Why NZ should have more of a stake in Cambodia (2025)

Why should New Zealand care about Cambodia?

In the September 2024 quarter, New Zealand exported just US$12.86 million of total goods and services to Cambodia and imported goods worth US$23.69m. Despite the small numbers, there is great potential for more Kiwi investment in Cambodia.

The kingdom has a young, tech-savvy population, with about 65 percent of its 16.5 million people under the age of 30. The Cambodian economy is one of the fastest-growing economies in the Southeast Asian region, with its gross domestic product expected to grow at 6 percent in 2025.

Investing in Cambodia means gaining access to regional markets via regional trade agreements such as the ASEAN-Australia-New Zealand Free Trade Agreement and the Regional Comprehensive Economic Partnership. Most of all, Cambodians are keen on premium products from New Zealand, such as health supplements, fruit, dairy, and meat.

Cambodia’s current young leadership is also keen to diversify their foreign policy and wants to develop closer ties with New Zealand. Unlike their predecessors, these young leaders are open to conversation, and New Zealand has a real opportunity to join other middle powers, such as Australia, Japan, India, and South Korea, to help Cambodia reduce its geopolitical tension.

Caught up between China and America, Cambodia has been navigating these superpowers to support its growth. China is Cambodia’s top investor and donor while America is its top export market, particularly for textile products. The speculation about a Chinese naval base in Cambodia has been a hot issue that has caused this tension.

Last week, Cambodia inaugurated the Ream naval base, which has been renovated and modernised with Chinese aid. But the assurance from the Cambodian Prime Minister that this base is not exclusively for China and is also open to other countries manifests Cambodia’s foreign policy diversification. Despite its human rights and democratic issues, Cambodia has held regular elections and allowed some dissident albeit under tight control. Yet, to attract more friends like New Zealand, Cambodia needs to open more civic and democratic spaces while being close to China.

New Zealand can improve its relations with Cambodia and nurture the economic ‘green shoots’ already evident by building on the good work already underway. During 2021-2024, New Zealand delivered about US$19.4 million in development assistance to Cambodia, targeting agriculture, renewable energy, governance, education, and landmine clearance. Every year, the Ministry of Foreign Affairs and Trade offers 35 post-graduate and 23 short-term scholarships as well as English language training to 33 Cambodian officials in New Zealand and 25 trainees in Cambodia.

New Zealand is one of the English-speaking countries where Cambodian students prefer to receive tertiary education. In 2024, there were 60 scholarship students studying in New Zealand, compared to 276 fee-paying students and 174 dependent students. Cambodia can make the case that an increased number of scholarships helps groom future leaders and is a valuable investment in human capital.

Second, New Zealand’s development approach to Cambodia could be more people-centric, promoting more people-to-people exchange. A ‘Young Leaders Programme’, which is supported by the foreign affairs and trade ministry and managed by UnionAid, is a good example. In this programme, current and emerging leaders of civil society organisations (such as NGOs, social enterprises, and community organisations) come to learn and exchange information in New Zealand for three months. They not only learn in an academic setting but also have hands-on exchange on various issues with Kiwi change-makers.

Third is the question of where New Zealand aid should place its emphasis. Working with grassroots initiatives and directly with community organisations helps distinguish New Zealand from other major donors who emphasise government engagement. This community-focused approach would better meet local needs and would foster grassroots ‘green shoots’ in an inclusive and sustainable way. There is a small number of Kiwi NGOs, such as the Cambodia Charitable Trust, already doing great work with local communities, and this direct approach is to be encouraged, especially given the USAID’s withdrawal from Cambodia (and other countries).

Cambodia has a dire need to embrace more friendly partners like New Zealand amid an increasingly uncertain geopolitical situation. It is the perfect time for New Zealand to engage with Cambodia in a more proactive way, taking advantage of its openness for diversification and its hunger for ‘change’ and capitalising on the good Kiwi image in Cambodia. Yet, while government-to-government relations are crucial, it is the peoples who enhance and sustain these relations. New Zealand can definitely play a better role supporting the emerging ‘green shoots’ with an increasingly ‘people-centred’ approach.