Chakara Sisowath has been managing investments in Asia for the past 30 years. He is currently a partner with Hong Kong-based Jayu Ltd., a portfolio company with global investments in equities, venture capital and real estate. Chakara graduated from EDHEC business school in Lille, France. He also holds an MBA from the University of Chicago Booth School of Business.
Phnom Penh is hosting the 2017 regional meeting of the World Economic Forum, commonly known as “Davos” after the Swiss town where the main gathering takes place annually. The participants, handpicked political figures, corporate chieftains and tech visionaries, will have a full agenda. Indeed, the theme of the meeting is “Youth, Technology and Growth: Securing ASEAN’s Digital and Demographic Dividends”. This meeting of minds will ask: Where is Cambodia positioned in this perspective? Where does it stand out from its neighbours, and in what aspects does it need to catch up?
According to the paper, “Economic Growth and Social Inclusion in ASEAN”, Cambodia’s performance is mixed. In the technology area, as shown by Internet access, for example, Cambodia is lagging.
While progress was made between 2004 and 2014, with the rate of Internet usage jumping from zero to 10% in Cambodia, all of its neighbours – save Myanmar – did even better.
How about economic growth? In the long run, the two main engines are demography and productivity. With a young and growing population, Cambodia potentially has a serious asset. In 2014, old age dependency (the proportion of people aged 65 and over to the population aged between 15 and 64) was the lowest in the ASEAN. This is encouraging since an elderly population tends to be less dynamic and puts pressure on the healthcare and pension systems. Conversely, a young population is more entrepreneurial and more likely to take risks, which is the essence of business activity.
However, a young and growing population is not a fail safe condition for an economic takeoff. Several countries in Africa could attest to that. With respect to productivity, investments, education, infrastructure and the quality of institutions are key elements that can swing the balance either way. Interestingly, a recent WEF paper, “Can Southeast Asia sustain its rapid rate of urbanisation?”, notes a meaningful correlation between productivity and urbanisation. This can be seen in the masses of subsistence farmers and labourers who move from the countryside to the cities in search of work in industry and services where productivity is generally higher.
As such, one would expect Cambodia’s future economic development to follow its increasing level of urbanisation, which will present its own set of challenges, particularly in the fields of infrastructure, energy and healthcare. As pointed out by the WEF paper, the costs of sustaining population growth and urbanization are gigantic, in Cambodia and the rest of the region.
To meet all these challenges, all matters of contribution – financial and technological – will be required. In addition, this meeting of fertile minds in Phnom Penh over the next few days is the perfect opportunity to develop further creative solutions and innovative models.