PHNOM PENH, July 6 (Xinhua) -- The Regional Comprehensive Economic Partnership (RCEP) free trade pact and the bilateral free trade agreements (FTAs) will play a crucial role in attracting more foreign direct investments to Cambodia, Cambodia's central bank said in a report released on Thursday.
In addition to the RCEP, the world's largest free trade deal engaged with 15 Asia-Pacific countries, Cambodia has bilateral FTAs with China, South Korea and the United Arab Emirates.
"On the back of the implementation of the RCEP agreement and the bilateral FTAs, the kingdom is expected to attract more investments in the coming years that will boost productivity and promote economic diversification," said a National Bank of Cambodia's financial stability report.
Cambodia attracted the fixed asset investment of 4.68 billion U.S. dollars in 2022, a year-on-year increase of 7.5 percent from 4.35 billion dollars.
The report said Cambodia's economy is projected to grow by 5.6 percent in 2023, up from 5.2 percent in 2022, driven by exports of garment and non-garment manufacturing products, fast recovery in tourism, strong growth in transport and communication, and agriculture.
It added that a further slowdown in global economic activities, particularly in the United States and Europe, could affect the prospects of Cambodian exports and capital inflows.
Cambodian Ministry of Commerce's undersecretary of state Penn Sovicheat said the RCEP agreement and FTAs will help Cambodia graduate from its least developed country status by 2027 and achieve its goals of becoming an upper-middle income country in 2030 and a high-income nation by 2050.
"The RCEP, together with bilateral FTAs, has not only given a boost to the kingdom's sustainable trade growth, but also become a magnet to attract more foreign direct investments," he told Xinhua.
The RCEP comprises 15 Asia-Pacific countries including the 10 ASEAN (the Association of Southeast Asian Nations) member states of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and their five trading partners, namely China, Japan, South Korea, Australia and New Zealand.
Cambodian government's senior advisor Sok Siphana said RCEP is an agreement of great importance that has the potential to shape the future of trade in the region, unlocking opportunities for growth and development.
"Cambodia's strategic geographic location, coupled with its young and dynamic workforce, positions it as an attractive investment destination within the RCEP framework," he said in a recent RCEP forum in Phnom Penh.
"With its competitive manufacturing base and the preferential trade terms offered by RCEP, Cambodia is well-positioned to attract investments and expand its export market reach," Siphana said.
Joseph Matthews, a senior professor at the BELTEI International University in Phnom Penh, said the RCEP and other bilateral FTAs will allow Cambodia to export goods to large markets, with tariff concessions.
"These trade deals, along with Cambodia's favorable investment law, are key to attract foreign direct investments to Cambodia in the post-COVID-19 pandemic era," he told Xinhua. ■
