Published in the end of September, the annual EuroCham Business Confidence Survey – compiled from the responses of 115 member companies of the European Chamber of Commerce – found that while Cambodia remains an attractive destination for investment due its cheap labor, businesses were increasingly pessimistic in their outlook. Last week, EuroCham also published its updated White Book, an accumulation of 76 trade and investment policy recommendations, which could facilitate doing business in Cambodia.
Compared to 2015-2016, entrepreneurs who participated in the Business Confidence Survey feel that Cambodia’s regional competitiveness has slightly improved during the last twelve months. The cost of human resources is still seen as Cambodia’s biggest competitive advantage, however recent regulatory changes have had an adverse effect on how businesses perceive taxation, which is now seen more as a greater obstacle to doing business.
Consequently, this has prompted businesses to voice more concerns over unfair competition as being one of the main areas that have not improved during the past year. Respondents have also expressed dissatisfaction over the area of nontransparent practices and unofficial fees, where they feel that reforms of the Royal Government are yet to yield the desired results. Emphasis is also put on the need to strengthen the legal framework (clarification on existing laws and needs for new laws and regulation). On a more positive note, improvements have been noted on the education side, although staff retention and productivity remain significant challenges.
As for future projections, respondents remain cautious. The uncertainty during the pre-election period has a considerable influence upon their expansion plans and keeps perceptions on the ease of doing business relatively low, nevertheless a large majority (75%) still expect further growth albeit at a slower pace. In the future, the respondents intend to increase their focus on consolidating existing activities through investments in marketing or in human resources so as to take better advantage of the growing market and the rising middleclass.
In a second publication which was also presented last week, EuroCham formulates detailed trade and investment policy recommendations. This updated White Book comprises 76 policy proposals in eight categories. It is aimed at helping the Cambodian government improve its ease of doing business rankings and attract European investment to the Kingdom.
Both publications are available on http://www.eurocham-cambodia.org/publications