After years of peace, the resurgent and ambitious nation is gradually emerging as a regional business destination for foreign investors
Cambodia, after a decade of peace and rebuilding, is following the fiscal lead set by neighbouring Vietnam and is shaping-up for its turn as a destination for high-risk venture capital. Its ambitious plans are backed by a booming banking sector, and include a stock market which officials insist will open within 18 months, and construction projects that are reshaping Phnom Penh and the provincial cities.
Following the July polls, when Prime Minister Hun Sen and his ruling Cambodian People's Party (CPP) won another five-year term, most expect the economy and development to stay the course with returns on investments continuing to improve.
John Brinsden, vice-chairman of Acleda Bank, says the biggest factor behind economic growth is a government-friendly attitude to business. A dollarised economy, extremely low debt levels - total deposits remain greater than loans outstanding in the banking system - a negotiable tax regime and low labour costs are key planks in attracting offshore capital. 'Big firms, small firms, family-run firms, firms from all over Asia have been building up their cash positions over the past few years and are now pouring it into Cambodia,' he says.
South Korean, Chinese and Japanese investors feature prominently while the United States, Australia, Britain and France - who contributed heavily to the rebuilding process in the aftermath of war - have significantly bolstered their business presence. Russian capital is also finding a home, particularly in coastal developments outside of Sihanoukville in the country's south.
Mr Brinsden, with 47 years of banking behind him, says powerful decision makers in big corporates began coming to Cambodia in 2005. Some received tax holidays on the use of electricity, a perennial sore point for its high cost and unreliability. Others were attracted because they could establish wholly owned subsidiaries. 'Unless you want to own land there is no need to forge a joint venture with a local partner. Many of the banks, for example, are 100 per cent foreign owned. The government attitude to business makes this one of the easiest places to set-up,' he says.