Cambodia’s property sector could be in for a shakeup if the European Union fulfills its threat to withdraw Everything But Arms (EBA) trade perks from the kingdom, market observers tell the Khmer Times.
The EU’s mooted sanctions on Cambodia will rattle the economy but ultimately lead to positive change, according to James Whitehead, CEO of Lao property portal laorealestate.la.
The sanctions would compel Cambodia to trade low-skilled labour, based on the manufacture of garments and low-level consumer products for the European market, for more lucrative manufacturing jobs that need highly trained, more educated workers.
These jobs may involve electronics manufacturing and diamond polishing, Whitehead added.
“[The sector] needs to boost the value chain and train staff for higher-level manufacturing,” Whitehead told the Times.
The EU calls on Prime Minister Hun Sen to rectify the breakdown of democratic processes in the country since last year’s abolition of the Cambodia National Rescue Party (CNRP). “The clock is now officially tickingand we need to see real action soon,” EU Commissioner for Trade Cecilia Malmstrom said in a statement last month.
The EBA empowers Cambodia to export products aside from weapons to the EU at duty-free tariff rates. The end of the pact could cost Cambodia’s economy around USD676 million, according to estimates by the ministry of commerce, and hit the garment industry, which employs 800,000 people.
“Workers rent houses and their landlords have mortgages with the banks. If there are no workers then landlords end up losing business,” warned economist Ngeth Chou.
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