Economy

Economic Improvements Await in 2022

A bright forecast is being predicted for Cambodia’s economy in 2022, with the rice, garment and real estate sectors expected to grow – but little improvement to the human rights landscape sits on the horizon.
Worker walks past a building in Tuol Kork, Phnom Penh. Picture: Sam
Worker walks past a building in Tuol Kork, Phnom Penh. Picture: Sam

Things are looking up for Cambodia’s economy in 2022, with the rice sector slated to grow due to lifted tariffs, real estate is predicted to recover, and garment exports will continue to grow. However, human rights issues will remain unchanged, senior industry players forecast.

“I’m positive about the rice outlook in 2022. The rice tariff has been lifted again starting with the shipment of rice from January 18,” said Andy Lay, CEO of City Rice Import Export and Cambodia Rice Federation’s Vice President.

A rice worker in Phnom Penh on December 7, 2021. Picture: Sam
A rice worker in Phnom Penh on December 7, 2021. Picture: Sam

He said this could be hampered by objections from the EU but to date, there have not been any. “Even if this is the case, it will need 6 months for investigation and 4-5 months to implement, so we are safe for 2022.”

Cambodian fragrant and jasmine rice are well known with international markets in China and Europe, he said, adding in 2018-2021, City Rice saw a large volume of fragrant and Jasmine rice being shipped to the EU despite tariffs being in place.

“We were top 1 in 2020, exporting 86000 tons. And Top 1 again in 2021 by exporting around 100,000 tons (90,000 tons being exported already by November 2021),” said Andy Lay. “So, in 2020, we broke the record of 86,000 tons, which no exporter has ever exported before,” Andy Lay said. He added 2021 will be another record-breaking year for single firms who export six figures.

For City Rice, Any Lay said it has been his passion and goal to bring the best quality Cambodian rice to the world. “Quality brings us to the top… our quality is always consistent and fresh from farmers to deliver to the plate of the end consumer.”

For the garment sector, provided conditions remain stable, the industry remains optimistic that export will continue to grow. Kaing Monika, deputy secretary at Garment Manufacturers Association in Cambodia (GMAC), predicts it will be a moderate growth for garments and good for travel goods.

Factory workers leave work in Phnom Penh on December 14, 2021. Picture: Sam
Factory workers leave work in Phnom Penh on December 14, 2021. Picture: Sam

“Relocation of some garment orders out of China would continue to benefit Cambodia,” he said. Kaing Monika added internally, the industry needs to be efficient in terms of cost control as a production base country.

“Pension fund schemes will soon be implemented and we are also nearing the election year, so wages are expected to rise much higher than previous years. Social and environmental compliance costs are also expected to rise,” Kaing Monika said.

For 2022, foreign brands will also focus on sustainability, work he described as “hard but doable”.

“Suppliers must have an environmental protection program and clean energy program. There must be targets and reports that show progress over time,” he said.

Chrek Soknim, president of Cambodian Valuers and Estate Agents Association (CVEA), said since November, business has gradually started to improve.

“Real estate at the end of 2021, when the country reopened, we have seen signs of growth as people gradually start to travel again, although the power of buying and selling is not yet that much,” Chrek Soknim said.

The human rights situation is unlikely to improve in 2022, said Am Sam Ath, deputy director of rights group Licadho’s investigation team.

Rush hour in Phnom Penh on December 13, 2021. Picture: Sam
Rush hour in Phnom Penh on December 13, 2021. Picture: Sam

“According to my observations, in the last few years, the human rights situation has not gotten better. On the contrary, people still consider the human rights situation to be deteriorating and if we look to 2022, I think there won’t be better situations for human rights.”

With the commune councilor election and Cambodia holding the chair of ASEAN, Am Sam Ath said, “I think that the rehabilitation of the human rights situation and democracy is impossible.”

He said land disputes will continue to happen and the rights of NGOs and associations, especially those working with environmental and social issues and human rights, will face challenges as some have not registered correctly.