Working from Home and Initial ResearchWhile my internship has been traditionally held in Yangon, Myanmar, the global challenges posed by the pandemic and the regional ordeal engendered by the coup d'état have rendered my presence in the country less than plausible. Although touring the shimmering Shwedagon Pagoda or walking along the Kandawgyi Lake would have been delightful, the ensured safety of home from various risks undeniably warranted remote working. Besides, as Professor Warren once shrewdly noted, our chances of contracting malaria will also be much smaller this way.
The first few weeks of research were expectedly enlightening. With a main focus on Cambodia among all countries of the Greater Mekong Subregion, I started evaluating myriads of reports, surveys, journals and news articles to construct an initial outline of the brief. Preliminarily, in order to gain a comprehensive perspective on the brief’s topics, I reviewed recent investment, economy, and trade policy reports provided by prominent intergovernmental organizations and international financial institutions such as the WTO, UNCTAD, OECD, IMF, and World Bank. Once identifying relevant law and policy, trade relationships, and driving sectors, I traced back the reports’ cited sources in order to obtain further pertinent details. While data for almost every topic of interest were available to an extent, the lack of publicized information regarding bilateral investment agreements and transparency in court holdings and records have rendered relevant data challenging to collect. Nonetheless, the guidance and translated material provided by the on-site Open Development Cambodia team and the rest of the Open Development Mekong team have been extremely helpful with tackling such issues.
The Land of the Khmer: Economy and FDI
From 1998 to 2019, Cambodia underwent a drastic economic transition, which enabled the country to reach a lower-middle-income status in 2015 and aspire to attain an upper-middle-income status by 2030. Mainly driven by garment exports and tourism, Cambodia boasted one of the fastest-growing economies in the world.
Arguably, the most consequential factor to Cambodia’s economic growth was FDI. According to the UNCTAD, in 2019, Cambodia recorded its highest FDI at approximately $3.7 billion, owing to the robust foreign interest in the nation's manufacturing and service sectors. Most of the investment originated from public and private entities of China, intra-ASEAN sources, Japan, and South Korea.
However, Cambodia’s flare of economic glory was not immune to the global recession engendered by the COVID-19 pandemic: the World Bank’s data show that in 2020, its economy registered a growth of negative 3.1 percent, which was the sharpest decline in the nation’s recent history. In addition to the pandemic’s shock that decelerated the growth of Cambodia’s main economic engines such as tourism, manufacturing exports, and construction sectors, the partial suspension of preferential access to the EU market under the Everything but Arms (“EBA”) initiative also exacerbated the downturn. Nonetheless, analysts project that the nation’s economy will recover this year with the enhancement of external environment and government support. Similarly, although actual FDI in Cambodia will likely decline this year, there are positive signs of sustainable and diversified FDI inflows in the long-term.