This policy possesses three important pillars, namely People, Prosperity, and Peace, while also containing three core elements ― people-to-people exchange, mutually beneficial economic cooperation and constructing a community that supports regional peace and security ― which link South Korea with Southeast Asia and India.
The Kingdom of Cambodia has seen the significant improvement of relations, investment and trade with South Korea resulting from the policy. Specifically, Cambodia and the Republic of Korea (ROK) are tied by the ASEAN-Korea Free Trade Agreement (AKFTA) under the Framework Agreement on Comprehensive Economic Cooperation, which was signed between the governments of the ASEAN member countries and the ROK in 2008. The two nations have also agreed to sign the Cambodia-South Korea Free Trade Agreement in October 2021.
In addition, investment and trade are at an all-time high, with the ROK's investment in the Kingdom of Cambodia having reached $5.7 billion in 2020, making the ROK the second highest foreign investor in the kingdom, with a huge proportion of the infrastructure development projects, while the trade volume between the two nations stood at almost $452 million in the first half of 2021.
However, the kingdom possesses two important challenges ― the lack of human resources and complicated and insufficient institutional processes ― that slow Cambodia from reaching its full potential.
With the rank of 92nd out of 130 countries in terms of human capital development, according to the Global Human Capital Report in 2017, Cambodia provides limited performance, education and training of its citizens for the development of a competitive workforce. Moreover, complicated administration processes can also undermine trade and investment in the kingdom.
Agricultural products ― rice and fish ― are still required to receive various permits, causing delays in meeting delivery dates on time, while other challenges, such as the lack of infrastructure, high electricity costs, internet access and telecommunications and transportation costs, also contribute to the setback.
Therefore, in order for Cambodia to overcome these crippling challenges, three important factors will provide the best head start for the kingdom.
Firstly, Cambodia needs to have a firm educational enhancement policy from the ground up to align with the international market economy. Pupils should be offered basic hands-on teaching in the primary education curriculum, while secondary education should focus on practical knowledge and skills in the sciences, as well as adding vocational and technical extracurricular training to the curriculum.
Higher education would also yield better long-term outcomes when it is organized with curricula that narrow the gaps between academic knowledge and practical skill-sets. Universities could complement these strategies by introducing and endorsing internship programs as part of the university curriculum.
In the short run, training in such areas as languages, interpersonal skills, industrial, vocational and technical skills must be promoted to meet investors' human resource capability standards, professionalism and the quality of the outcome.
Secondly, the improvement of the investment environment is another important policy direction. Doing so will include promoting anti-corruption mechanisms, strengthening formal institutional structures and good social security. Moreover, stronger protection of property rights and the promotion of technological development would incentivize innovators and entrepreneurs to cooperate and invest in the kingdom's research and development activities.
Thirdly, the stable political situation in Cambodia since the late 1990s has led to solidity, steady trust building, and the enhancement of Cambodia's partnerships with other countries, specifically with South Korea. Hence, it is important for the Kingdom to maintain domestic political stability ― in its upcoming commune election in 2022 and general election in 2023 ― so as to attain coherent and continuous development.
In conclusion, Korea's New Southern Policy spells tremendous benefits for both Cambodia and South Korea to deepen their relations. Although there are challenges that currently can slow down Cambodia from reaching her full potential, factors such as an increase in Cambodia's human resources capabilities, the improvement of the investment environment, and the maintaining of political stability will create favorable conditions for Korean investors and entrepreneurs to look to the Kingdom of Cambodia as a place for future cooperation.
Bunly Ek is a research fellow at the Cambodian Institute for Cooperation and Peace (CICP) in Cambodia, focusing on the relations between the Republic of Korea and Cambodia. The views expressed in the above article are the author's own and do not reflect the editorial direction of The Korea Times.