Japan has been involved with Cambodia for almost 30 years. What are the roots and reasons for this strong Japanese engagement in Cambodia?
Japan has historically been deeply involved with Association of Southeast Asian Nations (ASEAN) countries, and when Cambodia overcame difficult times and tried to achieve democratization and create a new nation, it was natural to support them as an Asian compatriot. Since then, countries around the world have become involved with Cambodia, but we have taken a slightly different approach from China or Western countries. I think this is because many Japanese people thought that they could contribute to this country in a Japanese way – by building capacity and production with a long term view on strategic investments in infrastructure and manufacturing.
Have business strategies evolved over the years, and if so – how?
I think that business strategies will naturally evolve according to the times, the social environment, and the stage and speed of development. What I can say is we have to consistently stay close to this country, think about the people, respond to the social issues necessary in the process of development of Cambodia, and maintain a win-win relationship.
How many businesses are under Japanese leadership, and what are the key sectors Japanese firms are active in today?
Currently, there are approximately 270 member companies in JBAC. The seven departments, which are the main sectors, include Manufacturing, Construction & Real Estate, Foreign Trade, Transport, Finance & Insurance, Commerce, and Service.
Has the Covid-19 pandemic affected Japanese operations in the country?
For certain sectors, operations have been deeply affected. In particular, the tourism industry – travel agencies, hotels, restaurants, and so on – and some manufacturing industries are being affected. However, as a whole, the number of JBAC member companies has held up and remained consistent throughout the year. We hope for an early end to the spread of the infection before the effects become more serious.
As Cambodia’s economy evolves, what are the sectors or industries that Japanese businesses are likely to expand into in the future?
Cambodia is not a large country, but the country as a whole is young with a median age of just 26. It has a geographic advantage being at the center of the Mekong region, and great potential thanks to its very open economic policies toward international investors, offering many incentives to a wide range of investments in particular in the upcoming years. A great advantage of Japanese investment lies in the manufacturing industry, and I hope that the Cambodian government will continue its policies to expand and innovate this sector together with our Japanese firms. I also think that the agricultural sector, which is one of the country’s major industries, has great potential which can be developed fast in the coming years.
Infrastructure-related fields still have room for improvements, and I think that Japan could and should definitely be involved in this important work.
How important is Cambodia as part of regional supply chains, and how will its integration into regional economies impact Japanese investments?
ASEAN is increasingly strengthening its economic ties in the region. I think it is important not to think about Cambodia as isolated, but to think about markets that can be seen with a broader perspective, such as horizontal development of businesses originating in Cambodia as a member of ASEAN and the Mekong region.
This article was first published in Globe Media Asia’s Focus Cambodia 2021-22 magazine.
