Executive Summary on Country Investment Risk Analysis on Cambodia

Country overview Benchmarks

Singapore Cambodia Malaysia
Agricultural Land
arable land GDP per capita - 2017 (USD) Best Worst
23% Real GDP annual growth - 2017 (%)
other
10 100,000 Ease of doing
11% 100 0
6.9 business score
Phnom Penh permanent 5.9 94,100

GDP per capita

Real growth
crops
Malaysia
1% Moody’s
3.6
forest 5 50,000 sovereign Aaa C
56%
Cambodia location in South East Asia and its flag (shown on the map is Phnom Penh, its capital city) permanent credit rating
pasture
9% 29,100
4,000 Basel AML
• Cambodia is a country in Southeast Asia located north of Malaysia and borders the GDP Composition by Sector 0 10
0 0 score
Gulf of Thailand and neighboured by Laos, Thailand, and Vietnam. agriculture Cambodia Malaysia Singapore
• Religion – Buddhist (95%) while the remaining minority is Islam, Christian and 14%
others. Main languages are Khmer, Cham and French. 100

FDI inflow
Global Peace

(USD bn)
• Government – constitutional monarchy, the King as Head of State and the Prime 64 1 5
services Index
45%
Minister as the Head of Government (incumbent: Hun Sen) industry 50
• Main industry – Tourism, garments, construction, rice milling, fishing, wood and 41%
3 10 Corruption
wood products, rubber, cement and textile Perception 100 0
0
• Currency – Khmer Riel (KHR). Population – 16.45 mil. Land area – 176,515 sq km. Cambodia Malaysia Singapore Index

Risk Highlights and Assessment Impact SWOT Analysis

STRENGTH WEAKNESSES
G Government Effectiveness
• Large supply of low-cost labour and one of lowest in Asia • Uncertain corporate payment behavior
 Bureaucratic bottleneck prevails • Member of ASEAN and WTO • Lack of transparency and high levels of corruption
 Human right abuses • Relatively young population • Poor infrastructure in various areas
 Corruption remains pervasive • Foreign shareholders and directors can set up businesses. • Law on investment restricts foreigners from owning land
• Favourable climate for agribusiness investment • Foreign labour workers capped at 10%
S Security P Political Stability R Legal & Regulatory • Foreign direct investments are likely to remain high • Increased crime rates over the past 3 years
 Border clashes  Opposition  Judicial interference by • Easy access to credit facilities • Financial information is often unavailable and unreliable
with Thailand and suppression authority • Tax benefits: Import duty exempts for foreigners, tax holidays • Many unskilled workers
Vietnam  Authoritanian rule  Common bribery in for up to 9 years, low corporate tax rate at 20% • English proficiency is amongst the lowest in Asia
 Weapon contract I
possession  Expropriation of foreign OPPORTUNITIES THREATS
P S L G
 Violence, assets • One of the fastest growing economies in the region • Increased labour wages due to rapid economic growth
F
mugging, armed  IP and private property • Agricultural sector is the largest employer and experiencing • Default probability is high
robberies rights not strongly strong growth • Possible trade sanctions by EU due to violation of human
 Organised crime enforced R • Favourable investment environment based on government new and labour rights
policies on liberal trade e.g Special Economic Zones, FDI • Weather hazards may impair agricultural activities
F Financial L Labour Market I Infrastructure
 Underdeveloped  Limited skilled workers  Logistics infrastructure Overall conclusion
financial sector  Foreign workers remains inadequate The overall risk assessment on Cambodia is High mainly attributed to the fact that business may face a number of
 Absence of local cannot exceed 10% in  Poor quality building Political Stability P Likelihood challenges in Cambodia, as reflected in the results of the analysis for ease of doing business. In light of the above analysis,
Financial F
bond market any company  Underdeveloped IT and Labour Market L Legal & Regulatory R GRMD opines that pursuing into investment initiatives in Cambodia (be it for land acquisition, rubber plantation, setting up a
 Loose monetary phone line Infrastructure I Government Effectiveness G representative Office) may not be a viable option for the Group, unless appropriate measures are proactively undertaken to
policies infrastructure Security S address the highlighted high risks areas.