infrastructure development in CambodiaCambodia has remained one of the fastest-growing economies since 2017. The Southeast Asian country’s growth rate averaged about 7.9 percent since the mid-90s. The economy’s fast growth can be attributed to Cambodia’s focus on textiles, tourism and infrastructure development. Although still agriculture-dependent, Cambodia is improving its lagging infrastructure and attempting to rise out of its lower-middle-income status. Foreign nations such as China and organizations such as the European Development Bank are investing in infrastructure development in Cambodia, such as transport infrastructure to help Cambodia facilitate trade, increase competitiveness, add jobs and help reduce poverty.

Progress in Infrastructure Development

Although infrastructure development in Cambodia is increasing, only 96 percent of rural roads and 70 percent of provincial roads are paved. The World Bank-financed the Road Asset Management Project (RAMP) to support Cambodia’s path to road development, which resulted in more than 292 miles of rehabilitated roads with improved climate resiliency and road safety. Ports are also important to Cambodian trade, though it has been stated that the country’s seaport has the highest fees out of all Asian countries. The government said in 2019 that it would reduce its high fees to help increase competitive prices.

Sihanoukville Autonomous Port (SAP) is Cambodia’s only commercial and international deep seaport. Since 2014, the number of containers the port received has grown by 11 percent. It can hold about 4,560 containers total, but there is a plan to expand the port so that it can handle approximately 90 percent of ships in the region by 2023. When completed the TEUs (twenty-foot equivalent units) will rise from 537,000 to 1.29 million. A TEU is the length of a standard shipping container.

Investors See a Positive Future in Cambodia

China is Cambodia’s largest investor. Cambodia is seen as an important project due to frequent trade between the two nations. The development of roads, ports, railways and other forms of transportation benefits both countries. China has created jobs through manufacturing investments and has contributed to real estate and hydropower plant construction. China Development Bank invested more than $5.7 billion from 2007 to 2019 in infrastructure development in Cambodia, and the bank is constructing an expressway between Sihanoukville and Phnom Penh costing $1.87 billion. The port in Sihanoukville is a part of China’s Belt and Road Initiative.

The European Development Bank (EIB) is also seeing a great future in Cambodia’s development, as it is investing $57 million in Cambodian rural infrastructure starting in 2020. The project is a joint operation between the EIB, the International Fund for Agricultural Development and the Royal Government of Cambodia. About 200,000 rural families will benefit from new technology, safer roads and better food supply. The money is invested in the Sustainable Assets for Agriculture Markets, Business and Trade project (SAAMBAT), which is a rural development project launched in February 2020. The project will create 4,500 jobs and 500 SMEs. It will also result in training 25,000 Cambodians on digital technologies that will improve business and increase trade.

Infrastructure development in Cambodia is not the only area affected by recent population growth. Poverty reduced from 48 percent in 2007 to 13 percent in 2018, which went along with Cambodia’s fast growth rate in the past two decades. As a country develops, its poverty rate is lowered. Ports, roads, airports and the power sector are all improving as part of Cambodia’s Rectangular Strategy Phase V, which encourages the development process and the policies that align with further development. Cambodia’s goal of becoming an upper-middle-income country by 2030 expresses the country’s positive outlook in its future.

– Lucas Schmidt
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