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Asked: August 29, 2024In:

How Much Does It Cost to Live in Phnom Penh, Cambodia, in 2024? A Comprehensive Guide. About Phnom Penh Phnom Penh, the capital city of Cambodia, is a dynamic hub that offers a unique blend of tradition and modernity. It ...Read more

How Much Does It Cost to Live in Phnom Penh, Cambodia, in 2024? A Comprehensive Guide.

About Phnom Penh

Phnom Penh, the capital city of Cambodia, is a dynamic hub that offers a unique blend of tradition and modernity. It is increasingly becoming a popular destination for expatriates, digital nomads, and retirees due to its affordable cost of living, cultural richness, and developing infrastructure.

Psar Thom Thmey - Phnom Penh from Top View
Psar Thom Thmey – Phnom Penh from Top View

Phnom Penh, the bustling capital of Cambodia, is a city steeped in history and culture. Founded in the 15th century, Phnom Penh has evolved from a quaint riverside village into a vibrant metropolis. Known as the “Pearl of Asia” in the early 20th century due to its beautiful architecture and strategic location along the Mekong River, Phnom Penh has witnessed significant changes over the decades, from the days of French colonialism to its rapid modern development.

As of 2024, Phnom Penh’s population has grown to over 2.3 million residents, making it the most populous city in Cambodia. Spanning an area of approximately 679 square kilometers, Phnom Penh offers a mix of lifestyles, blending traditional Cambodian customs with a fast-paced, urban lifestyle. The city is a hub of cultural and economic activities, attracting both locals and expatriates who are drawn to its dynamic environment, affordable living, and expanding opportunities.

The lifestyle in Phnom Penh is diverse, offering a range of experiences from bustling local markets and street food vendors to luxurious malls and international cuisine. The city is home to a growing number of expatriates, retirees, and digital nomads who appreciate its affordable cost of living and welcoming atmosphere. Despite its rapid development, Phnom Penh retains a laid-back charm, where one can explore ancient temples and bustling riverside promenades within the same day.

Safety and security in Phnom Penh have seen significant improvements in recent years. While petty crimes such as pickpocketing can occur, especially in crowded areas, overall crime rates are relatively low compared to other major Southeast Asian cities. The local police and private security services are present throughout the city, contributing to a safer environment for both residents and visitors.

Traffic and transportation in Phnom Penh, however, can be challenging. The city’s roads are often congested, especially during peak hours, due to the growing number of vehicles and a lack of comprehensive public transportation. Motorbikes, tuk-tuks, and cars dominate the streets, creating a chaotic but vibrant urban landscape. Recent developments, such as the introduction of a public bus system and ride-hailing apps like Grab and PassApp, have provided more options for getting around the city.

As Phnom Penh continues to grow and modernize, it remains a city of contrasts—where traditional meets modern, and simplicity meets sophistication. Whether you are a potential expat, a digital nomad, or someone simply curious about life in Cambodia’s capital, understanding the cost of living in Phnom Penh in 2024 will help you plan your journey to this fascinating city.

But how much does it cost to live in Phnom Penh in 2024? Let’s break down the various expenses you might encounter if you plan to live in this bustling city.

1. Housing Costs

Housing in Phnom Penh can vary significantly depending on the location, type of accommodation, and the level of luxury you are seeking. Here’s a general breakdown of housing costs:

  • Apartments: A one-bedroom apartment in the city center can cost between $400 to $800 per month. Outside the city center, prices drop to around $250 to $500 per month. For those looking for a bit more space, a three-bedroom apartment in the city center ranges from $800 to $1,500, while outside the city center, it could be between $600 to $1,000.
  • Villas and Houses: For larger families or those looking for more luxurious accommodations, renting a villa or a house can range from $1,500 to $5,000 per month depending on the size, location, and amenities.
  • Utilities: Monthly utility bills, including electricity, water, garbage, and internet, typically range from $100 to $250. Electricity can be the most significant variable, especially if air conditioning is used frequently.

2. Food and Groceries

Phnom Penh offers a wide variety of dining options, from local street food to high-end international cuisine. Here’s what you can expect:

  • Eating Out: A meal at a local Cambodian restaurant can cost as little as $2 to $5, while dining at a mid-range restaurant might cost around $10 to $20 per person. High-end restaurants and international cuisine can cost upwards of $50 per person.
  • Groceries: For those who prefer to cook at home, groceries can be quite affordable. A week’s worth of groceries for one person can range from $25 to $50, depending on dietary preferences. Imported goods are generally more expensive, while local produce, rice, and meats are very affordable.
  • Street Food: If you are a fan of street food, Phnom Penh is a paradise. A street food meal can cost between $1 to $3, making it a popular choice for both locals and expats.

3. Transportation

Transportation in Phnom Penh has seen improvements over the years, with various options available for getting around the city:

  • Public Transport: Phnom Penh recently introduced a public bus system, with fares as low as $0.40 per ride. Although the network is expanding, it is not yet comprehensive.
  • Motorbike Rentals: Renting a motorbike can cost about $50 to $100 per month, depending on the type of bike. This is a popular choice among expats for its convenience and affordability.
  • Tuk-tuks and Ride-Hailing: Tuk-tuks are a common mode of transportation, with fares ranging from $1 to $5 depending on the distance. Ride-hailing apps like Grab and PassApp offer fixed prices and are becoming more popular for their ease of use and reliability.
  • Cars: Owning a car is relatively expensive due to high import taxes. Purchasing a new mid-range car can cost between $25,000 to $40,000. Monthly expenses for fuel, insurance, and maintenance can add another $200 to $500.

4. Healthcare Costs

Healthcare in Phnom Penh has improved significantly, with several international-standard hospitals and clinics now available:

  • Public Healthcare: Public healthcare is available but is often considered of lower quality compared to private facilities. Most expatriates and middle-class locals opt for private healthcare.
  • Private Healthcare: Consultation fees at private clinics range from $30 to $80. Health insurance is strongly recommended and can cost between $500 to $1,500 annually, depending on the coverage.
  • Pharmacy and Medications: Medications are widely available in Phnom Penh, with costs varying depending on whether the drug is imported or locally produced.

5. Education

For those moving with families, education is a significant consideration:

  • International Schools: Tuition fees for international schools can be quite high, ranging from $5,000 to $20,000 per year. Some of the top international schools in Phnom Penh include the International School of Phnom Penh (ISPP) and Northbridge International School Cambodia (NISC).
  • Local Schools: Local schools are significantly cheaper, but the quality and language of instruction may not meet the expectations of some expatriate families.

6. Entertainment and Leisure

Phnom Penh offers a variety of entertainment and leisure activities to suit different tastes:

  • Gyms and Fitness: Gym memberships in Phnom Penh can range from $30 to $100 per month, depending on the facility and services offered. Some gyms offer additional services such as swimming pools, fitness classes, and personal training.
  • Nightlife: Phnom Penh has a vibrant nightlife scene, with bars, clubs, and pubs offering drinks for around $2 to $5. High-end cocktail bars and lounges may charge more.
  • Cultural Activities: Entrance fees to museums and cultural sites are quite affordable, usually ranging from $1 to $10. Cinemas charge around $5 to $8 for a ticket.
  • Sports and Outdoor Activities: Activities like yoga classes, tennis, or renting bicycles are also quite affordable, with prices ranging from $5 to $20 per session or rental.

7. Miscellaneous Expenses

Other expenses that could add up include:

  • Clothing: Shopping for clothes in Phnom Penh can be cheap, especially if you buy from local markets. Branded items and imported goods will cost more.
  • Mobile and Internet: Mobile phone plans are very affordable, with packages costing around $5 to $10 per month for calls and data. Internet plans can range from $15 to $30 per month, depending on speed and provider.
  • Household Goods: Cleaning supplies, personal care products, and other household goods can vary in price, but a monthly budget of $20 to $50 should suffice for most households.

8. Living a Luxury Lifestyle

For those looking to indulge in a more luxurious lifestyle, Phnom Penh has plenty to offer:

  • High-End Dining: Dining at high-end restaurants or enjoying fine dining experiences can cost $50 to $100 per person or more.
  • Spa and Wellness: A visit to a high-end spa for massages, facials, and other treatments can range from $30 to $150, depending on the services chosen.
  • Shopping: Phnom Penh has a growing number of luxury boutiques and malls. Shopping for international brands will naturally be more expensive, with prices comparable to those in Western countries.

9. Cost of Living for Digital Nomads

Phnom Penh is becoming an increasingly popular destination for digital nomads due to its affordability and improving internet infrastructure:

  • Co-Working Spaces: Co-working spaces in Phnom Penh charge between $50 to $200 per month, depending on the location and services provided.
  • Digital Nomad-Friendly Cafes: Many cafes offer free Wi-Fi and a quiet atmosphere, making them great spots for remote work. The average cost of a coffee in such places is around $2 to $4.

10. Cost Comparison with Other Cities in Southeast Asia

To put Phnom Penh’s cost of living into perspective, let’s compare it with other major cities in Southeast Asia:

  • Bangkok, Thailand: While Bangkok is also affordable, the cost of living is generally higher than in Phnom Penh, especially in terms of housing and dining out.
  • Ho Chi Minh City, Vietnam: Ho Chi Minh City is quite comparable to Phnom Penh in terms of cost, although some aspects, like transportation and groceries, might be slightly cheaper in Vietnam.
  • Kuala Lumpur, Malaysia: Kuala Lumpur tends to be more expensive than Phnom Penh, particularly for housing and entertainment, although it offers more developed infrastructure.
  • Manila, Philippines: The cost of living in Manila is generally higher than in Phnom Penh, especially in terms of housing and utilities.

11. Inflation and Future Trends

Inflation rates in Cambodia have been relatively stable, but like any developing country, they are subject to change due to various economic factors. As of 2024, it is expected that inflation will lead to a gradual increase in costs across all sectors, but the overall cost of living in Phnom Penh will remain more affordable compared to many Western countries and major Asian cities.

Conclusion

Living in Phnom Penh, Cambodia, in 2024 offers a unique blend of affordability and quality of life. From affordable housing and diverse dining options to an improving healthcare system and vibrant social scene, Phnom Penh is becoming an attractive option for expatriates, retirees, and digital nomads alike.

However, living costs can vary greatly depending on lifestyle choices and preferences. Whether you choose a more modest lifestyle or opt for luxury, Phnom Penh can accommodate a wide range of budgets.

What do you think about the cost of living in Phnom Penh? Are there any costs you think should be included in this guide? Share your thoughts and experiences in the comments below!

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Angkor Times
Angkor TimesExperienced
Asked: August 29, 2024In:

Why Is Cambodia Investing in Border Infrastructure? Public Encouraged to Support Cambodia’s Border Development Efforts On August 26, 2024, the Prime Minister’s Cabinet in Cambodia announced the launch of the “Foundation for Border Infrastructure Development,” inviting public donations to support this ...Read more

Why Is Cambodia Investing in Border Infrastructure?

Public Encouraged to Support Cambodia’s Border Development Efforts

On August 26, 2024, the Prime Minister’s Cabinet in Cambodia announced the launch of the “Foundation for Border Infrastructure Development,” inviting public donations to support this significant national initiative. Six bank accounts have been established for those who wish to contribute to this important cause, aimed at enhancing infrastructure along Cambodia’s borders.

The Foundation for Border Infrastructure Development initiated by Prime Minister Hun Manet. It’s officially announced on August 26, 2024: Check the detail here

The foundation has been set up with a dual purpose: to raise funds for the construction of much-needed infrastructure in border regions and to provide a meaningful way for Cambodians, both at home and abroad, to participate in national defense and development. This initiative reflects the spirit of Khmer unity and is a call to all citizens to help maintain peace, sovereignty, and territorial integrity while promoting sustainable development in these critical areas.

The Goals of the Foundation for Border Infrastructure Development
The Goals of the Foundation for Border Infrastructure Development

Anyone interested in making a cash contribution can reach out to His Excellency Seng Teang, Deputy Director of the Prime Minister’s Cabinet, through Telegram and CoolApp at 012 961 971. Donations can also be made in person at the Office of the Council of Ministers, Room 206, 2nd floor.

For those preferring to donate via bank transfer, contributions can be made to the “Foundation for Border Infrastructure Development” through the following bank accounts:

  1. Canadia Bank: 1341325012 (KHR), 1341325011 (USD)
  2. FTB Bank: 100020166686 (KHR), 300020166537 (USD)
  3. ABA Bank: 7179 8 7179 (KHR), 7179 9 7179 (USD)
  4. ACLEDA Bank: 0001-05-559998-99 (KHR), 0001-05-559998-88 (USD)
  5. KB PRASAC Bank: 033 190 910 002 (KHR), 033 190 910 001 (USD)
  6. WING Bank: 220820231 (KHR), 220820232 (USD)

This initiative is an opportunity for all Cambodians to contribute directly to the nation’s future, ensuring that border regions are not only secure but also developed and thriving. By supporting the foundation, donors help to build a stronger, more united Cambodia.

Read more: What Are the Key Challenges to Blockchain Adoption in Cambodia?

The recent surge in donations to Cambodia’s “Foundation for Border Infrastructure Development” has captured national attention. Within just 24 hours of its launch, the fund attracted support from over one million citizens, including ordinary people, tycoons, and senior government officials.

Foundation for Border Infrastructure Development
Prime Minister Hun Manet displays a photo gallery of generous people from all walks of life who have donated to the ‘Foundation for Border Infrastructure Development’

But what exactly is the purpose of this initiative? Why is there such a strong push to develop border areas? And what are the potential benefits of this strategy for Cambodia’s future?

Understanding the Purpose of the Foundation

The “Foundation for Border Infrastructure Development” was established to address multiple strategic goals that align with national priorities. At its core, the foundation seeks to:

  1. Safeguard Peace and Sovereignty: The Cambodian government has emphasized the need to protect national sovereignty and maintain peace along its borders. By developing infrastructure in these areas, the government aims to strengthen its control and presence, ensuring that border disputes do not arise or escalate.
  2. Promote Sustainable Development: Border regions in Cambodia often face significant developmental challenges, including poor infrastructure, limited access to services, and economic marginalization. The foundation aims to transform these areas into sustainable communities through targeted investments in infrastructure such as roads, schools, hospitals, and markets.
  3. Enhance National Unity and Patriotism: The initiative also serves as a platform for fostering national unity and patriotism. By encouraging citizens to contribute to the development of border areas, the government is mobilizing a collective effort to support national goals. This effort is seen as a tangible expression of solidarity and national pride.

The Advantages of Developing Border Infrastructure

Investing in border infrastructure is not just about immediate benefits; it is a long-term strategy with several advantages that could reshape Cambodia’s future. Here are some of the key benefits:

1. Improved National Security

Building robust infrastructure in border areas strengthens national security. Roads, communication networks, and facilities enable better surveillance, quicker military deployment if needed, and a stronger presence that can deter illegal activities such as smuggling and unauthorized border crossings. By developing these areas, Cambodia can better protect its territorial integrity and reduce vulnerabilities.

2. Economic Growth and Opportunities

Infrastructure development acts as a catalyst for economic growth. By improving access to border regions, the government can stimulate local economies, create jobs, and attract investments. This can lead to the establishment of new markets, encourage trade, and improve the overall standard of living for residents. Enhanced infrastructure also facilitates agricultural expansion, giving local farmers better access to markets and resources.

3. Social and Community Development

With new infrastructure comes improved access to essential services such as education, healthcare, and clean water. This not only enhances the quality of life for residents but also encourages population growth in these areas. When people have access to good schools and hospitals, they are more likely to settle and build communities. This development is crucial for long-term sustainability and reducing urban-rural disparities.

Read more: Why Is Good Governance Key to Cambodia’s Development?

4. National Unity and Patriotism

The overwhelming support for the fund highlights a deep sense of national unity and patriotism among Cambodians. As Deputy Prime Minister Hun Many noted, contributions to the fund, regardless of size, reflect a collective desire for national prosperity. This initiative serves as a reminder of the strength and resilience of the Cambodian spirit, fostering a sense of pride and belonging among citizens.

5. Enhanced International Relations and Trade

Strategically developed border areas can also improve international relations and trade. By enhancing border infrastructure, Cambodia can better facilitate trade with neighboring countries, reduce bottlenecks at border crossings, and improve diplomatic relations. Well-developed borders are often seen as stable and secure, which can encourage foreign investment and tourism.

A Strategic Move in Response to Public Concerns

The foundation’s establishment is also seen as a strategic response to public concerns over border security and sovereignty. There have been accusations and fears about the loss of land to neighboring countries, particularly Vietnam. By initiating this fund, the government addresses these concerns directly, providing a way for citizens to contribute to national defense and development.

Read more: Why Cambodia’s Greater Control of the Funan Techo Canal Project Is Significant?

As Senate President Hun Sen pointed out, the foundation allows those who are concerned about Cambodia’s borders to actively participate in the nation’s defense efforts. It’s a call to action: “Did you donate money? If you are concerned about losing land, now is a good time to help build roads, schools, hospitals, wells, and other infrastructure in new villages where the government will distribute land allocations to landless individuals.”

Building a Transparent and Inclusive Future

While the initiative has garnered significant support, there are calls for greater transparency in its execution. San Chey, Director of the Affiliated Network for Social Accountability, emphasized the need for the government to disclose the budget requirements and construction plans for the new border infrastructure. A clear and detailed plan would not only encourage more donations but also ensure that funds are used effectively and efficiently.

Transparency is key to maintaining public trust and ensuring the success of the initiative. By openly sharing information about how donations are being used, the government can build confidence and encourage continued support from the public and other stakeholders.

The Role of Citizens in Nation-Building

The response to the foundation underscores the vital role citizens play in nation-building. This initiative shows that Cambodians are willing to come together to support a common cause and contribute to the nation’s development. It is a powerful reminder of the importance of collective action and the impact it can have on shaping the country’s future.

As Pov Sok, personal adviser to the Prime Minister, noted, the strong support from the public and civil servants indicates sincere participation and confidence in the government’s efforts. It demonstrates a collective commitment to national development and a shared vision for a prosperous and secure Cambodia.

How You Can Get Involved

The “Foundation for Border Infrastructure Development” presents an opportunity for all Cambodians to contribute to the country’s future. Whether through donations, volunteering, or simply raising awareness, every action counts. By supporting this initiative, you are not only helping to build infrastructure but also strengthening Cambodia’s sovereignty and unity. You can support here: https://www.facebook.com/permalink.php?story_fbid=826742802986095&id=100069511484329

Share Your Thoughts

What do you think about the government’s new strategy to develop border infrastructure? Do you believe it will bring the intended benefits? How do you see this initiative impacting Cambodia’s future? We invite you to share your thoughts and engage in a meaningful discussion about the development of our nation.

The establishment of the “Foundation for Border Infrastructure Development” marks a significant step in Cambodia’s journey toward a more secure and prosperous future. By investing in border areas, the government is not only addressing immediate security concerns but also laying the groundwork for long-term development and national unity. As the fund continues to grow, so too does the potential for transformative change in Cambodia’s border regions.

Through collective effort and shared commitment, Cambodia can build a brighter future for all its citizens. The foundation is more than just a fund; it is a symbol of national pride and a testament to what can be achieved when a nation comes together with a common purpose.

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Angkor Times
Angkor TimesExperienced
Asked: August 28, 2024In:

Could Easing Angkor’s 1-Day Ticket Requirements Boost Tourism? In an effort to revitalize Cambodia’s tourism industry, the Angkor Institute has announced a significant change in the entry requirements for Angkor Wat, one of the world’s most iconic historical sites. Starting ...Read more

Could Easing Angkor’s 1-Day Ticket Requirements Boost Tourism?

In an effort to revitalize Cambodia’s tourism industry, the Angkor Institute has announced a significant change in the entry requirements for Angkor Wat, one of the world’s most iconic historical sites. Starting at the end of September 2024, the process for purchasing one-day tickets will be simplified: visitors will no longer need to provide detailed personal information, such as photos, nationality, age, and gender. This decision, made by the Board of Directors of Angkor under the chairmanship of Mr. Aun Porn Moniroth, Cambodia’s Deputy Prime Minister and Minister of Economy and Finance, aims to make the experience more convenient for tourists and encourage more visitors to explore the ancient temples.

Could Simplified Angkor Tickets Make Your Trip Easier?
Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance (MEF), presided over the ‘4th Meeting of the Directors Board of the Angkor Enterprise’ in the presence of Sok Soken, Minister of Tourism (MoT), held in Phnom Penh on August, 27. MEF

What Changes Are Being Implemented?

Here are the key updates on the new ticketing system:

  1. Simplified Entry for One-Day Tickets: For tourists purchasing one-day tickets, the need to provide personal information such as photos, nationality, age group, and gender will be removed starting at the end of September 2024. This change is expected to streamline the entry process and reduce waiting times.
  2. Unchanged Requirements for Longer Stays: For those opting for 3-day or 7-day tickets, the requirement to provide a photograph will remain in place until the end of 2024. This measure ensures that security and monitoring are maintained for tourists planning to spend more time exploring the Angkor complex.
  3. Revised Checkpoint System: In an additional move to enhance visitor experience, the number of checkpoints will be reduced. The sophisticated control system will maintain checkpoints only at the temple entrances, eliminating the four existing entry checkpoints. This adjustment is aimed at reducing congestion and making the entry process smoother for tourists.
  4. Technological Advancements for Ticket Sales: The Angkor Institute will also develop a more advanced IT system to facilitate ticket sales. This includes the introduction of self-service machines and a mobile app, which will offer tourists the convenience of electronic payment methods.
  5. New Ticket Formats: To further improve the ease of access, the Institute is exploring the introduction of hand-worn ticket forms, which would streamline the check-in process for visitors.
  6. Future Reforms: A joint working group will be established to review and implement further reforms in the ticketing system. Starting January 1, 2025, there are plans to introduce group temple tickets as a second phase of the reform, potentially offering more flexible options for visitors.

Advantages of the New Strategy

These changes are poised to bring several advantages:

  • Enhanced Convenience: By eliminating the need for personal information for one-day tickets, the Angkor Institute reduces administrative hurdles, making it easier for spontaneous travelers to visit. This can significantly cut down on wait times, enhancing the overall visitor experience.
  • Increased Tourist Numbers: With a simpler entry process, Angkor Wat could attract a larger number of tourists, particularly those who are deterred by lengthy or cumbersome administrative requirements.
  • Boosted Local Economy: More tourists mean more revenue for local businesses, from hotels and restaurants to guides and transportation services, further boosting the Cambodian economy.
  • Embracing Technology: By integrating modern technology, such as self-service machines and a mobile app, the Angkor Institute is modernizing the ticketing process, aligning with global tourism trends toward digitalization and contactless payments.
  • Improved Security and Control: Despite easing some entry requirements, the strategic placement of checkpoints and maintenance of certain controls for longer-stay tickets ensure that the integrity and security of the Angkor complex are upheld.

What Do You Think?

These changes reflect a broader strategy to make Angkor Wat more accessible while maintaining its security and cultural significance. By simplifying the entry process and embracing modern technology, the Angkor Institute aims to attract a larger number of tourists, thereby supporting Cambodia’s tourism sector and economy.

What are your thoughts on these new measures? Do you think easing entry requirements will help boost tourism in Cambodia? Share your opinions in the comments below!

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Angkor Times
Angkor TimesExperienced
Asked: August 28, 2024In:

Young Workforce Will Fuel Cambodia’s Rapid Growth for the Next 20 Years Cambodia stands at the precipice of an economic transformation driven by its demographic advantage: a young and vibrant workforce. With over 60% of its 16 million people under ...Read more

Young Workforce Will Fuel Cambodia’s Rapid Growth for the Next 20 Years

Cambodia stands at the precipice of an economic transformation driven by its demographic advantage: a young and vibrant workforce. With over 60% of its 16 million people under the age of 35, Cambodia’s youthful population is poised to propel the nation into sustained economic growth for the next two decades. This demographic boon, coupled with strategic initiatives in education, training, and industrial development, positions Cambodia as a potential powerhouse in Southeast Asia. This article explores how this young workforce will fuel Cambodia’s rapid growth and why this presents a unique opportunity for the country.

How Can Cambodia’s Young Workforce Drive Economic Growth for the Next 20 Years?
How Can Cambodia’s Young Workforce Drive Economic Growth for the Next 20 Years?

Cambodia’s Demographic Advantage

Cambodia’s demographic structure offers a substantial economic advantage. According to the Mekong Strategic Partners, the nation’s young population is the largest in the region, which can ensure another 20 years or more of rapid economic growth. Unlike its regional counterparts like Vietnam, Thailand, and China, which are experiencing a slowdown in their working-age populations, Cambodia’s young population is set to increase by 24% between 2021 and 2050. This demographic dividend is a significant opportunity for the country to leverage its human resources for sustained economic growth.

The Power of a Young and Active Workforce

Cambodia’s labor force participation rate is around 80%, reflecting a robust engagement of its young population in various sectors. This high participation rate is indicative of an active workforce that is crucial for the country’s economic development. The workforce’s youthfulness allows for adaptability and a greater capacity to learn and innovate, vital traits in a rapidly changing global economy.

Read more: What Is Cambodia’s New Debt Management Strategy?

Furthermore, the literacy rate in Cambodia has been growing rapidly, reaching almost 90% in 2019. This increase in literacy is a positive indicator of the nation’s potential for skilled labor development. Since 2008, employment rates have steadily increased, supported by growth in various industries, demonstrating the capacity of Cambodia’s young workforce to contribute effectively to economic activities.

A Young Workforce as a Magnet for Investors

The abundance of a young labor force makes Cambodia an attractive destination for investors, especially in labor-intensive industries. With a majority of its population under the age of 35, Cambodia offers a dynamic and youthful workforce capable of meeting the demands of manufacturing, construction, and service sectors. As Lim Heng, Vice President of the Cambodia Chamber of Commerce, emphasized, human resources are pivotal for economic growth. He notes that there is guidance from leaders to increase the country’s population to between 20 and 30 million to harness more resources, indicating a strategic focus on leveraging human capital for development.

Challenges and Opportunities in Skills Development

Despite the demographic advantages, Cambodia faces challenges in maximizing its young workforce’s potential. The Asian Development Bank (ADB) reports that only 10.7% of Cambodians are engaged in medium- and higher-level technical occupations, reflecting a skills gap that needs to be addressed. Many industries and service sectors currently rely on foreign experts to fill technical positions, highlighting the need for more comprehensive skills training for the local workforce.

Read more: What’s the Maximum Payment with Bakong Tourists App?

The government has recognized this gap and is taking steps to address it. Prime Minister Hun Manet launched a national vocational training program in November 2023, targeting 1.5 million young people from poor and vulnerable families. This initiative aims to provide at least one life skill to young individuals, thereby equipping them with the necessary tools to thrive in the job market. Such programs are crucial for developing a skilled workforce that can meet the demands of both local and international markets.

Enhancing Productivity Through Education and Training

The current labor productivity in Cambodia, measured at $3.6 per hour, is lower than that of several neighboring countries like Vietnam ($7.3) and Indonesia ($13.1). This productivity gap is largely due to inadequate skills education, which hinders the workforce’s ability to perform at higher levels. Addressing this gap through targeted education and training programs is essential for boosting productivity and, consequently, economic growth.

The government’s focus on skills development is a step in the right direction. By enhancing the skill set of its young workforce, Cambodia can increase its labor productivity and competitiveness in the global market. This not only benefits the economy but also improves the quality of life for workers, leading to a more prosperous society overall.

The Role of Women in Cambodia’s Economic Growth

An essential aspect of leveraging Cambodia’s young workforce is recognizing the role of women in economic growth. Women make up a significant portion of Cambodia’s labor force, particularly in the garment and textile industries. By promoting gender equality and providing equal opportunities for women in education and employment, Cambodia can further enhance its economic potential.

Investing in women’s education and vocational training is crucial for their empowerment and the overall economic development of the country. Women’s participation in the workforce contributes to economic diversity and stability, which are essential for sustained growth.

Preparing for a Changing Economic Landscape

As Cambodia’s young workforce continues to grow, the country must prepare for the inevitable demographic shifts that will occur over the next few decades. By 2050, there will be a billion retirees globally, primarily in China and India, creating a substantial market for tourism, aged care, and retirement services. Cambodia has the potential to tap into this market by developing local, institutional investments that can boost capital markets and lead to significant capital deepening.

The growth of Cambodia’s capital markets will be crucial for supporting long-term economic development. By attracting foreign investment and encouraging local investment, Cambodia can build a more resilient economy capable of withstanding global economic fluctuations.

Cambodia as a Manufacturing Hub

The young workforce also positions Cambodia as an emerging manufacturing hub in Southeast Asia. With the right investments in infrastructure and technology, Cambodia can attract multinational companies looking to relocate their manufacturing bases. The country’s strategic location, coupled with its young and active workforce, makes it an ideal destination for industries such as electronics, automotive, and textiles.

Read more: Why Establish a Special Economic Zone (SEZ) in Bati District, Takeo Province?

Moreover, as global supply chains continue to evolve, Cambodia has the opportunity to integrate itself further into regional and global trade networks. By enhancing its manufacturing capabilities and focusing on higher-value production, Cambodia can move up the value chain and increase its export earnings.

The Need for Strategic Policy Interventions

To fully capitalize on its demographic advantage, Cambodia must implement strategic policy interventions that support workforce development, education, and training. These policies should focus on improving access to quality education, expanding vocational training programs, and promoting entrepreneurship among the youth. Additionally, policies that foster a conducive business environment, encourage foreign investment, and support the growth of small and medium-sized enterprises (SMEs) will be crucial for sustainable economic growth.

Cambodia’s demographic advantage presents a unique opportunity for the country to achieve sustained economic growth over the next 20 years. By investing in its young workforce through education, training, and skills development, Cambodia can enhance its competitiveness and attract more investment. However, this growth will require strategic planning, policy interventions, and a focus on building a resilient economy that can adapt to global changes. As Cambodia continues to develop, it will be essential to harness the potential of its young workforce to drive economic prosperity.

What do you think about Cambodia’s demographic advantage and its potential to fuel economic growth? Share your thoughts in the comments below

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Angkor Times
Angkor TimesExperienced
Asked: August 28, 2024In:

Cambodia Aims to Balance Debt and Development in New Strategy In a bid to ensure sustainable economic growth while managing its financial obligations, the Cambodian government has unveiled a new Public Debt Management Strategy for 2024-2028. This strategic ...Read more

Cambodia Aims to Balance Debt and Development in New Strategy

In a bid to ensure sustainable economic growth while managing its financial obligations, the Cambodian government has unveiled a new Public Debt Management Strategy for 2024-2028. This strategic approach aims to strike a balance between borrowing responsibly and supporting Cambodia’s economic development goals, reflecting a proactive effort to safeguard the nation’s financial future.

What Is Cambodia’s New Debt Management Strategy?
What Is Cambodia’s New Debt Management Strategy?

Context and Motivation for the New Strategy

As of the first quarter of 2024, Cambodia’s total public debt stood at $11.09 billion, with projections indicating that this figure could reach $12 billion by the end of the year. The government’s motivation behind the new debt management strategy is twofold: firstly, to maintain sustainable and responsible borrowing practices; and secondly, to align these practices with the country’s ambitious economic targets of achieving upper-middle-income status by 2030 and high-income status by 2050.

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This strategy is seen as a necessary step given the current global economic uncertainties and Cambodia’s development aspirations. It seeks to address concerns about debt sustainability while ensuring that the country continues to attract the necessary investment to support its growth trajectory.

Key Features of the Public Debt Management Strategy

The Public Debt Management Strategy, published on August 26, 2024, is a comprehensive document outlining all public debt operations, including lending, state guarantees, and debt risk management. Here are some of the strategy’s key features:

  1. Annual Borrowing Limits and Ceilings: The strategy sets an annual borrowing limit between 1.7 billion and 2 billion Special Drawing Rights (SDRs). An SDR is an international reserve asset created by the International Monetary Fund (IMF), valued based on a basket of five major currencies. While Cambodia could potentially increase its borrowing to 2.5 billion SDRs annually, the government has set a cumulative borrowing ceiling of 10 billion SDRs over the five-year period. This cap, translating to about $13.5 billion USD, aims to prevent excessive borrowing and manage the debt burden effectively.
  2. Issuance of State Securities: Cambodia issues between 500 billion and 1 trillion riel ($123 million to $246 million) in state securities annually. Although the figure could rise to 1.2 trillion riel ($295 million) per year, a cumulative ceiling of 4 trillion riel ($984 million) over five years has been established. This measure is designed to ensure that the government’s borrowing from domestic sources remains within sustainable limits.
  3. Cap on Payment Guarantees: To avoid unsustainable financial obligations, the government has capped payment guarantees for new projects at 10 percent of the previous year’s national budget revenue. Furthermore, the state has discontinued direct credit and loan guarantees to the private sector, thereby reducing fiscal risks associated with contingent liabilities.
  4. Maintaining Debt-to-GDP Ratio: The strategy emphasizes keeping the public debt-to-GDP ratio below 55 percent, a threshold that is crucial for maintaining financial stability and investor confidence. With the current foreign public debt relative to GDP below 40 percent, the government aims to keep this ratio low to prevent economic instability.
  5. Debt Composition and Interest Rate Management: At least 90 percent of the public debt inventory is mandated to be composed of fixed-interest rate debt components. This approach minimizes exposure to interest rate fluctuations and helps maintain stable debt servicing costs, providing a buffer against external economic shocks.

Advantages of the New Strategy

The new debt management strategy offers several advantages for Cambodia’s economic development:

  1. Promotes Sustainable Economic Growth: By setting clear borrowing limits and ensuring responsible debt management, the strategy promotes sustainable economic growth. It allows for the financing of critical infrastructure and development projects without jeopardizing fiscal health, aligning with the government’s long-term economic goals.
  2. Enhances Fiscal Stability: With measures in place to cap borrowing and limit exposure to interest rate fluctuations, the strategy enhances fiscal stability. This stability is essential for attracting foreign investment and maintaining confidence in Cambodia’s economic policies.
  3. Reduces Financial Risks: The strategy’s focus on fixed-interest rate debt and discontinuing risky credit guarantees to the private sector helps reduce financial risks. This risk management approach protects the economy from unforeseen financial crises and external economic shocks.
  4. Improves Debt Transparency and Accountability: By clearly outlining borrowing limits, debt composition, and management practices, the strategy improves transparency and accountability in public financial management. This openness is likely to enhance trust among international financial institutions and development partners, potentially leading to better financing terms and more robust economic support.
  5. Supports Development Goals: The strategy aligns with Cambodia’s vision of becoming an upper-middle-income country by 2030 and a high-income country by 2050. By ensuring that debt remains within manageable limits, the government can channel resources into sectors that drive economic growth, such as infrastructure, education, and healthcare.
  6. Encourages Responsible Borrowing Practices: The strategy encourages responsible borrowing by setting clear guidelines on borrowing limits and conditions. This disciplined approach ensures that borrowed funds are used efficiently and effectively, contributing to the country’s development without compromising fiscal health.

Challenges and Considerations

While the new strategy offers numerous advantages, there are also challenges and considerations that need to be addressed to ensure its success:

  1. Global Economic Uncertainty: The global economic landscape remains unpredictable, with potential impacts from geopolitical tensions, fluctuating commodity prices, and changes in international trade policies. These factors could affect Cambodia’s economic performance and its ability to manage debt sustainably.
  2. Need for Robust Institutional Capacity: Effective implementation of the strategy requires strong institutional capacity. This includes a robust legal framework, effective policies, and a reliable information technology system. The government must ensure that these components are in place and functioning effectively to manage public debt responsibly.
  3. Continued Vigilance Required: Despite the relatively low debt-to-GDP ratio, continued vigilance is required to monitor and manage debt levels. This includes regularly assessing debt sustainability, reviewing borrowing practices, and making adjustments as needed to respond to changing economic conditions.
  4. Balancing Development Needs with Debt Sustainability: While the strategy aims to balance development needs with debt sustainability, there is always a risk that unforeseen circumstances could necessitate additional borrowing. The government must remain flexible and adaptable in its approach to managing public debt, ensuring that it can respond effectively to changing circumstances without compromising fiscal health.

Cambodia’s new Public Debt Management Strategy for 2024-2028 represents a forward-looking approach to managing the country’s financial obligations while supporting its development ambitions. By setting clear borrowing limits, capping payment guarantees, and focusing on debt sustainability, the strategy aims to ensure that Cambodia can continue to grow and develop without compromising its financial stability.

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As Cambodia strives to achieve its economic goals, the new strategy provides a roadmap for responsible borrowing and effective debt management. It underscores the importance of balancing debt and development to ensure long-term economic prosperity.

What are your thoughts on Cambodia’s new debt management strategy? Do you think it will successfully balance debt and development? Share your views in the comments below!

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