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Middle Eastern investors are beginning to see Cambodia’s potential

Flags of Qatar, Kuwait and other Gulf nations flutter along the Tonlé Sap River in the middle of Cambodia’s capital, Phnom Penh. They line up alongside banners of dozens of other countries that line Preah Sisowath Quay, a few of them tattered and torn, clearly having seen higher days.

This corner of Southeast Asia has been largely ignored by the Middle East, but there are signs that that is starting to alter, with the Gulf’s major airlines leading the best way. Plans to spice up tourism in Cambodia have attracted the eye of Dubai-based airline Emirates, which announced last month that it will begin day by day flights between Dubai and Phnom Penh from July 1. It will join Qatar Airways, which has been flying to Phnom Penh since 2013.

Flags of dozens of nations line the Preah Sisowath Quay on the Tonlé Sap River in Phnom Penh, Cambodia, in early March 2017. Photo: Dominic Dudley

The Cambodian government has set a goal of attracting 8 million tourists by 2020, up from 5 million last 12 months. But while Cambodia may gain advantage from latest air links to the Gulf, the Middle East alone is unlikely to supply many latest tourists. Instead, a very powerful might be the one-stop connections that airlines provide to other countries in Europe and the Americas.

Tourists from the Middle East are likely to spend greater than most visitors to Cambodia, but their numbers are small, just 17,537 visitors in 2016, in line with the Ministry of Tourism. The largest source market is Israel, followed by Jordan; Gulf countries generate just a number of hundred tourists a 12 months.

Not surprisingly, residents of the foremost tourist town of Siem Reap—gateway to the UNESCO World Heritage site of Angkor Wat and its surrounding temples—say they see few Arab visitors. Instead, tourists from China predominate.

So far, Gulf involvement in Cambodia has often focused on aid, although there have been a number of trade agreements. In each areas, Kuwait has normally been probably the most lively Gulf country.

Kuwait Zakat House funded a $350,000 school for 400 students in contemporary Sharia studies in Phnom Penh, where construction began in March 2013. More recently, the Cambodia-Kuwait Friendship Hospital opened in Kandal Province in early 2016. The project was estimated to cost slightly below $1 million in March 2013, when construction officially began.

Tourists visit the Angkor Wat temple in Siem Reap on February 17, 2017. Photo: TANG CHHIN SOTHY/AFP/Getty Images
Tourists visit the Angkor Wat temple in Siem Reap on February 17, 2017. Photo: TANG CHHIN SOTHY/AFP/Getty Images

The Kuwait government also funded the development of the Kuwait Islamic Institute for Girls, which began in April 2016. The country also saw involvement from the Kuwait Fund for Arab Economic Development (KFAED), which funded feasibility studies for an irrigation project within the Stung Sen River basin.

In terms of trade engagement, Kuwait signed a series of agreements covering economic and technical cooperation, trade and investment with its Cambodian counterpart in 2008. Then in 2011, Kuwait’s Pima International formed a three way partnership with India’s D&D Pattnaik to take a position in gold and iron exploration in Cambodia. The two firms were to take a position $10-25 million in mineral exploration within the provinces of Kampong Chhnang, Kratie and Mondulkiri.

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