The SEC: Boosting Trade and Investment in Cambodia

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Improved infrastructure and connectivity

Improved infrastructure and connectivity

Stretching eastwards from Myanmar through Thailand and Cambodia to Vietnam, the Southern Economic Corridor (SEC) aims to further integrate the Association of Southeast Asian Nations (ASEAN) by improving connectivity and trade. In Cambodia, new clusters are growing around border towns and in existing industrial hubs along the route of the SEC. Foreign businesses are investing in Cambodia, benefiting from both the country’s cheap labor pool as well as the improved connectivity brought on by the SEC. 

SEC: a snapshot

The SEC is one of the many development projects initiated in the Greater Mekong Subregion (GMS). The GMS is a natural economic area loosely connected by the Mekong River – the 12th longest river in the world. The GMS spans an area of 2.6 million square kilometers and a total population of 339 million people, as of 2015. In 2015, trade within the GMS amounted to US$444 billion.

In partnership with the Asian Development Bank, the GMS Program for subregional cooperation was established in 1992 to facilitate economic cooperation and growth between Cambodia, China’s Yunnan Province and Guangxi Zhuang Autonomous Region, Laos, Myanmar, Thailand, and Vietnam.

The SEC’s principle route extends eastwards from Dawei (Myanmar) and passes through Bangkok (Thailand), Phnom Penh (Cambodia), and Ho Chi Minh City (Vietnam) before terminating at Vung Tau (Vietnam). Additional sub-routes bring improved connectivity between Cambodia and its neighbors:

  • With Laos through Dong Kralor
  • With Thailand through Poipet and Cham Yeam
  • With Vietnam through An Dong Pech, Bavet, and Kep.

Additionally, a SEC subroute connects Cambodia’s capital Phnom Penh with the country’s Sihanoukville Port.

The SEC (one of the three ongoing economic corridor projects in the region) will make it easier for both domestic and foreign businesses to do business and access markets along its route. 

Though still vulnerable to occasional adverse weather conditions, Cambodia’s highways now facilitate direct overland connectivity between Thailand and Vietnam. According to a 2014 study, freight travel from Bangkok to Phnom Penh through the SEC takes approximately 24 hours while passenger travel takes 11 and a half. Freight travel from Phnom Penh to Ho Chi Minh City takes roughly 14 hours whereas passenger travel takes 5 and a half.

The Phnom Penh aiport has already undergone upgrades, increasing its capacity to 5 million annual passengers. The airport at Sihanoukville – an important port city connected by a sub-route to the SEC– is currently undergoing upgrades to increase its capacity to 500,000 annual passengers.

The Neak Loeung Bridge (otherwise known as the Tsubasa Bridge) is the latest in improvement in connectivity with the SEC. Completed in April 2016 with development assistance from Japan, the Neak Loeung Bridge spans the Mekong River,connecting Cambodia’s Kandal and Prey Veng provinces while drastically improving the ease of traveling from Phnom Penh to Ho Chi Minh City.

Read full article at ASEAN Briefing: http://www.aseanbriefing.com/news/2017/08/11/southern-economic-corridor-boosting-trade-investment-cambodia.html

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