Given the small pharmaceutical market size coupled with the low per-capita pharmaceutical and healthcare spending, it is unlikely that Cambodia will present much opportunities over the medium term, although inexpensive generic drug players from countries such as India and Pakistan will benefit from this low expenditure market. We stress that extensive bureaucracy, rampant corruption and counterfeiting of pharmaceutical products remain as key threat in boosting healthcare provision.
Headline Expenditure Projections
- Pharmaceuticals: KHR721.1bn (US$170mn) in 2012 to KHR789.3bn (US$190mn) in 2013; +9.5% in local currency terms and +8.2% in US dollar terms. Forecast broadly in line with Q313.
- Healthcare: KHR3,170.8bn (US$760mn) in 2012 to KHR3,4001.3bn (US$81mn) in 2013; +7.3% in local currency terms and +5.9% in US dollar terms. Forecast broadly in line with
Risk/Reward Rating: Cambodia's Pharmaceutical Risk/Reward Rating (RRR) score for Q413 is 33 out of the maximum 100 in our newly improved RRR system. The country scored below average for almost all indicators and sub-indicators including overall market expenditure, sector value growth and pensionable population. Consequently with this low score, Cambodia ranks second-last out of the 19 key markets in Asia Pacific, ahead of Myanmar.
Key Trends And Developments
- In September, 2013, the Trade and Development Authority of Pakistan sent out an 11-member pharmaceutical trade delegation to Vietnam, Cambodia and Laos to explore new markets for its pharmaceutical products.
- In July 2013, Thailand and Cambodia signed two public health agreements at a conference organised to discuss the development of human resources along the border areas of both and transportation connections. This development was disclosed by Thai Health Minister Pradit Sintawanarong. As part of the agreements, the health ministries of both the countries will jointly provide healthcare services for people living along the border regions of Thailand and Cambodia. The Thai government also offered to support Cambodia in setting up a universal healthcare system.
- In June 2013, the relationship between the Indian and Cambodian government offers great opportunity in terms of trade and investment across the pharmaceutical, agriculture, IT and infrastructure sectors, Paban Singh Ghatowar, the Union DONER Minister of India, said. Ghatowar made the statement at 'The North East India-Cambodia Business Conclave' held in the Cambodian city of Phnom Penh. A business delegation from India's north-eastern states visited Cambodia to establish bilateral cooperation between the two countries.
BMI Economic View: Cambodia's crucial tourism industry faces risks from political instability as postelection deadlock remains and threatens to spawn mass, opposition-led protests. While we remain bullish on the Cambodian tourism industry and do not expect these developments to curtail growth, we cannot rule out a negative shock, particularly in the event that Prime Minister Hun Sen cracks down on protesters.
BMI Political View: Following the disputed general election result at the end of July, where preliminary results showing a Cambodian People's Party (CPP) victory were strongly rejected by the Cambodia National Rescue Party (CNRP), a period of political deadlock is at hand. With bipartisan talks to investigate the disputed polls breaking down, and rumours swirling that the CNRP may boycott parliament, we have downgraded the country's short-term political risk ratings to reflect the rise in uncertainty caused by the CPP's loss of dominance. For similar reasons, however, we have upgraded the long-term ratings, as a reduced concentration of power is a positive step towards strengthening the country's democracy.