Cabinet nod major reforms to strengthen economic resilience

Cabinet nod major reforms to strengthen economic resilience

The reforms package addresses both economic and social priorities amid heightened external challenges, an expert says.

The Cabinet of the Royal Government Friday approved a series of reforms to strengthen Cambodia’s economic resilience and deepen ASEAN integration, endorsing four draft laws and a national action plan designed to improve competitiveness, facilitate trade and support long-term growth.

Prime Minister Hun Manet chaired the Cabinet’s plenary meeting, which also reviewed the tourism sector’s performance amid a sharp decline in international arrivals, according to a press release from the Office of the Council of Ministers (OCM).

During the meeting, the Cabinet reviewed progress in implementing the ‘Visiting Cambodia in the Green Season 2026’ campaign after international tourist arrivals fell 47.8 percent year-on-year to 1.54 million during the first five months.

The decline was attributed to border tensions with Thailand, regional crackdowns on cyber scam operations and geopolitical instability in the Middle East that dampened global travel confidence.

Despite the slowdown, domestic tourism remained resilient, with more than 20.3 million trips recorded during the same period, up 54.2 percent year-on-year.

The Royal Government said that domestic tourism has become an important source of revenue for hotels, restaurants and tourism-related SMEs during the green season, while continuing efforts under the ‘Pentagonal Strategy–Phase One’ to diversify tourism products, accelerate digital transformation and upgrade workforce skills.

Beyond tourism, the Cabinet approved the ‘National Action Plan on the Prevention of Violence Against Women 2025-2030’, describing it as a measure to strengthen social protection while safeguarding the economic productivity, as women account for the majority of workers in Cambodia’s garment, footwear and travel goods industries.

The government noted that preventing gender-based violence would help reduce workplace absenteeism and employee turnove r while improving labour productivity and easing long-term social and healthcare costs.

The Cabinet also endorsed a draft law approving Cambodia’s accession to the ‘Convention on International Interests in Mobile Equipment’ and its protocol on Matters Specific to Aircraft Equipment, commonly known as the Cape Town Convention.

Joining the international treaty is expected to improve legal certainty for foreign aircraft financiers and leasing companies by protecting their interests in aircraft and aircraft engines under a recognised international legal framework.

According to OCM, the move would lower financing risks and enable Cambodian airlines to secure aircraft leases and financing at more competitive rates, supporting fleet expansion and the development of new international routes while strengthening the country’s aviation and logistics sectors.

The Cabinet also approved a draft law on the ‘ASEAN Framework Agreement on Mutual Recognition Arrangements’, which establishes common principles for recognising product testing, certification and conformity assessment procedures across the region.

Building on that effort, ministers approved a draft law adopting the ‘ASEAN Mutual Recognition Arrangement for Building and Construction Materials’, allowing construction materials certified in one ASEAN member state to be accepted in another without additional testing.

The Cabinet concluded its legislative agenda by approving a draft law adopting the ‘ASEAN Mutual Recognition Arrangement on Type Approvals for Automotive Products’, which is expected to facilitate regional trade in automotive parts and components by eliminating duplicate certification procedures.

Collectively, the Cabinet’s decisions reflected the government’s twin approach of addressing economic challenges—particularly in the tourism sector—while advancing longer-term reforms to strengthen Cambodia’s competitiveness.

Through regional trade harmonisation, improved aviation financing and stronger social protections, the government aimed to position the Kingdom for more sustainable and resilient growth.

Speaking to Khmer Times, Sam Seun, a policy analyst at the Royal Academy of Cambodia, welcomed the Cabinet’s approval of the reform package, saying it addressed both economic and social priorities amid heightened external challenges.

Seun said the National Action Plan on the Prevention of Violence Against Women would deliver long-term economic and social benefits, noting that women play a vital role in supporting families and form the backbone of Cambodia’s garment industry and many SMEs.

He said that violence within families can lead to separation and divorce, leaving children without adequate care and education. “These children are the country’s future. If they are denied the opportunity to go to school, they could become a social and economic burden rather than contributors to national development,” he said.

Seun also described the ASEAN Mutual Recognition Arrangement on Type Approvals for Automotive Products as one of the Cabinet’s most significant decisions, saying it would strengthen Cambodia’s position as an emerging automotive manufacturing hub.

“While the property and construction sectors are facing challenges, the automotive industry continues to expand, with more foreign companies investing in and establishing production facilities in Cambodia.”

He added that investment in the electric vehicle industry by Chinese, South Korean and Japanese companies present an opportunity to diversify Cambodia’s industrial base.

Seun urged the government to strengthen tax collection and public financial management to ensure the sector’s growth translates into sustainable public revenue.

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