B2B Cambodia sat down with James Roberts, Partner and Head of Advisory at KPMG Cambodia, to discuss the country's economic outlook for 2025-2026 and beyond.
B2B Cambodia: In light of recent geopolitical developments, organisations like the ADB and Mekong Strategic Capital have lowered their economic forecasts. However, they've also been optimistic about the country's long-term growth. From 2027 and beyond, do you agree or disagree with these forecasts? Could you share your thoughts?
James Roberts: “I would say it's not surprising at all. Cambodia's response to a range of external and domestic factors is actually quite reassuring because it shows that our economy is developing and it's turning into a modern, sophisticated economy that reacts to stimulus. Now, in terms of the economic outlook, Cambodia undoubtedly faces challenges in the short term. How long that downturn cycle will be will largely depend on the recovery program and the structures that are put in place by Cambodia's government, to turn around and drive the growth out of a down cycle. I'm hugely excited about the opportunities that will come with that growth from a low base.
Why am I so bullish about Cambodia in the medium to long-term? It's a very simple answer: young Cambodians. Cambodia has some of the best demographics in the world. Our age curve is beyond good. We are better than many, many countries, and especially the developed countries. That is what drives Cambodia's future.
B2B Cambodia: Do you think Cambodia has an edge over some of its regional competitors and neighbours?
James Roberts: "I think Cambodia has several edges over its regional peers and its regional competitors. One of them is power. We have 62 per cent green renewable energy—that's a huge advantage. We are a long way ahead in terms of that infrastructure. Cambodia has so many white space economies. Our land utilisation is so low. The potential for new industries to be developed in Cambodia provide a huge amount of economic stimulus that will only come online in the future as those industries develop.
"When we look at the current situation, the response to the conflict in Thailand, we see that Cambodia has suffered in some areas, like food shortages. The challenges in those supply chains highlight those opportunities to Cambodians. If I go to the supermarket and I can't find my favourite brand of noodles anymore, why don't I start a business that produces my favourite brand of noodles? What we have to look at for the next stage of Cambodia is to maintain our culture of entrepreneurship, to look at how we can support the establishment of SMEs and to encourage young people to want to start a business so that we can continue to grow. We have a landscape where there is very low levels of competition in Cambodia. In most sectors, you only have one or two successful players, and many other sectors are complete white space industries.
“If we look at agriculture, if we look at cashews, the government is working extremely hard to stimulate cashew processing because our farmers are the largest or second largest producer of cashews in the world. Unfortunately, because of systemic issues, we produce very few processed cashews. So now the government is really working to stimulate this sector. But what we need is our young Cambodians to come through and see this as an opportunity to produce goods that capture that value and stop it from going overseas. I think there's a lot of effort that's being put in here on the government's side that we need to match as the private sector to capture that value for the country.”
B2B Cambodia: As a legal professional advising investors on the Cambodian market, can you share any shifts in investor sentiment you've observed in light of recent developments? What has been your approach to advising clients on how they can navigate times of uncertainty?
James Roberts: "I think the core message to investors who are coming to Cambodia remains the same. In Asia, and in emerging markets, we manage problems proactively before they happen. We have very detailed contracts. We don't rely on case law. So, we already know how a problem will be resolved before it becomes a problem.
“Because of our late start and the troubles that Cambodia went through, we're a little bit behind the rest of the region, and that means that the opportunities that already existed in our market are now bigger than ever. And that has to, and will, attract investors to come to Cambodia. We have one of the most favourable investment laws of any country in the world. We allow 100 per cent foreign ownership. We provide up to nine years of tax exemption for companies that come to Cambodia. We have all of the tools for people to come to Cambodia and be successful. They have to be mature about how we do that, and we have to manage risks in a different way in emerging markets to how we manage them in the U.S. or Europe. In the U.S. we can rely on the court system. In Cambodia, we can't rely on the court system as heavily, and we have to think differently about managing risk.”