Why Does Cambodia Indonesia Trade Still Have Room to Grow?
The 11th episode of Cambodia’s Economic Growth Policy Dialogue took a close look at “Trade and Economic Relations with the Republic of Indonesia,” bringing together senior diplomats and business leaders to evaluate where the partnership stands and where it could go next. The session was hosted by H.E. Prof. Bundit Sapheacha Dr. Sok Siphana, Senior Minister in charge of Special Missions and Chairman of the Trade Policy Advisory Board, alongside H.E. Santo Darmosumarto, Ambassador Extraordinary and Plenipotentiary of the Republic of Indonesia to the Kingdom of Cambodia, and H.E. Dalton Wong, President of the Indonesia Chamber of Commerce in Cambodia. While diplomatic relations between the two countries have now spanned 66 years and remain strong, the conversation made it clear that trade performance has yet to reach its full potential. Bilateral trade has stayed at just over one billion dollars in recent years, but a slight dip in the first half of 2025, largely due to lower Cambodian exports, has raised concerns. Much of the trade still centers on commodities rather than deeper investment collaboration. Business leaders suggested that future growth depends on moving beyond traditional buying and selling toward joint ventures and co investment strategies that mirror Indonesia’s partnerships elsewhere in the region. Cambodia’s rice sector was highlighted as a policy success story, with exports rising from about 15,000 tons in 2010 to between 700,000 and 800,000 tons annually today, showing how targeted reforms and private sector engagement can transform an industry. Participants also pointed to agro industrial development, including cashew processing and rice based products, as areas where Indonesia’s technical expertise could help Cambodia climb the value chain.
How Can ASEAN Markets Unlock Greater Opportunity?
The discussion also placed Cambodia Indonesia trade within the broader ASEAN framework. Intra ASEAN trade currently accounts for around 20 percent of the bloc’s total trade, a figure many see as modest given the region’s economic size and integration goals. Sok Siphana described intra ASEAN trade as a “low hanging fruit” that remains underutilised, urging businesses to make better use of existing trade facilitation agreements. While ASEAN countries often produce similar goods, new complementarities are emerging as economies diversify. Indonesia is expanding into electric vehicle industries and related supply chains, strengthening its industrial base. The Ambassador underscored Indonesia’s global engagement through its participation in BRICS and longstanding membership in the G20, positioning it as both ASEAN’s largest economy and a bridge to global markets. At the same time, he emphasized that ASEAN operates as a community of equal members, with Indonesia seeking collaboration rather than dominance.
What Logistics and Investment Gaps Must Be Addressed?
Logistics emerged as a critical factor affecting competitiveness. Although global shipping costs have largely stabilised since COVID 19, transport expenses in Cambodia remain comparatively high. Sok Siphana pointed to plans to deepen the country’s main seaport to handle larger vessels and reduce reliance on regional transshipment hubs. Inland waterways were also described as underused assets that could lower export costs if properly developed. The Dialogue identified specific investment gaps, including Cambodia’s dairy market. With daily demand estimated at 120,000 to 150,000 litres and local production supplying only about 20,000 litres, the shortfall presents a clear opportunity for Indonesian investors with dairy processing expertise. Speakers encouraged Indonesian companies to see Cambodia not only as a domestic market of 17 million consumers but also as a strategic production base connected to ASEAN and broader regional trade agreements. Manufacturing, packaging, and assembly operations in Cambodia could serve much larger export markets under existing frameworks.
Why Are Youth and Perception Central to the Next Phase?
Generational change within Cambodia’s private sector was another key theme. Sok Siphana reflected on how earlier generations built businesses under post conflict constraints, often with limited international exposure. Today, a new wave of entrepreneurs educated abroad is returning with stronger familiarity in governance, compliance, and global business standards. Indonesia’s Ambassador described these young leaders as essential partners for deeper bilateral engagement and recalled initiatives that brought Cambodian entrepreneurs to Indonesia to broaden their regional outlook. Perception gaps were also discussed. Many Indonesians still associate Cambodia primarily with historical narratives, while Cambodian views of Indonesia may be shaped by external media. Expanding media collaboration, student exchanges, and business networking was seen as crucial to reshaping mutual understanding. Participants concluded that while government ties are solid, the next stage of cooperation will depend on stronger business to business links, academic partnerships, and more active information sharing across sectors.
Conclusion
Cambodia and Indonesia have built more than six decades of diplomatic trust, yet their economic relationship remains underdeveloped compared to its potential. By shifting from commodity trade to joint investment, improving logistics infrastructure, leveraging ASEAN frameworks, and empowering a new generation of entrepreneurs, both countries can unlock deeper and more sustainable growth. The Dialogue made one point clear: the foundation is strong, but the real opportunity lies in translating political goodwill into practical, private sector driven results.