PHNOM PENH: Cambodia is setting its sights on becoming the next Asian tiger economy, and the ambitious Funan Techo Canal project is a major stepping stone. This 180-kilometer waterway, connecting the capital to the coast with a budget of $1.7 billion, has the potential to be a game-changer.
The canal promises a direct water route to Cambodia’s deep-sea port, significantly streamlining trade and reducing transportation costs. This positions Cambodia as a strategic logistics hub in Southeast Asia, attracting foreign investment and fostering job creation across various sectors. Additionally, coastal areas like Kep and Kampot could see a surge in tourism due to the improved accessibility.
The canal is just one piece of the puzzle. Cambodia must prioritize workforce development by equipping its citizens with the skills needed for a logistics-driven economy. Establishing special economic zones (SEZs) along the canal route with tax incentives can further attract businesses and leverage the improved logistics network.
Embracing digital transformation is also crucial. Investments in high-speed internet, e-commerce platforms, and digital trade measures will ensure Cambodia’s seamless integration into global supply chains.
Lor Vichet, a vice president of a Cambodian commerce association, believes Vietnamese politicians should avoid politicizing trade issues. Instead, he says, Vietnam should embrace competition as a way to improve its economy.
According to Vichet, competition between ASEAN countries will drive down business costs and boost trade. He highlights a future trade project (FTC) that will streamline customs procedures, benefiting both Cambodia and Vietnam. This project, he argues, will increase trade volumes and generate government revenue that can be used to modernize Cambodia and invest in new technologies.
The Funan Techo Canal, coupled with a strategic and multifaceted approach, presents a golden opportunity for Cambodia. By prioritizing workforce development, fostering innovation through SEZs, embracing digital transformation, and ensuring environmental responsibility, Cambodia can unlock its true economic potential and earn its rightful place among the Asian tigers.