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The Royal Government and its ministries have elaborated a multi-layered strategic approach designed to meet this challenge. The Rectangular Strategy Phase III and the Strategic Development Plan 2014-18 set out economy-wide development objectives and strategy. These are reinforced and elaborated by sectoral development plans and strategies, for example the Education Strategic Plan, 2014-18; The Financial Sector Development Strategy, 2011-20; the Agricultural Sector Strategic Development Plan, 2014-18; and, most recently, the Industrial Development Policy, 2015-25, which aims to transform Cambodia's industrial structure away from labour intensive activities and toward skill-driven activities. Individual products have also been earmarked for policy action: through its Trade Integration Strategy (CTIS) the Government has identified ten export sectors that will receive priority attention. These are garments; footwear; light manufacturing assembly in special economic zones (SEZ); processed food; fisheries products; milled rice; cassava; rubber; tourism; and high-value silk products. These, in turn, are the object of product strategies, for example the Policy Paper on the Promotion of Paddy Production and Rice Export; Strategic Planning Framework for Fisheries 2015-24; the Natural Rubber Development Strategy, 2011-20; and the Tourism Development Strategic Plan, 2012-20. For each of these products the CTIS focused, along with other key competitive issues, on opportunities for producers to move up value chains; opportunities to increase the volume of exports; opportunities to diversify target markets; opportunities to increase backward linkages through linkages to domestic producers (mostly small and medium enterprises); and socio-economic and environmental impacts.

The generation master plan drawn up by Cambodia's authorities envisages that in the period ahead peak generation in Phnom Penh will be assured by thermal units; small and medium sized diesel units will provide both base and peak loads in provincial towns and cities. The plan also envisages a major expansion of hydro power, initially through smaller size hydro units, and then through mid and larger size hydro projects. Five additional coal-fired plants are scheduled to come on stream during 2017-21, as well as one hydro generator. During 2021-25, thirteen different hydro projects will come on stream, as well as a major thermal unit.

Cambodia remains largely open to and encourages foreign direct investment (FDI) despite the prohibition of foreign ownership of land and involvement in some activities for health or environmental purposes, as well as local equity or workforce participation requirements, or prior authorization for certain activities (e.g. certain telecommunications services, radio and television broadcasting, and certain tourism services). (...)

Cambodia prohibits or restricts the import of certain goods on the grounds of: protection of national security; protection of public order and standards of decency and morality; protection of human, animal or plant life or health; protection of national treasures of artistic, historic or archaeological value; conservation of natural resources; compliance with the provisions of any legislation of the Kingdom of Cambodia; and the fulfilment of obligations under the UN Charter. Currently, over 1,500 tariff lines are subject to import prohibition or licensing. Prohibited imports include, inter alia: narcotics; psychotropic substances and their precursors, ODS (except HCFCs), toxic waste and poisonous chemicals, certain pesticides, used computers and spare parts, household waste, right-hand drive vehicles and goods that infringe intellectual property rights. Import licences or permits are required for chemicals, pharmaceuticals and narcotic drugs for medicinal purposes, forestry products, fish and fishery products, live animals, animal products and agricultural materials.

Despite a major decline due to irrigation and commodity price developments, agriculture, centred on paddy rice production, continues to play an important role in supporting economic growth (accounting for 25.7% of gross value added in 2016). Cambodia's agricultural price competitiveness remains lower than its regional neighbours. During the review period, several plans aimed to transform the sector into one driven by new technologies, mechanization and irrigation to improve the yield rate and diversify activities into high value crops, livestock, and aquaculture in an environmentally sustainable manner. Illegal trade of fisheries and forestry items persists.

(...) Forest and fishery management appears to be relatively inefficient. Despite a 1996 log export ban, the cross-border trade continues to grow. Fish and fishery products remain subject to relatively high tariff protection and import quotas; in 2014, the European Union enforced a ban on fish imports from Cambodia due to a perceived lack of action against illegal fishing.

(...) Phase III of the Rectangular Strategy reflects the Government's aim of promoting long-term sustainable national development and poverty reduction through focusing on: agriculture development (diversification, value added, and productivity); development of physical infrastructure; private sector development and employment; and capacity building and human resource development (see Section 2.3).

In this context, the authorities have stated that their focus would remain on public investments in roads, railways, bridges and irrigation to further promote rural development and enhance inclusive growth. They consider that public investment in these infrastructure projects will help facilitate private investment. Over the near term, the completion of several hydropower projects is expected to provide affordable electricity to the general population and contribute to enhancing Cambodia's business climate and competitiveness. (...)

(...) On 6 September 2016, ASEAN Leaders adopted the Master Plan on ASEAN Connectivity 2025 (MPAC 2025) which succeeded the Master Plan on ASEAN Connectivity 2010 and focuses on five strategic areas: sustainable infrastructure, digital innovation, seamless logistics, regulatory excellence and people mobility. (...)

All sectors other than those contained in the negative list of Sub-Decree No. 111 (2005) remain open to foreign investment and 100% foreign ownership is allowed; with regard to state owned enterprises, the Government must directly or indirectly hold more than 51% of the capital or the voting rights. The prohibited activities comprise: (...) production of poisonous chemicals, agricultural pesticides/insecticides and other goods by using chemical substances prohibited by international regulations or the World Health Organization that affect public health and the environment; processing and production of electrical power by using any waste imported from a foreign country; and, forestry exploitation business prohibited under the Forestry Law. (...)