The finance minister is encouraging Korean investors to pursue opportunities in Cambodia offered by five key sectors – green infrastructure, agriculture, tourism, logistics and digital development – with a focus on the precise provisions of a bilateral free trade agreement (FTA) between the two countries that is set to take effect soon.
Minister of Economy and Finance Aun Pornmoniroth, one of the Kingdom’s 10 deputy prime ministers, made the latest appeal on March 29 at his ministry during a meeting with South Korean Minister for Government Policy Coordination Koo Yun-cheol.
The FTA will come into effect 60 days after both countries deposit their instrument of ratification, a document by which a country formally agrees to be bound by a treaty, which should enter into effect no later than June 30, according to Ministry of Commerce spokesman Penn Sovicheat.
In a finance ministry statement issued later on March 29, Pornmoniroth noted that South Korea has committed a line of concessional credit worth about $1.2 billion over 2022-2026 under a new framework arrangement (FA).
The minister expects the priority projects and areas of focus for the FA to be determined at the 4th Korea-Cambodia Integrated ODA Policy Dialogue which is set to be held “soon”.
“In addition to the concessional loans received from the Korean side to develop the necessary infrastructure in Cambodia, Korea should invest more in Cambodia in other important areas, including green infrastructure, agriculture and tourism industry as potential sectors to boost Cambodia’s economic growth.
“Development of the logistics and digital sectors has also become a priority area, which the Royal Government of Cambodia has been focusing on. Therefore, mobilisation of capital investment from the private sector, both domestic and foreign, is an indispensable factor contributing to the socio-economic development of Cambodia,” he was quoted as saying.
Koo vowed to spur on bilateral trade and private sector investment, as well as persuade new Korean players to enter the Cambodian market. He also lauded the results of the Kingdom’s battle against the Covid-19 crisis, specifically the relatively blunted economic impact, according to the statement.
On February 11, South Korean President Moon Jae-in had told Prime Minister Hun Sen that the FTA was being forwarded to Seoul’s parliament for ratification, according to a statement posted on the premier’s official Facebook page. The two leaders spoke at a bilateral meeting between Cambodia and South Korea on the first of the three-day 2022 World Peace Summit in Seoul.
Lauding the new and “more attractive” Cambodian investment law, Moon committed South Korea to continue working with the Kingdom and encouraging more Korean entities to invest in Cambodia. He also commented there were “about 300” Korean companies investing in the Kingdom, according to the statement.
Last year, Cambodia-South Korea trade amounted to $965.364 million, up by 9.041 per cent from $885.322 million in 2020. Cambodian exports were $341.516 million, up by 7.357 per cent year-on-year from $318.112 million, while imports were $623.848 million, up by 9.985 per cent year-on-year from $567.210 million, according to adjusted figures provided by Korea International Trade Association (Kita) on March 30.
According to the finance minister, from 1996 to date, South Korea has provided Cambodia with about $431 million in grant financing.
From 2000 to date, the East Asian country has also given the Kingdom $1.211 billion in concessional loans to finance 26 projects and development programmes, Pornmoniroth said, commenting that South Korea is Cambodia’s “third most important” bilateral development partner, after China and Japan.