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.”
Watch Part 2 of our interview with James Roberts, Partner and Head of Advisory Services at KPMG Cambodia
B2B Cambodia: The main drivers, or four pillars, of Cambodia's economy are widely recognised as agriculture, tourism, garments manufacturing and real estate. Do you think Cambodia should continue to rely on these pillars, or is diversification more important?
James Roberts: "I think if we look at the agricultural sector alone, Cambodia's land utilisation remains incredibly low. Our government have put in place a super public-private partnership (PPP) programs in order to try and stimulate that. Now, we need partners to come and work with our people to build and develop that sector.
“But even within the sectors that are more developed, there remain great opportunities. Within the banking sector, for example, we've got an emerging class of FinTech with Bakong and some of the new technology solutions that are coming out that are going to drive the next generation of opportunities for Cambodians. So whether you're in an early stage sector like agriculture, or you're in a much more mature sector, like banking, there's always opportunities there.”
B2B Cambodia: The government's Pentagonal Strategy places greater focus on digital technology across all sectors and industries in Cambodia, and there has been a rising interest and demand for data centres and higher-end manufacturing in the country, for example. What new or developing frontiers do you think hold the most potential for Cambodia to successfully achieve greater economic diversification?
James Roberts: "I think the government has been wildly successful in implementing—if we look at the Ministry of Commerce and the Council for the Development of Cambodia (CDC) for example—its technology programs. H.E. Sun Chanthol has also been extremely vocal in telling the world about what has been achieved at the CDC in terms of project approvals, and he has been able to do this almost anywhere on the planet.
But what we have to be careful with is Cambodian people still need jobs. We have people who are relatively low-skilled and who could be rapidly outpaced by technology. We have to ensure that we support those people through education, upskilling, and through developing our economy before technology comes in, makes them obsolete and leaves them behind. That's a very real risk of technology.
“This isn't a Cambodia unique issue, the fourth industrial revolution is a challenge that's faced by governments around the world, and solutions are being bandied around by many countries for everything, from universal basic income, to full state support and beyond. There is no coherent single answer as a ‘best solution’ or a ‘best fit solution’ for this problem, and we will have to look carefully at it. In Cambodia, our primary industries still have huge economic potential for us, as a country, as an employer, and to lift our people in the province out of poverty, and I look forward to seeing that happen.”
B2B Cambodia: When speaking with foreign investors, what are the main sectors and areas of the market you highlight to inform them of Cambodia's viability for business?
James Roberts: "At KPMG, we have been supporting Cambodia now for many years, going to other countries, bringing senior Cambodians with us to tell Cambodia's story, and to highlight to investors the opportunities that exist in these markets. That's part of our commitment to this market, to this country, and to its people.
“In the developed world, you have high competition. In Cambodia, you have very low competition. Do you want to stay at home and fight with the same people that you've been fighting with over market share, in some cases, for 200-300 years or more? Or do you want to come to a country where competition is low, or even non-existent? Where there is a market that's crying out for your goods and services, where you can come in and capture market share very quickly, with relatively low cost of acquisition, and you can solve a problem for its people.
The absence of high levels of competition are a major driver for why people should evaluate participation in the Cambodian economic opportunity.