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BRI brings profound impact to Cambodia

By Digby James Wren and Seun Sam | China Daily | Updated: 2023-08-08 06:40

This photo taken on May 21, 2023 shows the entrance of the Sihanoukville Special Economic Zone (SSEZ) in Sihanoukville, Cambodia. [Photo/Xinhua]

The Belt and Road Initiative, the most ambitious and expansive infrastructure connectivity and development project ever conceived, was proposed a decade ago. The initiative connects about 150 countries in Asia, Europe, Africa and Latin America through a network of infrastructure investments, trade agreements and cultural exchanges. Cambodia is among the countries that have seen the greatest impact of the Belt and Road Initiative on its infrastructure, economy and cultural landscape.

Cambodia's strategic location on the Mekong River south of Laos and between Thailand and Vietnam on the Gulf of Thailand has made it an important hub for trade and connectivity in the Southeast Asian region. And China's investments in Cambodia have catalyzed a remarkable transformation of its infrastructure.

New highways, railways, seaports and airports have been built or old ones upgraded, facilitating efficient transportation of goods and movement of people within and beyond Cambodia's borders. These infrastructure are connected to free trade zones (FTZs) and special economic zones (SEZs) that have further improved regional connectivity, facilitating trade and attracting foreign investment while boosting Cambodia's economic growth and creating employment opportunities for its people.

The Belt and Road Initiative has also played a significant role in strengthening trade relations between China and Cambodia. With improved infrastructure and logistical capabilities and a new free trade agreement between the two countries, Cambodia has become an attractive destination for international investors and businesses looking to expand their presence in the region. The increased trade volume has resulted in a more diversified economy and helped Cambodia develop its energy, telecommunications, financial, logistics, tourism and agricultural sectors.

Besides, Chinese investments in Cambodia's agricultural sector have helped modernize farming and improve productivity, and have had a positive impact on Cambodia's agricultural exports, benefiting local farmers and boosting the country's processing and packaging sectors. In fact, Cambodia has become a key source of rice, fruits and vegetables for the Asian market.

Cambodia is rich in minerals, and the Belt and Road Initiative's infrastructure projects have helped increase mining and mineral processing activities. Large-scale projects such as mining and forestry require strict environmental controls and monitoring. And since its focus on sustainability and green development is guided by the United Nations 2030 Sustainable Development Goals, the initiative prioritizes stringent environmental regulations and monitoring mechanisms to ensure compliance to the SDGs when it comes to investments in mining, agriculture and forestry. The Belt and Road Initiative accords priority to renewable energy sources, too, and promotes biodiversity conservation efforts.

Keeping all these factors in mind, China's investment in energy infrastructure has helped alleviate Cambodia's power shortages and fostered sustainable development. The construction of hydropower plants, solar panel farms and power transmission networks has increased the country's energy production capacity, reducing dependence on costly imported energy sources, which in turn has improved power supply, spurring industrial growth and attracting foreign direct investment in energy-intensive sectors. Also, Chinese companies' investments in the electrification of the transport sector have widened the electricity charging network. As a result, Chinese-made electric vehicles have become a common sight on Cambodia's Belt and Road Initiative-funded highway networks.

One of the most significant outcomes of Belt and Road projects in Cambodia is the construction of the Sihanoukville Special Economic Zone, which has attracted foreign investments and boosted Cambodia's manufacturing sector, leading to job creation and increased exports. In partnership with investors in the Sihanoukville and Phnom Penh SEZs, Cambodia is now processing its rubber into car tires, and has become a leading exporter of other value-added products such as car parts and bicycles.

Investments in Cambodia under the Belt and Road framework have also stimulated the construction and real estate sectors, leading to the development of modern residential and commercial properties across the country. Despite slowing down during the COVID-19 pandemic, the construction sector remains a key employment generator, boosting incomes, improving living standards, reducing poverty and underpinning socioeconomic development.

The socio-cultural impact of the Belt and Road Initiative projects on Cambodia has also been profound, with significant changes evident in local communities. One notable change is the rapid urbanization and modernization of previously rural areas as the construction of roads has connected remote regions to major cities, facilitating the movement of goods and people. This has resulted in the emergence of new urban centers and the expansion of existing ones.

In the post-pandemic period, international and Chinese tourists in Cambodia are benefiting from improved transportation, hospitality infrastructure and globally integrated electronic payment systems. Thanks to the improvement in infrastructure connectivity, the country's rich cultural heritage and historical sites have become more accessible to both domestic and international tourists, with the influx of tourists generating significant revenue and providing new economic opportunities for local communities, which are working for, operating or have built hotels, restaurants and retail shops.

Moreover, cultural exchanges between China and Cambodia have increased as a result of the Belt and Road Initiative. With Chinese tourists, workers and investors bringing their traditions, language and customs to Cambodia, the integration of Chinese elements into Cambodian society has intensified. And many Cambodian students enjoy scholarships and increased access to universities and vocational training institutions in China through Belt and Road cultural and education networks. Such intercultural exchanges enrich cultural diversity.

In conclusion, the Belt and Road projects in Cambodia highlight the benefits of comprehensive planning, good and transparent governance, environmental protection, partnership building and robust monitoring mechanisms. To realize the full potential of the initiative, Cambodia and China should deepen win-win cooperation to jointly build a high-quality, high-level Cambodia-China community with a shared future.

Digby James Wren is a senior adviser, director of the Mekong Research Centre and founder of the Young Minds Education Program of the International Relations Institute, Royal Academy of Cambodia; and Seun Sam is a policy analyst with the Royal Academy of Cambodia.

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