“A comfortable lifestyle on $509 per month”. A sentence in an article on the International Living website caught my eye. Not that I am looking to retire, far from it, but I know a lot of people who will be soon and they are unsure of whether they will be able to or not. According to the same publication, Ecuador has been voted the top rated country to retire for expats, but I like exotic and Ecuador just doesn’t sound exotic. However Cambodia does and not its capital Phnom Penn but its second largest city Battambang, where you can rent a furnished apartment with a swimming pool and maid service for $285 per month.
Reading the article allowed an errant thought of retirement cross my mind, but I am glad it faded fast, chased by the realization of all the bills I incur on a monthly basis. Cambodia has recently been making a lot of economic news as it enters the world of the ASEAN region, and opens its economy to foreign direct investment. GDP growth, which is mainly made up of agriculture (though manufacturing has grown in importance recently), expanded by 6.9% in 2015 which was inline with expectations. In May 2016, the Asian Development Bank recognized Cambodia as one of the fastest growing economies in Asia, predicting current rates of GDP growth to continue through 2017.
Tourism, and hence the article in International Living, is a fast developing sector of the Cambodian economy. According to the Asian Development Bank in a Bangkok Post article, “the country has ‘embraced the factory Asia’ model of economic growth deploying low cost labor to manufacture products for export. Cambodia’s large supply of inexpensive, low-skilled labour has attracted substantial foreign direct investment into the production of garments and footwear for export.” All very promising.
The Sihanoukville Special Economic Zone (SSEZ) set up by the government jointly with a Chinese multinational recently reached a milestone with the one-hundredth Chinese invested factory, which will employ over 10,000 Cambodians. In 2006, the first SEZ was set up and since then, 32 others have been built with all of them being close to either the Thai or Vietnamese borders, with the aim of promoting exports. The success of these zones can be directly measured by the unemployment rate which was approximately 5% in 2015. So the ultimate dilemma, should this continue, may be for the government to decide whether to import labor from neighboring countries.
Together with the SEZs, the government has decided to make an aggressive push to increase the visibility of its tiny stock exchange, by holding conferences with private businesses informing them about the advantages of going public. A slow process no doubt, but one that is sorely needed, if retail foreign investors are to take advantage of this economy. Currently there are only four companies listed on the exchange, and the government’s hope is to build an exchange that can rival that of either Bangkok and Ho Chi Minh City. I wish them well in their endeavor.
So, back to the International Living article. “There is scarcely a business in town that remains open past 9 pm” an expat is quoted as saying. There are art galleries, coffee shops, Buddhist Temples, that “provide a tranquil refuge for inspiration, rest, and reflection,” and small boutique style restaurants serving the best of Cambodian cuisine. Sounds just like California doesn’t it? Only cheaper.