This is the second part of two articles that attempt to forecast the political, economic and international environment that Cambodia may face in 2025, in a thematic arrangement.

Security concerns caused by neighbouring countries

The political situation in neighboring countries can pose security concerns for Cambodia.

The case of Thailand presents the case in which extreme nationalism can be instigated based on the unsettled border issues.

Thai domestic political actors who provoked violent conflicts between Cambodia and Thailand in the past have recently intensified their activities.

Many Cambodians have noticed that anytime there is a significant internal conflict in Thai politics, there is a noticeable pattern of political complexity spilling over to Cambodia.

Thai politicians often use border disputes and other conflicting issues with neighbors as leverage in their internal political battles.

Eventually, this pattern frequently uses Cambodia as a scapegoat in their power struggle, which leads to anti-Cambodia propaganda.

The case of Vietnam illustrates a growing anti-Cambodia sentiment that is connected to anti-China sentiment.

Vietnam’s domestic situation is also unstable due to several leadership changes and extensive reforms, and trust in Cambodia is eroding because many Vietnamese new generation leaders are less knowledgeable about Cambodia and strongly want to view relations with Cambodia through the prism of China-Vietnam relations. Many Vietnamese leaders view Cambodia as their “little brother.”

Vietnam has been seen attempting to obstruct any development projects linked to China, from the Funan Techo Canal to the modernization of the Ream naval base and even the construction of the Phnom Penh-Bavet expressway.

Such adversarial politics by both Thai and Vietnamese politicians will continue to pose challenges to Cambodia’s domestic politics and national development.

As in any other country, there are hard-line and moderate politicians and academics.

Some try to destabilize relationships, while others try to find stabilizing factors to ensure the sustainability of traditional friendships.

Some warmongering individuals profit politically from sensitive issues such as unresolved borders and ultra-nationalism.

There are concerns about the extent to which the Thai and Vietnamese leaders have the political will and strong intentions to combat such extremist ideas and activities.

Cambodia is fighting hard against these extremists, some of whom live comfortably abroad, posting and spreading fake maps and news about unresolved borders with impunity.

Unfortunately, these political hardliners who want countries to fight each other over unresolved border issues also receive funding, media support, and political support from foreign entities.

These foreign entities are in fact funding and supporting the spread of fake news and destabilization of domestic politics of countries in the region.

The extremist politicians even have human rights organizations behind them. Human rights organizations have never condemned extremist politicians and their daily production of fake news that fosters hatred, misunderstanding, racism, and violence.

What Cambodia can do is identify and build trust with moderate-leaning foreign politicians in neighboring countries and put guardrails against the possibility of violent conflict between countries that would harm the interests of people in the region.

Conducting more robust exchanges of young politicians and researchers is a must to reduce misunderstanding between neighboring countries.

Will Myanmar become the next Ukraine?

The war and security situation in Myanmar are of serious concern to the entire region. Rather than slowing down, the war is escalating.

Violence continues. There are no talks in place.

As the next chair of ASEAN, Malaysia faces an extremely difficult task of ensuring that no country in the Southeast Asian region becomes the next Ukraine, a site of war machines and weapons testing, a site of ideological struggle, or a site of proxy wars, that will have devastating impact on regional peace, stability and development.

Is China taking a break or catching its breath?

The superpower rivalry between the United States and China will obviously intensify. The fight against Russia becomes like a prelude to the final battle with China.

For the West, the fight against the rise of China is a long marathon, sometimes they lose, sometimes they win, but those who last until the end will win.

Currently, the battles between China and the West are on the fronts of trade, technology, supply chain, diplomatic influence and global governance.

On some issues we can see that China is responding very harshly, but on others we can see that it remains silent.

For example, on trade issues, China often retaliates against unilateral restrictive measures from the West. China is working hard to find alternatives for the dominance of dollar.

But technologically, China is moving forward quietly and it seems that it is winning in the race for electric vehicles. China is also quietly developing its semiconductors to support smart devices despite export restrictions from the West and its allies.

So, in the current situation, it is difficult to say whether China is “taking a break” or “catching its breath” amid growing pressure for competition from the West.

If China finds itself in a winning situation, then it can take a break whenever it wants, it does not need to fight back very hard, it can just focuse on its internal development.

If China is catching its breath, it means that it is struggling hard to fight back, its economy is in decline, its consumption is struggling, employment is reduced, and all economic activities and technological progress are de-accelerated.

At the moment, the current situation is still blurred to reach any conclusion.

The article is firstly published on Khmer Times

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How technology can help Cambodian farmers?

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As an agrarian nation, Cambodia has made remarkable progress in the last decade in propelling its agriculture industry with exports now representing 22 percent of the nation’s GDP. Rice and paddy remain among the most significant agricultural exports, with annual production exceeding 11 million tonnes. But there’s more than meets the eye. What’s actually bogging down is the high production costs, limited infrastructure and cutthroat competitiveness in the global market. Trade disruptions have also upset supply chain issues, further challenging farmers who are already grappling with high production costs and fluctuating incomes. This dire situation underscores the need for more stable and diverse export markets to shield farmers from external economic pressures. Is there a way out? According to an avid observer of the Kingdom’s progress, Cambodia can transform itself into an agricultural export powerhouse much like its neighbours with substantial upside in agricultural export value, but for that, the Royal Government should revamp some of its policies

Of Cambodia’s approximate 17 million population, 13 million reside in rural areas where agriculture is the predominant economic activity.

The agricultural sector is critically important, far beyond what the percentage of farmers in the population might suggest contributing about 22 percent of the Kingdom’s gross domestic product (GDP).

Agriculture is a lifeline for food security, supplying over 90 percent of domestic rice needs, and albeit fewer people farm today than decades ago, its role in keeping Cambodia fed, employed and connected to its roots remains vitally important.

Rice, paddy prices

Early this month, the Ministry of Water Resources and Meteorology (MoWRAM) reported that while the official farmland for dry rice cultivation was around 535,000 hectares, actual implementation has expanded to over 900,000 hectares.

According to the Ministry of Agricultural, Forestry and Fisheries (MAFF), rice and paddy remain among Cambodia’s most significant agricultural exports, with annual production exceeding 11 million tonnes in recent years, of which only 10 percent is exported.

Despite its vital role as an economic backbone, supporting downstream industries such as food processing and trade, rice exports face numerous challenges.

High production costs, limited infrastructure and inconsistent quality standards hinder competitiveness in the global market. Additionally, trade barriers and fluctuating international demand further complicate export efforts.

While urbanisation and industrial growth have reduced agriculture’s share of employment and Gross Domestic Product (GDP), enhancing the efficiency and quality of rice exports remains essential to securing its long-term economic impact.

Sidet (30), a farmer in Banteay Meanchey province, shared the challenges he and his fellow farmers face in rice cultivation due to high costs and inconsistent market demand.

Talking to Khmer Times, Sidet said water supply expenses during dry rice cultivation amount to around 40,000 riels (approximately $10) per hectare for the entire four-month cultivation period.

However, because many farmers struggle financially, the payment is typically collected by the village chief only after the harvest season.

Sidet explained that rice prices have been fluctuating, particularly for the OM5154 variety, a type from Vietnam, which has dropped to around six baht or roughly 700 riels per kilogram.

Meanwhile, Cambodian fragrant rice sells for as much as 7.7 baht or approximately 900 riels per kilogram.

He noted that rice and paddy exports to Vietnam and Thailand have recently slowed, partly due to reduced demand and market access challenges. Instead, domestic rice mill factories are buying larger quantities to supply the local market. However, the shift in demand has not significantly improved farmers’ incomes.

Sidet emphasised that despite the importance of rice cultivation, farmers continue to face significant financial burdens.

“They spend between $30-$40 per sack of fertiliser, which is used around three times during each cultivation period, further reducing their profitability,” he said.

These expenses combined with fluctuating rice prices restrict the farmers’ profit margins. As a result, many farmers struggle to make a sustainable income, facing financial strain each season.

Climate & global challenges

On the other hand, cultivation of crops faces distinct challenges during the dry season and harvest season, shaped by the climate, limited infrastructure and reliance on traditional farming methods.

These challenges impact productivity, income and food security, particularly for smallholder farmers who dominate the agricultural sector.

The dry season from November to April is marked by a sharp drop in rainfall, testing farmers’ ability to sustain crops and livestock in the predominantly rain-fed agricultural system where about 80 percent of farmland depends on rainfall rather than irrigation.

Meanwhile, the harvest season coincides with the end of the wet season, when rice and other crops ripen. While it’s a critical time for income; it’s fraught with risks tied to weather, logistics and market dynamics.

In short, during the dry season the focus is on survival keeping crops alive with scarce water while during the harvest season, it’s about securing the yield and income against nature and market forces.

Despite the odds, Cambodia faces additional challenges due to the emerging global trade tension and economic uncertainty. Although farmers could survive the water shortage in the dry season and maintain their income against market forces, they are unlikely to benefit from the trade war.

The trade war especially following the tensions caused by the Trump administration has had a significant impact on Cambodian farmers. As export markets like Vietnam face uncertainty, the cashew farmers struggle with reduced demand and lower prices.

Trade disruptions have also led to supply chain issues, further challenging farmers who are already grappling with high production costs and fluctuating incomes. This situation underscores the need for more stable and diverse export markets to shield farmers from external economic pressures.

Anthony Galliano, Group CEO of Cambodian Investment Management Holdings (CIM) told Khmer Times that the Kingdom has made significant progress in the last decade in propelling its agriculture industry with exports now representing 22 percent of the nation’s GDP.

Galliano said, “While the contribution to the national economy has been critically important in the last three years, given the depressed real estate, construction sector and tourism sectors, growth remains stagnant. In 2022, Cambodia’s total agricultural export volume was approximately 8.6 million tonnes at a value of $4.3 billion in revenue.

In 2023 agricultural export volume rose to 8.82 million tonnes at a total export value of $4.8 billion. While volume increased to 11.66 million tonnes in 2024, marking a 3.21 percent rise compared to 2023, total agricultural export value slightly decreased to $4.792 billion,” he added.

He continued that neighbouring Thailand’s total agricultural export value in 2023 was $49 billion, and was $52 billion in 2024. Vietnam total agricultural export value in 2023 was $53 billion and was $62 billion in 2024, exponentially higher than Cambodia. Fresh, frozen and dried fruits and rice dominate Thailand’s agricultural exports followed by rubber, processed chicken and pet foods.

Vietnam’s main exports are fruits, vegetables, rice, cashew and presently Vietnam is now the second-largest coffee exporter, boasting an export value of $5.48 billion in 2024. Its main markets are China, US and EU.

Galliano pointed out that Cambodia can also transform itself into an agricultural export powerhouse and be as successful as its neighbours with substantial upside in agricultural export value. The country has an arable land area of approximately 4,110,000 hectares compared to Vietnam’s approximate 6,697,000 hectares.

While Vietnam has 61percent more arable land it has 13 times more agricultural export value and has a 100 million population to feed versus Cambodia’s 17 million. The upside for the Kingdom is enormous and the Royal Government is driving the opportunity by implementing several key agricultural policies to modernise and enhance the sector’s productivity, sustainability and resilience.

“Notably the National Agricultural Development Policy (NADP) 2022-2023, the Agricultural Extension Policy and the Pentagonal Strategy. The Kingdom is making strides in improving agricultural productivity and value-added processing, expanding market access and trade agreements and improving logistics and infrastructure,” he said.

The CIM CEO said that Cambodia can capitalise on the high quality and desirability of its premium and organic rice, cassava, cashew, fruits, rubber products, unique spices and the high potential of developing a coffee industry.

With the government focus and policies and the improvements achieved, the agricultural sector is now more than ever a critical part of the national economy and one of its greatest future opportunities with exponential growth potential, he added.

Rise and fall of cashew

The ‘Cashew Emperor’ initiative launched by former Prime Minister Hun Sen is vital for national economic growth as it aims to position the country as a global leader in cashew nut production.

The initiative seeks to boost farmers’ income and foster sustainable growth in the cashew sector by improving agricultural practices and processing capabilities as well as expanding export markets.

However, the initiative is currently facing challenges due to slow demand from key export markets, especially Vietnam. This decline in demand is partly linked to the trade war triggered by the Trump administration earlier this year which caused each country to focus on maximising its local productivity outputs.

As a result, prices for raw cashew nuts have dropped significantly affecting farmers’ profits. Many farmers are already struggling with high production costs and low incomes and the drop in prices has made it even more difficult for them to make a living.

To address these issues, there is a pressing need to diversify export markets and strengthen the value chain. These efforts are essential for stabilising the cashew industry and ensuring its long-term viability.

Speaking to Khmer Times, Uon Silot, President of the Cashew Nut Association in Cambodia (CAC), explained that March marks the peak harvesting season for cashew nuts a period that typically sees a decline in market prices. However, CAC is actively collaborating with partner companies to mobilise financial support aimed at stabilising prices during this crucial time.

“This year, the price has dropped from 6,000 riels to 4,400 riels per kilogram, which is approximately $1. Nevertheless, thanks to our collaboration with partners, we successfully pushed the price back up to 5,500 riels within just three days,” Silot noted.

He highlighted the lessons learned from the previous year, stating, “In 2024, prices plummeted to 3,200 riels per kilogram and remained at that low for nearly three weeks before we managed to restore them to 5,000 riels.

From that experience, we have refined our approach and can now resolve price issues much faster. Additionally, cashew nut production remains relatively small compared to rice and cassava, making it easier to manage.”

The CAC President emphasised that a fair price for raw cashew nuts stands at around 5,000 riels per kilogram, a rate considered acceptable for both farmers and processing factories. He cautioned, however, that if prices rise too high, only farmers benefit, as processing factories would struggle to maintain profitability.

Silot detailed several strategies aimed at effectively maintaining stable prices. “We must curb the outflow of cashew nuts from Kampong Thom, the largest cashew-producing province in Cambodia, with approximately 150,000 hectares yielding around 220,000 tonnes annually. This accounts for nearly 30 percent of the nation’s total productivity.”

He stressed that preventing the cashew nuts from Kampong Thom from being sold to other provinces helps elevate prices in those areas due to the limited supply. To effectively manage this, CAC has been working closely with four major processing factories in Kampong Thom, holding three significant meetings over the past year.

“Our discussions have focused on ensuring that prices never fall below 4,500 riels (about $1.1) per kilogram. We have established this threshold as the red mark which should not be crossed under any circumstances,” Silot explained.

He elaborated on the cost structure, indicating that when factoring in overall expenses such as fertilisers, farming supplies and irrigation, the baseline cost amounts to approximately 3,800 riels per kilogram.

Additionally, labour costs around 700 riels per kilogram for workers who gather the cashew seeds. As a result, CAC determined that 4,500 riels per kilogram is the lowest acceptable price that can still offer a fair profit to farmers.

Silot continued by noting that during the harvest season, buyers naturally seek the lowest prices. By limiting the flow of cashew nuts from Kampong Thom and Preah Vihear provinces, supply is reduced in the marketplace, thereby driving prices upward.

CAC’s efforts to maintain stable prices have proven successful over the past two years, according to Silot. He also acknowledged the financial backing from the Agricultural and Rural Development Bank (ARDB) and various microfinance institutions that work closely with CAC to support price stabilisation initiatives.

However, in cases where financial support is not forthcoming, CAC employs an alternative strategy that involves working with local farmers who possess large storage facilities and have the capacity to hold their cashew nuts for extended periods.

“This unified approach allows ordinary farmers to sell their products at favourable prices during the early stages of the harvest season. Once their supplies are exhausted, other farmers with storage capabilities can release their products to the market at higher prices,” he stated.

Silot further explained that farmers with larger storage facilities also benefit from the ability to dry their cashew nuts more effectively. Drier cashews command a higher market price compared to wet ones, enhancing overall profitability.

This strategy relies heavily on trust between CAC and local farmers. If CAC fails to secure buyers as promised, farmers will release their products simultaneously, triggering a sharp decline in prices. Such challenges were experienced last year, resulting in a price reduction of approximately 30 percent.

Despite these obstacles, Silot remains optimistic about the current strategies being employed to stabilise prices noting that the collaborative approach involving farmers, factories and financial institutions offers a resilient framework for the cashew nut industry’s growth and sustainability.

Firstly published on Khmer Times

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As of the end of 2025, Cambodia has 3,083 large factories in operation. This marks a significant increase of 658 factories compared to 2024, representing growth of 27.13 percent, according to the Ministry of Industry, Science, Technology and Innovation. In simple terms, the Kingdom saw nearly 30 percent more large factories in just one year, a clear signal of accelerating industrial expansion.

This growth came despite 42 large factories closing during the year, compared to 26 closures in 2024. The net increase underscores the resilience and momentum of Cambodia’s manufacturing sector, even amid global uncertainty and regional pressures.

Where Are These Factories Located?

The distribution of factories highlights Cambodia’s key industrial hubs. Phnom Penh leads with 895 factories, followed by Kampong Speu with 603, Kandal with 403, Svay Rieng with 327, Preah Sihanouk with 305 and Takeo with 231. These provinces and the capital collectively form the backbone of Cambodia’s industrial ecosystem, supported by special economic zones, logistics connectivity and access to ports and borders.

The presence of large factories inside zones such as the Royal Group Phnom Penh Special Economic Zone reflects a broader strategy to cluster manufacturing operations in well serviced industrial parks that offer streamlined customs procedures and investor friendly infrastructure.

What Do These Factories Produce?

While garment manufacturing remains dominant, Cambodia’s industrial base is no longer limited to light industry. Factories are increasingly engaged in leather processing, paper and paper products, food processing, electrical equipment, rubber and plastic products, furniture, non metallic mineral products and timber goods.

This diversification indicates gradual movement up the value chain. The country is building stronger domestic production chains and integrating more deeply into regional and global supply chains, in line with national economic strategies.

How Many People Do They Employ?

By the end of 2025, factories across Cambodia employed approximately 1.27 million workers. This represents a 9.38 percent increase compared to 2024. The manufacturing sector remains one of the largest sources of formal employment in the country, supporting household incomes and domestic consumption while strengthening social stability.

Why Is the Number Growing So Fast?

Several structural factors explain this rapid expansion. According to economist Hong Vanak of the Royal Academy of Cambodia, reforms to investment laws, improved labour productivity and access to broad export markets have been critical drivers.

Cambodia has also benefited from bilateral and multilateral free trade agreements, competitive labour costs and a young workforce. Government reforms under its seventh mandate have focused on improving the business environment, strengthening competitiveness and promoting higher value added manufacturing.

The industrial sector grew by around 9.3 percent in 2025 and is projected to expand by 7.2 percent in 2026, despite challenges including border tensions with a neighbouring country. The sector has been identified as a strategic pillar under phase one of the Pentagonal Strategy, positioning industry, science, technology and innovation as key engines of long term growth.

What This Means for Investors and Business Leaders?

For investors, executives and policymakers, the figure of 3,083 large factories is more than a statistic. It reflects increasing investor confidence, deeper integration into global supply chains and expanding export capacity. Cambodia is evolving from a predominantly garment based manufacturing economy toward a more diversified industrial landscape.

The continued growth in factory numbers strengthens Cambodia’s export potential and enhances economic resilience. As production capacity scales and industrial capabilities broaden, the Kingdom is positioning itself as a more competitive manufacturing destination in Southeast Asia.

In 2025, the answer is clear. Cambodia is home to over 3,000 large factories and the trajectory remains upward.

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