The Cambodian government is prioritizing the diversification of its industrial sector by transitioning from labour-intensive industries to knowledge-based and high-tech industries. With a 15.7 percent export growth in 2024, the government is positioning Cambodia as a regional production hub.

The economy is projected to achieve a growth rate of approximately 6 percent of GDP in 2024 and around 6.3 percent in 2025, as outlined in the medium-term public finance framework. The industrial sector remains a key driver, contributing about 8.5 percent to economic growth in 2024 and is projected to expand by approximately 8.6 percent in 2025.

Speaking at the closing ceremony of the Annual Review 2024 and 2025 Planning Conference of the Ministry of Industry, Science, Technology & Innovation (MISTI) on Wednesday, Permanent Deputy Prime Minister Vongsey Vissoth, who also serves as the Minister in Charge of the Office of the Council of Ministers, highlighted Cambodia’s increasing economic diversification over the past decade.

He noted that the Kingdom has established more trading partnerships and attracted increasing investments in high-value sectors beyond the garment industry, such as electronic component manufacturing and automobile assembly. As a result, both garment and non-garment manufacturing have become the largest contributors to the country’s economic growth.

“Exports in 2024 grew by 15.7 percent and more Cambodian products are entering regional and international markets,” he said. “In the medium and long-term development process, Cambodia must strengthen and accelerate the development of its industrial sector and adapt and diversify the economic structure and base that have supported growth for more than two decades to suit the current socio-economic situation, so that it can continue to sustain high growth in the long term and become more resilient.”

For full article, please read here

Source: Khmer Times 

The Brunei Economic Development Board (BEDB) and Tipolis Pte Ltd, a Singapore-based developer of next-generation special economic zones, have signed an agreement on February 25, 2025 to assess the feasibility of a potential joint project in Brunei.

The agreement initiates the specific feasibility study and contract negotiations, aligning with Brunei’s diversification efforts under its national vision Wawasan 2035.

The signing ceremony took place at the main auditorium of the Design and Technology building in Anggerek Desa. 

Source: Biz Brunei

Read the full article here

A digital payments system and a power grid cutting across all members of the Association of Southeast Asian Nations (ASEAN) - Singapore's foreign affairs minister has singled these out as key in forging closer links among the regional bloc.

ASEAN states are cognisant that doubling down on such integration efforts - which were discussed during a meeting over the weekend - is becoming increasingly important as big power rivalry and other geopolitical risks deepen, potentially intensifying external economic pressures, added Dr Vivian Balakrishnan on Sunday (Jan 19). 

"ASEAN cannot control the agendas of the superpowers, or indeed the larger world, but we can and should focus on integrating ourselves, strengthening our economies, our connectivity," said Dr Balakrishnan, who was speaking to Singapore journalists on the sidelines of the ASEAN Foreign Ministers’ Retreat in Langkawi from Jan 18 to Jan 19.

A hot war between Russia and Ukraine is stretching into its third year. The conflict between Israel and Hamas also continues, with a ceasefire deal delayed at the 11th hour.

Meanwhile, Donald Trump is on the eve of re-entering the White House, potentially intensifying an already heightened Sino-US rivalry. The businessman-turned-politician has dangled sweeping tariffs on all imported goods while also spouting undiplomatic talk of possibly reclaiming the Panama Canal and acquiring Greenland.

The ASEAN Foreign Ministers’ Retreat is the first high-level meeting hosted by Malaysia as the 2025 ASEAN Chair, under the theme “Inclusivity and Sustainability”. The two-day retreat was held at the Langkawi International Convention Centre.

DEEPENING ASEAN INTEGRATION

Dr Balakrishnan stressed that the retreat was an opportunity for ASEAN to prove that it has a “collective approach to getting things done” and cited its efforts to integrate digital payment systems as an example of the bloc's integration and potential. 

Under Project Nexus, Singapore, Malaysia, Thailand, the Philippines and India have a collaboration between their central banks to create a global network for instant cross-border payments.

This is by linking their digital payment systems - Singapore’s PayNow, Malaysia’s DuitNow, Thailand’s PromptPay, the Philippines’ InstaPay and India’s Unified Payments Interface (UPI).

“In fact, ASEAN is taking the lead and our pioneering work in linking our payment systems to Thailand, Malaysia to India, Indonesia is also watching the space very closely. (This) Is another example of how ASEAN integration can often be a nucleus and working prototype of the future,” said Dr Balakrishnan. 

Under the wider digital economy, ASEAN is looking to realise a bloc-wide pact, the Digital Economy Framework Agreement (DEFA).

Malaysia, as the 2025 ASEAN chair, has called on member states to reinforce their commitment to finalising the negotiation of DEFA by the end of 2025. 

DEFA has been touted as the world’s first regional digital economy arrangement. 

It aims to accelerate ASEAN’s transformation into a leading digital economy, fostering greater cooperation and paving the way for greater digital integration as well as inclusive growth and development.

ASEAN is the world’s fastest-growing Internet market, with around 125,000 new users coming on every day, according to the World Economic Forum. The bloc’s digital economy is projected to triple from around US$300 billion to almost US$1 trillion by 2030, according to Boston Consulting Group.

POWERING UP A REGIONAL GRID

Additionally, Dr Balakrishnan outlined that member countries also made progress in negotiations to establish an ASEAN power grid. 

The bloc is discussing developing the current network into a completely integrated Southeast Asia power grid system to enable energy sharing and enhance cross-border electricity trade.

“We all have a collective commitment to make the system for the electrical grid more stable, more cost-effective, and more green. And we know that in designing these systems, the more you can raft different systems together, carefully and in a structured way, the better,” he said. 

Dr Balakrishnan added that this is an example of a long-term project which represents an opportunity for the bloc to prove that it can take a collective approach in getting things done and requires the members to have reliable “regulatory regimes” and good “diplomatic ties”. 

“That's why I view this as an important project. I view this as an important icon of ASEAN integration and of ASEAN potential for the future,” he said. 

At the 2024 ASEAN Summit in Laos, Singapore Prime Minister Lawrence Wong said that in order to achieve the planned ASEAN power grid, member countries needed to establish clear regulatory and commercial frameworks for cross-border energy trade. 

Mr Wong added that as ASEAN works towards creating a framework for subsea power cable development by the end of 2025, it can take reference from the existing regional one for fibre-optic cables which is already in place.

The bloc should also leverage interest from the World Bank, Asian Development Bank and other external partners, to bring in financing for the regional power grid, which he called a “critical project”.

ASEAN WILL MAKE “NECESSARY ADJUSTMENTS” TO TRUMP’S POLICIES

Speaking with Singaporean journalists, Dr Balakrishnan also spoke about ASEAN’s approach to external pressures amid global geopolitical tensions, stressing that the bloc must engage “all major powers in an omnidirectional principle”. 

“A deliberate and careful way - careful so that we don't become ensnared and tangled in superpower contestation, but at the same time, we maximise our strategic latitude, our right to choose our own destinies, and to do so by making common cause by adherence to long-held principles which lead to fairer and equitable and constructive outcomes for all of us,” he explained.  

Ahead of Trump’s inauguration and the prospect of more protectionist policies from the world’s biggest economy, Dr Balakrishnan was also asked if ASEAN was ready to deal with this shift in one of its key partners. 

“You first have to ask yourself why America is apparently changing direction, and … it's got to do with their own domestic sense of opportunity, of fairness and preparedness for the future,” responded Dr Balakrishnan.

The Singapore foreign affairs minister added that the US has to “sort out its own domestic political policy arrangements” in order for it to have the confidence to deal with the rest of the world.  

“So we should not get into a labelling or pejorative exercise. President Trump will be inaugurated tomorrow (Jan 20). We look forward to his inauguration, and to the policies, and we will have to make the necessary adjustments even as he makes changes to his policies,” he added.

During his first term in office, Trump imposed heavy tariffs on Chinese goods, prompting a trade war. China is a key trading partner for many Southeast Asian nations.

Trump has indicated plans to impose 10 per cent to 20 per cent tariffs on all imported goods upon re-entering the Oval Office, with the rate upwards of 60 per cent on goods from China.

Analysts have warned that Trump making good on his tariff threats would not just hurt American consumers and businesses, but also roil the international economy as other countries retaliate. The US is ASEAN’s second-largest trade partner, after China.

Source: Channel News Asia (Link Here)

The Thai government wants a free trade pact with the EU by the end of the year to better compete with rivals.

The EU is a vital market for Thailand, as the 27 member countries have significant purchasing power, making it the world's second-largest economic bloc. The EU ranks as Thailand's fourth-largest trading partner after China, the US and Japan. Thai exports to the EU tallied $24.2 billion, while imports from the EU totalled copy9.3 billion, resulting in a trade surplus of $4.88 billion.

What are the opportunities for Thai businesses with an Eu pact?

The DTN said an EU-Thailand FTA will enhance trade and investment opportunities by reducing or eliminating trade and investment barriers, including tariff and non-tariff measures. The pact is expected to stimulate foreign investment and foster growth in key sectors where Thailand excels, such as wholesale and retail, food production and tourism, noted the department.

Key export products likely to benefit from the FTA include agricultural and processed products (such as rice and canned pineapples), seafood (shrimp and squid), electronics (computers and circuit boards), and industrial goods (automobiles, motorcycles and components), noted the DTN.

However, the department cautioned that certain Thai industries must prepare for increased competition from EU imports, such as machinery and equipment, chemicals, dairy products, financial and insurance services, telecom, environmental services, and professional services. To compete effectively, Thai exporters will need to enhance their standards to align with EU regulations, which highlight safety, environmental sustainability, labour rights and energy efficiency.

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High-flying local start-ups valued at over US$1 billion (S$1.3 billion) – known as unicorns in the financial world – are seeking growth opportunities amid challenges on several fronts.

Bosses told The Straits Times that their companies are expanding into overseas markets despite difficulties securing funding, regulatory hurdles and layoffs. Some are also weighing a share market listing, but they declined to specify a timing and location. 

Mr Aaron Tan, co-founder and chief executive of used-car market Carro, said his company faced its “most difficult times” during the pandemic, just before it achieved unicorn status following a US$360 million capital injection from Temasek and Japan’s SoftBank Group in 2021.

“It was impossible to raise funds and we didn’t want to cut any headcount, which was super tough, given that sales had gone to zero,” he said. 

“We came together to re-strategise quickly, management took pay cuts and looked into alternative revenue sources. The net result was that we continued to grow despite Covid-19.”

Carro has expanded its services to Japan and Hong Kong since hitting unicorn status, offering consumers and dealers the ability to buy and sell vehicles, along with insurance and financing options. 

The firm is adding staff in these markets but has no concrete plans for expansion or hiring in Singapore at the moment. But it is recruiting artificial intelligence (AI) talent “globally” as the firm intends to boost AI usage in its operations, said Mr Tan. 

He declined to reveal Carro’s valuation but said that it has never decreased, and is now “well over US$1 billion”. 

Mr Tan said the company has been “ready from an accounting standpoint” for a share market listing and has hired more staff to prepare for it. 

“Depending on the market conditions and what the funding environment is like, we will then pick the exchange to list the company,” he added, noting that any decision has to maximise shareholder interest.

Mr Gerald Goh, co-founder and Asia-Pacific chief executive of digital asset banking group Sygnum, said his firm has had to navigate regulatory hurdles, such as securing licences to operate as a regulated financial services provider for digital assets in both Singapore and Switzerland.  

“It was a humbling process as we were pioneers in the industry and had to figure out how to apply the necessary regulatory guardrails and standard of care that clients in these jurisdictions expected,” he added. 

Sygnum obtained a capital markets services licence in 2019 and a major payments institution licence in 2023, both from the Monetary Authority of Singapore. 

Raising capital was another issue, as the start-up had to rely on more “traditional” investors, many of whom were sceptical about cryptocurrencies, Mr Goh said. 

Sygnum reached unicorn status in January following a US$58 million fund raising led by Fulgur Ventures. Mr Goh said the funds will be used to drive the company’s entry in Europe, and launch operations in Hong Kong.

Mr Goh did not elaborate when asked if Sygnum had plans to list, but noted that it was important to take advantage of emerging developments, especially in the US. 

Mr J.J. Ang, chief financial officer of home-grown online marketplace Carousell, said the company remains well-capitalised despite a tough funding environment and a 7 per cent headcount reduction in December 2024.

Carousell earned its unicorn label in 2021 after a US$100 million injection of funds from Korean private equity firm STIC.

Mr Ang did not rule out a share market listing, noting that the company is considering various “strategic exit options”. 

“With a strong presence across seven key markets in South-east Asia, we are well-positioned to navigate the next phase of our journey,” he added.

Singapore produced 31 of South-east Asia’s 55 unicorns, noted an October 2024 report by business network Founders Forum Group and the Economic Development Board.

But a prolonged funding winter has gripped the global start-up ecosystem since 2021, as persistent high interest rates and geopolitical uncertainty drove investors towards safer assets.

A November report by Enterprise Singapore and research firm PitchBook said companies based here raised US$4.05 billion across 369 deals in the nine months ending September 2024, well under the US$8.2 billion raised from 486 deals in the same period in 2021.

Observers warn that local unicorns may face more challenges in the short term, but there are still growth opportunities in Singapore, as well as in key markets like the US or China.

Mr Junxu Lye, founder and chief executive of fintech start-up Acme Technology, noted that Singapore’s unicorns emerged during what was arguably South-east Asia’s first major tech boom from 2015 to 2021, raising money at high valuations. 

But funding has dried up since 2021, and these companies have been forced to prioritise cashflow and profitability, thereby hampering their growth. 

“This does not bode well for their billion-dollar valuations as the only way they can justify their unicorn status is growth, and not profits – their revenue is not at the scale where they are able to extract substantial profits,” Mr Lye said. 

“In the near future, we should expect to see some correction in the form of smaller funding rounds and valuation cuts.” 

Mr Lye added that Singapore’s status as a major financial services hub benefits early-stage fintech start-ups but companies looking to scale further have limited liquidity options beyond traditional venture-capital firms.  

“Going public in the region is challenging because stock exchanges here have strict profitability requirements, and merger and acquisition activity is weak,” he said.  

Mr Lye said some firms may need to chance their arm in the giant US market if they want to prosper.

“If you are a business-to-business (B2B) company, the answer is more likely yes,” he noted. 

“The world’s leading B2B unicorns still generate more than 50 per cent of their revenue – and likely over 80 per cent of their profits – from the US.”

Mr Zen Chin, vice-chairman of SGTech’s Singapore Enterprise Chapter, said Singapore’s start-ups need to consider globalisation or regionalisation, and this means breaking into larger markets.

“Although many US or international venture-capital firms are headquartered in Singapore, the local and other South-east Asian markets have their limitations due to market size,” he added.

“But locations like the US, Europe and China have huge domestic markets which naturally increase the chances of a local start-up achieving unicorn status. More importantly, these markets also provide sufficient exit opportunities for venture-capital firms to make a return on their investments.” 

Ms Emily Liew, assistant managing director for innovation at Enterprise Singapore, said start-ups here need to go global to grow: “Identifying the right market to go into in the first place can make a key difference in harnessing the boost for growth.” 

Source: The Straits Times (Link HERE)

OCBC’S total sustainable financing for small and medium-sized enterprises (SMEs) grew by more than 40 per cent year on year, surpassing S$9 billion in 2024, up from more than S$7 billion in 2023.

As at Dec 31, 2024, the bank provided nearly 4,000 SMEs across Singapore and the region with sustainable financing – more than trebling from around 1,200 SME customers in 2023.

The sharp increase in such customers – and a corresponding decline in average loan sizes – reflects a push towards financing smaller SMEs, OCBC head of global commercial banking Linus Goh told reporters at a briefing on Tuesday (Feb 11).

Having built sustainable financing relationships with mid-to-large firms over the years, the bank has been able to “move within the value chain” to finance smaller players that supply to or work with these larger companies.

For smaller SMEs, loan sizes typically range from S$1 million to S$2 million, while mid-sized firms generally borrow between S$3 million and S$10 million, he said.

In 2024, OCBC extended sustainability-linked loans (SLLs) to more than 110 SMEs, more than quadrupling from the previous year.

Singapore-based SMEs accounted for about 80 per cent of these loans, with the remainder distributed across Malaysia, Hong Kong and Indonesia. The top three sectors were manufacturing, services and construction.

Unlike other forms of sustainable financing, SLLs require borrowers to meet sustainability performance targets at various stages of the loan.

To encourage more SMEs to take up SLLs, OCBC has partnered Enterprise Singapore (EnterpriseSG) to launch an initiative that provides funding support for SMEs to adopt carbon measurement tools and obtain environmental, social and governance (ESG) ratings.

Under the OCBC SME Start-ESG Programme, EnterpriseSG will fund up to 70 per cent of eligible costs for annual sustainability assessments over a three-year period.

To assess the sustainability performance of participating SMEs, OCBC has partnered sustainability platform EcoVadis and carbon management solution provider ESGpedia.

The bank expects 300 SMEs to participate in the programme over the next three years, with plans to eventually extend SLLs to these businesses.

On Tuesday, Goh also provided an update on the OCBC Women Unlimited programme, which was launched in April 2024 to support SMEs led by female entrepreneurs.

As at Dec 31, 2024, the bank had extended around S$50 million in loans to nearly 300 women-owned businesses.

Source: The Business Times (Link HERE)

EVEN as small and medium-sized enterprises (SMEs) grapple with rising business costs, they must continue to position themselves for long-term growth by expanding overseas and investing in upskilling, said Koh Kar Siong, DBS’ managing director and group head for corporate and SME banking.

The Covid-19 pandemic previously pushed many enterprises to strengthen their foundations, especially in digitally transforming their operations, he told The Business Times in an interview ahead of Budget 2025.

But SMEs are facing a new set of pressing challenges today, he pointed out, adding that the business environment has become increasingly uncertain amid global leadership changes and geopolitical tensions.

More businesses are also struggling to manage the rising costs of goods due to supply chain disruptions, and will have to either absorb these costs or pass them on to their customers.

SMEs must therefore re-evaluate their business models to ensure they remain resilient and relevant for the future, said Koh.

“Businesses can ask themselves: ‘Is there anything else we can do to make ourselves stronger and better, so as to tackle any other changes, disruptions and uncertainties that come along?’”

Managing costs, going global, upskilling

This current state of play has informed Koh’s personal wish list for Budget 2025; he hopes to see the government help SMEs to address immediate challenges and to position them for “long-term strategic play”.

First on his wish list is an extension of the corporate income tax rebate introduced in Budget 2024, as well as a higher cap. This will provide SMEs some short-term relief in battling rising costs, he noted.

Last year, companies were granted a rebate of 50 per cent of tax payable – capped at S$40,000 – for the year of assessment 2024, under the S$1.3 billion Enterprise Support Package rolled out for businesses.

Second, he is suggesting that more funding be handed out to support enterprises’ internationalisation efforts.

This includes increasing the quantum of the Market Readiness Grant (MRA), which helps SMEs to defray up to half of their eligible costs. The grant is currently capped at S$100,000 a company, for business activities related to overseas market promotion, business development and set-up.

Koh urged SMEs to set their sights abroad, given the limited size of Singapore’s domestic market.

He noted that regional markets such as Indonesia, Vietnam and India hold plenty of opportunities for SMEs to capture, particularly in the logistics, technology and renewable-energy sectors.

The upcoming Johor-Singapore Special Economic Zone will also pave the way for Singapore and Malaysia to capitalise on their complementary strengths and create cross-border business opportunities for their home-grown enterprises, he said.

For one, Singapore SMEs can tap Johor’s abundant land resources, raw materials and lower operating costs, while contributing skilled talent and know-how to the market. He added that Budget 2025 could also give a broad indication of possible tax incentives SMEs can expect for the zone.

Third, human capital development must go hand-in-hand with the reinvention of business models, said Koh.

“To reinvent your business model, you need to ensure that your workforce is ready for the change,” he said. “You will need the right people to help you carry through with the transformation.”

He noted that many SMEs continue to be bogged down by short-term cost challenges and are caught between tending to present survival and planning for the future.

Some business owners are concerned about productivity dropping in the short-term if they send employees for training, he said. And after these workers have upgraded their skills, the bosses worry about them being poached by their competitors.

“There’s always this fear, but you need to start somewhere,” he said. “For a company that has achieved sustainable growth and a strong culture, there’s no reason why staff would leave; instead, they will want to stay on and grow with you.”

He calls for a mindset shift: SMEs need to see upskilling and reskilling as long-term investments to help their workers to stay relevant, especially amid technological disruptions such as generative artificial intelligence (AI).

On that note, he hopes Budget 2025 will extend the validity of the SkillsFuture Enterprise Credit (SFEC) and Senior Employment Credit (SEC) beyond 2025. These schemes are set to expire by end-June and end-December, respectively.

Under the SFEC scheme, eligible employers receive a one-off S$10,000 credit to cover up to 90 per cent of out-of-pocket expenses on enterprise or workforce transformation initiatives.

The SEC provides wage offsets to employers who hire and retain Singaporean employees aged 60 and above and who earn up to S$4,000 a month.

Private sector needs to play a role

Koh acknowledged that the government cannot be expected to shoulder all the responsibility of supporting SMEs; the private sector also has a role to play in helping SMEs make sense of the available government grants and existing initiatives out there, he said.

Unlike large corporations, SMEs need more hand-holding and “a nudge” to get moving. Many lack the resources to navigate the landscape of grants and schemes on their own, as they run manpower-lean operations and are tied up with managing day-to-day operations.

Fostering more public-private partnerships can help in this area, said Koh. For instance, SMEs can stand to benefit from structured and hands-on programmes, especially in emerging areas such as sustainability and AI.

Last year, DBS partnered Enterprise Singapore (EnterpriseSG) to launch the ESG Ready Programme, which offers practical guidance and tools to help companies build sustainability into their business models.

Response so far has been encouraging, noted Koh. Over 250 SMEs from a range of sectors – including construction, manufacturing and wholesale and retail – have registered for the ESG Ready programme since its launch in April 2024.

More recently, the bank worked with EnterpriseSG and the Infocomm Media Development Authority to roll out the Spark GenAI programme in November 2024.

The programme aims to foster AI adoption among SMEs by teaching them potential use cases of GenAI, and how to incorporate such solutions into their business operations. It will also facilitate access to government grant support in adopting these solutions.

Said Koh: “More can be done to encourage other large private-sector players to step up to support SMEs. We have a role to play, and we hope that we can contribute to the ecosystem.”

Source: The Business Times (Link HERE)