third pursuing science, technology, engineering, and medicine courses.

It is envisaged that in the future, Cambodia would witness an increase in the number of graduates with appropriate skills who will be able to engage in a diverse economy, extending the pre-pandemic economic boom that has lifted millions out of poverty.

Cambodia’s future is still bright following Covid

Of course, problems remain, and a bright future for Cambodia cannot obscure the truth that reconstructing Cambodia will be a challenging task. No country should be subjected to the epidemic for any longer than necessary, and every life lost as a result of Covid-19 is a tragedy.

The epidemic reminds us that no one is secure until everyone is safe – a statement reiterated frequently by WHO, UNICEF, the UN Secretary General, and numerous other persons and organizations – and hence the focus must stay firmly on properly controlling and battling the coronavirus.

Provided citizens in Cambodia are seeking reasons to be optimistic in the middle of a dismal era, there are genuine reasons to do so if they take a long-term view.

All of these predictions will become clearer next year, when Cambodia assumes the post of Asean chair for the third time in its brief existence as an independent nation.

Hopefully, Cambodia will be recognized for more than its dark and troubled past in the not-too-distant future.