BMI Research, a unit of Fitch Group, has maintained its short-term political risk index score for Cambodia at 64.4 out of 100, which is lower than the Southeast Asia median of 69.9, sharing that Cambodian People’s Party’s (CPP) landslide victory was of “little surprise”.
Noting that a lower score implies higher risk, BMI said Cambodia’s rating is therefore higher than Thailand, where the
“uncertainty about political continuity is very salient due to election volatility”.
Having expected Hun Manet to be eventually appointed as the prime minister for Cambodia, BMI Research opined that the political events this week were largely in line with the status quo, with limited implications for policy continuity and economic growth.
Recall that, Hun Sen resigned as prime minister of 38 years on July 26, following his party’s landslide victory, before handing the post over to eldest son Manet, who will officially take office on August 10.
“However, Hun Sen would retain the presidency of the ruling CPP, and with it considerable executive authority,” the research house highlighted in a note to investors today.
Quoting media reports, it shared that plans to transfer leadership to the 45-year-old four-star general and Royal Cambodian Army commander has been in the works for sometime now.
BMI Research mentioned that there are views expressing that a leadership under Manet could lead to a shift in Cambodian foreign policy, “one that leans slightly closer towards the US instead of mainland China”.
“This is because of his ties to the West, [having] attended the West Point Military Academy and New York University, and the UK’s University of Bristol,” it wrote.
That being said, Hun Sen’s continued presidency in the CPP, thus retaining considerable de facto authority in the executive decision-making process, would “maintain Cambodia's long-standing friendly relations with Beijing”.
“As a consequence, China looks set to remain Cambodia’s largest foreign investor (30 percent of total investments in Cambodia), and an increasingly important trade partner,” BMI Research surmised.
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