Cambodia - Q1 2013
BMI View: Rampant corruption will continue to be one of the key factors hindering the development of the pharmaceutical and healthcare sectors in Cambodia. In addition, improving conditions in neighbouring countries such as Vietnam and Thailand mean Cambodia will be seen as relatively unattractive to investors, which does not help in the advancement of these sectors.
Headline Expenditure Projections
Pharmaceuticals: KHR651.8bn (US$161mn) in 2011 to KHR723.3bn (US$173mn) in 2012; +11% in local currency terms and +7.7% in US dollar terms. Growth forecast downgraded due to lower than expected pharmaceutical trade imports.
Healthcare: KHR2,982bn (US$737mn) in 2011 to KHR3,312bn (US$794mn) in 2012; +11.1% in local currency terms and +7.8% in US dollar terms. Forecast unchanged from Q412.
Medical Devices: KHR107.5bn (US$27mn) in 2011 to KHR118.1bn (US$28mn) in 2011; +9.8% in local currency terms and +6.6% in US dollar terms. Forecast unchanged from Q412.
Risk/Reward Rating: Cambodia continues to rank last out of the 18 key markets in BMI's Q113 Asia Pacific Pharmaceutical Risk/Reward Ratings due to its lack of commitment to healthcare and perceived corruption in the country. It has a score of 33.5, significantly lower than the region's average of 53.4.
Key Trends And Developments
In November 2012, a report issued by the National Center for Parasitology, Entomology and Malaria Control stated that d engue fever accounted for 170 child deaths in Cambodia in 10M12, up 154% from 67 fatalities in 10M11. Cambodia registered 39,290 dengue fever cases from January-October 2012, a 163% year-on-year increase up from 14,918 cases.
In the same month, the UN-backed Global Fund to fight AIDS, tuberculosis and malaria accused Cambodia of 'serious' corruption in the use of funds intended to combat these diseases. Cambodia Health Minister Mam Bunheng stated that he had no knowledge of the corruption claims.
In October 2012, the World Health Organization stated that the country has had significant success in the fight against tuberculosis (TB) in the last decade due to new universal care access to patients at primary health centres. The country, which has halved the number of new TB cases in the last decade, had one of the highest TB rates in the world 20 years ago. A survey in 2011 found TB prevalence declined from more than 1,500 cases per 100,000 people in 2002 to 820 in 2011, a reduction in prevalence of 40%. The country was able to achieve success due to the implementation of the WHO-recommended directly observed therapy, short course.
BMI Economic View: We expect foreign investment into Cambodia to help the country achieve rapid real GDP growth averaging 6.6% over the next five years. Chinese investment in infrastructure, spurred on by the close relationship between the Cambodian and Chinese governments, and Japanese investment in the manufacturing sector, are two areas of major growth potential.
BMI Political View: In a bid to strengthen the chances of challenging the government at the 2013 elections, Sam Rainsy, formerly of the Sam Rainsy Party (SRP) will join forces with the Human Rights Party (HRP) to lead the new Cambodian National Rescue Party (CNRP). However, the odds remain stacked against CNRP as Rainsy is barred from running. We believe that the CPP is almost certain to maintain its dominance at the 2013 elections, and we note that this is positive for the country's business environment in the near term but poses risks of further social unrest over the medium term.