Local policymakers are driving Cambodia’s regional geography, young population and low labour costs to attract more foreign direct investment (FDI) as the Kingdom releases its new five-year development plan for the garment industry.
The Ministry of Economy and Finance (MEF) has been preparing the five-year development plan (2020-2025) for the garment and textile industry that will provide an important roadmap to set
out a vision to transform the sector into a high-value, supportive and diversified industry.
According to the draft, the strategy will continue to improve working conditions and the welfare of workers, while also promoting direct domestic and international investment and attract investment in industries that support the sector and promote export market diversification.
The country needs to take this chance to attract more investment and diversify its production chains with new investment laws, which are expected to be completed
this year, according to Phan Phalla, the Ministry of Economy and Finance’s secretary of state. Phalla said the Kingdom’s new laws will provide a smart incentive to new industries because Cambodia needs to improve competition and eliminate trade barriers.
Ngoun Meng Tech, director-general of the Cambodia Chamber of Commerce (CCC) said that so far the CCC has not seen the new draft law
on investment. However, in general, he said having a good investment law will attract more investments to the country and will create more job opportunities for local people and support economic growth.
“The MEF is preparing strategies to attract more investors and we hope that what we are doing such as free-trade agreements with China will provide us with more investors,” he said.
Referring to the partial loss of the EU’s trade preferential Everything but Arms trading scheme, Meng Tech said the Kingdom’s new investment law will help to mitigate future risk.
He said the government’s new online business registration platform is another measure to ease doing business in Cambodia that will reduce processing time and costs for new business owners.
Cambodia is home to the largest youth and adolescent population in the South East Asia region, which is attractive for innovation and technology investors because two-thirds of the population is currently under the age
Pech Pisey, executive director of Transparency International Cambodia said to attract investors, the government should reform and prioritise sectors creating and enabling an environment for businesses to thrive. “Fair business competition by applying equal legal framework compliance as well as providing incentives for companies that are best performed legal compliance and curbing public sector from corruption and reducing the cost of doing business is what we need,” he said.