Business Agreements & Investment Were Top Agendas During Cambodian PM 2024 South Korea Visit
At the invitation of the President of the Republic of Korea, Yoon Suk Yeol, Cambodian Prime Minister Hun Manet visited South Korea for the first time from May 15-18, 2024 resulting in a number of agreements to bolster trade and business and forge a strategic partnership.
Investment-focussed agreements were signed between the two countries, covering various sectors from training & development, banking, defence, infrastructure, and drug management among others.
According to the Cambodian government's media, Cambodia and South Korea signed six agreements to expand multifaceted cooperation in financial development, investment flow, intellectual property, drug management, vocational training, and concessional loans for rural development.
Cambodian & South Korean Strategic Partnership
South Korean media also confirmed that the two leaders adopted a joint statement on the establishment of a strategic partnership and agreed to leverage the Comprehensive Economic Partnership (RCEP) and other free trade agreements (FTAs) between them.
- The two nations have agreed to strengthen defence and security cooperation, and a South Korean naval vessel will dock at a Cambodia port in 2024.
- There was also an agreement for increased cooperation in peacekeeping operations, combating transnational crimes (such as drug smuggling, human trafficking and cyber crimes.)
- Renew commitments to working together at the United Nations, and other international and multilateral organisations.
Under the strategic partnership, the two countries will also increase economic and financial cooperation through their bilateral free trade agreements, and promote cooperation across the social, cultural and development sectors.
Cambodia-Korea Business Forum 2024
During the Cambodia-Korea Business Forum, which was held in Seoul, Prime Minister Hun Manet encouraged Korean investors, highlighting the potential benefits of starting their investments in Cambodia.
In a meeting with South Korean Prime Minister Han Duck-soo, it was noted that Cambodia has potential in the automotive industry and the South Korean PM supported an initiative to create special economic zones (SEZ) for Korean companies in Cambodia and to establish regular consultation sessions between the Korean Business Association in Cambodia and Cambodia’s government.
Han Duck-soo also expressed his pleasure with the additional Official Development Assistance to Cambodia through the Korea International Cooperation Agency (KOICA) grants and concessional loans through the Korea Economic Development Cooperation Fund (EDCF).
Six Agreements Signed Between Cambodia and South Korea 2024
On May 16, 2024, Hun Manet and the Korean President agreed to sign six documents, which included:
- (1) Agreement on Korea’s Economic Development Cooperation Fund (EDCF) 2022-2026
Korea’s EDCF is a program promoting economic development in developing countries, established in 1987. As part of the EDCF financing initiative, EDCF financing to Cambodia has expanded dramatically in recent years, reaching USD $1.8 billion in commitments in 2022.
Projects under this program include a USD $246 million loan for the Cambodia-Korea Friendship Bridge Project, to be completed in 2027, while previous EDCF projects in Cambodia include green energy transmission, water pipelines, irrigation canals, the construction of roads and bridges, and health initiatives.
The EDCF framework arrangement between Cambodia and Korea will total USD $1.5 billion between 2022 to 2026 and reach a total of USD $3 billion between 2022 and 2030.
- (2) MoU between the Council for the Development of Cambodia (CDC) and the Ministry of Commerce, Industry and Energy of the Republic of Korea, aimed at strengthening investment flow between the two nations.
- (3) MoU between the Cambodian Commerce Ministry (MoC) and the Korean Intellectual Property Office (KIPO) to build a foundation for intellectual property (IP) cooperation.
- (4) MoU between the Royal Government of Cambodia (RGC) and the Korea International Cooperation Agency (KOICA) to promote the Professional Skills and Talent Development Programme.
- (5) MoU on a concessional loan agreement for the Rural Road Improvement Project Phase Four between RGC and the Export-Import Bank of Korea.
- (6) A letter of intent to strengthen collaboration on drug management between GDCE and the Korea Customs Service.
Agreements Between Cambodian & South Korean Chamber of Commerce, Banking & Finance
Prime Minister Hun Manet also witnessed the signing of other agreements between the Cambodia Chamber of Commerce (CCC) and the Chamber of Commerce and Industry of the Republic of Korea.
MoUs were signed by the National Bank of Cambodia’s (NB) governor Chea Srey, with the Credit Bureau Cambodia “signing a Tripartite Memorandum of Understanding with Credit Bureau Korea and JEONBUK Bank on Cross-Border Credit Report Sharing between the Kingdom of Cambodia and the Republic of Korea,” announced the NBC.
The NBC Governor wrote on social media that the three agreements signed with Korean financial institutions, including JB Bank, Kookmin Bank, and Woori Bank, aim to further promote cross-border QR payments and remittances for migrant workers.
The agreements aim to “facilitate tourism business activities, promote cross-border payment transactions, remittances and payments in the national currency to increase trust, security, efficiency, stability and be more environmentally beneficial for the people and businesses of both countries.”
An MoU was also inked by the Credit Bureau (Cambodia) Co Ltd with the Korea Credit Bureau (KCB) and Jeonbuk Bank Co Ltd, while an additional MoU was signed between the Worldbridge Group of Companies and Daewoo E&C.
Cambodia Tourism Promoted
In addition to the formal meetings, Cambodia had a presence at the 39th Seoul International Travel Fair 2024 (SITF 2024) and the third World Tourism Industry Conference in Seoul, represented by Secretary of State Long Phirum who presented the Kingdom’s prized strategy of the BUILD + 3Ds initiative.
Green Energy Investments
Prior to the Prime Minister heading to South Korea, a delegation from Hyuckjin Energy Plant Engineering, was in Cambodia to meet Sun Chanthol, Deputy Prime Minister and First Vice-Chairman of the Council for the Development of Cambodia (CDC) to explore converting Cambodia’s waste into clean energy.
Real Estate Development
As part of the agreements In South Korea, WorldBridge Group and South Korea's Daewoo E&C announced they will be partnering on real estate development projects and exploring investment opportunities in the Kingdom.
Cambodia and South Korea Trade Overview 2024
According to Hun Manet, the bilateral trade volume between the Republic of Korea and Cambodia reached approximately USD $751 million and Korea’s foreign direct investment (FDI) in Cambodia reached USD $30 million in 2023, and South Korea’s total FDI in Cambodia as of 2024 had reached USD $5 billion.
According to the General Department of Customs and Excise of Cambodia (GDCE) bilateral trade between Cambodia and Korea reached USD $256 million in the first four months of 2024.
With the Cambodia-Korea Free Trade Agreement, in the coming years, South Korea has agreed to remove tariffs on 95.6 per cent of products imported from Cambodia, while Cambodia will remove import duties on 93.8 per cent of imported goods.
Cambodia and South Korea trade relations are strengthened under the:
- Cambodia-Korea Free Trade Agreement (CKFTA) 2022,
- ASEAN-Korea Free Trade Agreement (AKFTA) 2010,
- Regional Comprehensive Economic Partnership (RCEP) - South Korea joined in 2022.