By Chhay Lim
2023 marked a crucial turning level in Cambodia’s modern political panorama because the reins of management handed from former prime minister Hun Sen to his eldest son, Hun Manet, in a as soon as in three-decade premiership change. Cambodia’s management reshuffle has heralded a major transformation with a youthful technology of leaders pledging to steer the nation in the direction of larger development, peace and stability.
This transformation in management additionally precipitated a shift in Cambodia’s international coverage agenda. Beneath Hun Sen, the international coverage was perceived as intently aligned with China, relying closely on Chinese language help and investments for growth whereas supporting the regime’s legitimacy. Now, Hun Manet faces the crucial job of diversifying Cambodia’s international coverage. He should keep pleasant ties with China whereas cultivating relationships with different nations to maximise advantages at residence, as overreliance on any single nation poses dangers to Cambodia’s autonomy and financial stability.
Sustainable financial efficiency stands as the first supply of public belief, reputation and legitimacy for Hun Manet’s authorities. However within the face of a shifting exterior panorama characterised by international financial stagnation and provide chain disruptions, Cambodia should mitigate threat by adopting new methods to diversify its financial partnerships. The extended slowdown within the Chinese language financial system and its persisting actual property disaster, a sector upon which Cambodia has lengthy benefitted from, highlights the vulnerabilities of overdependence.
Cambodia’s building and tourism industries have skilled speedy development over the previous decade, largely pushed by Chinese language buyers and vacationers. These sectors have emerged as strategic pillars of Cambodia’s financial enlargement, respectively contributing roughly 9 per cent and 21 per cent to the nation’s GDP previous to the pandemic. However the slowdown in Cambodia’s property market will doubtless pose extra dangers by growing debt burdens, whereas declining Chinese language shopper confidence will stay a barrier to spending on journey.
In November 2023, the World Financial institution projected that Cambodia’s financial system will face challenges because of weak capability in logistics and transport and an unreliable power provide, which can proceed to impose excessive prices for companies and customers. These challenges will probably be additional exacerbated by international oil and meals worth shocks and weakening international demand.
Cambodia’s ruling elites are prioritising market enlargement and diversifying financial relations by diplomacy. Within the six months since taking workplace, Hun Manet’s authorities has launched into a flurry of diplomatic engagements with current and new companions at unprecedented ranges. These efforts are usually not solely difficult perceptions of Cambodia as a Chinese language consumer state however are additionally essential to diversify markets with a view to facilitate funding development and export worth.
Hun Manet’s authorities has engaged with greater than ten nations within the final six months, establishing a brand new degree of diplomatic ties with states resembling Antigua and Barbuda, Liechtenstein, Uganda, Georgia, Canada and the Netherlands. Cambodia’s accepted fixed-asset funding initiatives have totalled US$1.39 billion through the first two months of 2024, a outstanding surge of roughly 500 p.c in comparison with the corresponding interval in 2023. The Regional Complete Financial Partnership and the Cambodia–China Free Commerce Settlement have been vital catalysts for attracting these investments.
Equally vital to those financial beneficial properties is Hun Manet’s aspirations for exterior legitimacy, notably contemplating widespread criticism across the undemocratic nature of his get together’s political succession in 2023. There are optimistic indicators that Cambodia’s relationship with the West has improved, with Hun Manet holding quite a few bilateral conferences together with his US counterparts. Seeking to Europe, Hun Manet has initiated diplomatic resets with France whereas beginning to woo smaller EU members, in hopes of strengthening a better friendship with the European Union, an necessary marketplace for Cambodian textile and footwear exports.
As Cambodia endeavours to re-establish strategic communication channels with the West, Hun Manet could have to boost the nation’s democratic circumstances to achieve Western favour. Cambodia ought to perceive that opening area for civil society, unbiased media and enhancing democratic circumstances won’t essentially weaken their ruling energy however as an alternative improve Western companions’ confidence and probably catalyse larger financial advantages by help and funding. As Hun Manet seeks to transition from his father’s shadow, these diplomatic efforts might assist construct his legacy.
From Asia and Europe to Latin America and even Africa, these efforts sign a optimistic begin in the direction of extra proactive Cambodian diplomacy on the worldwide stage. Domestically, Hun Manet should nurture a brand new engine for post-COVID-19 development, as legitimacy primarily based on financial efficiency stays key to sustaining his regime’s reputation. Externally, Cambodia is eager to imagine a extra nuanced function in an ever-changing geopolitical panorama.
However it stays to be seen in the long term if the present administration’s diplomatic efforts will carry extra substantive financial beneficial properties. Extra have to be achieved to find out the success of those endeavours, resembling enhancing the capabilities of international service officers to interact in efficient diplomacy and enhancing enterprise circumstances at residence to draw international investments.
Chhay Lim is a Visiting Fellow on the Heart for Southeast Asian Research of the Institute for Worldwide Research and Public Coverage, Royal College of Phnom Penh. He’s additionally a Younger Chief for the Pacific Discussion board Worldwide and the Japanese authorities’s MEXT Scholar at Ritsumeikan College.
Nory Ly is a Chevening Scholar on the College of Bristol and a Analysis Affiliate on the Asian Imaginative and prescient Institute, a think-tank primarily based in Phnom Penh.
