Investment in Cambodia is much lower this year than in 2006, but Commerce Minister

Cham Prasidh said that two mega-projects under negotiation could boost the figures

by year-end.

For the first nine months of 2007, combined Cambodian and foreign direct investment

totaled $1.8 billion, said Prasidh, addressing a UN Conference on Trade and Development

on October 17.

That compares to $4.3 billion in 2006 and $830 million in 2005.

Prasidh declined to give any details on the two projects under negotiation.

"I believe in 2008 Cambodia will attract more investment as we have a lot of

projects in development on the coasts," he said. "At the moment companies

from Japan, Korea and Europe are studying the feasibility for investment in Cambodia."

He added that Cambodia is not yet able to attract big investments in electronics,

which require advanced skills, so investment still consists largely of manufacturing

and agro-industries.

"We cannot compare the Cambodian investment with Singapore, Malaysia or Thailand,"

he said. "It looks like the cow and the elephant."

Prasidh also said that January-September figures from the Council for the Development

of Cambodia show that domestic investment is ahead of foreign direct investment -

nearly $1 billion of the total $1.8 billion investment recorded by CDC so far this

year.

The numbers stand in sharp contrast to the last decade. In the 13-year history of

the CDC, established in 1994, total investments on the books are $10 billion, of

which $9.4 billion was foreign direct investment.

The figures show increased confidence by Cambodian businesses in the government and

the economy, Prasidh said.

China placed second behind local investors, with Japan coming in third so far this

year.

In 2006 Cambodians were also the largest investor, followed by South Koreans and

then Chinese. In 2005, China was the leading investor.

A Chinese embassy official said that in 2006 China made $717 million in capital investments

in Cambodia.

"I see a lot of South Korean and Malaysian companies also investing in Cambodia,"

he said. "I believe Cambodia is becoming more and more attractive for investment."

According to Xinhua news agency, a total of 3,016 Chinese companies have registered

in Cambodia, far more than those from other countries such as South Korea, Singapore,

Malaysia and Thailand.

South Korea has 1,162 companies registered in the kingdom, while Singapore has 1,036,

Malaysia 918 and Thailand around 800.

Son Chhay, a Sam Rainsy Party lawmaker, complained that the Chinese investment is

not as beneficial as investment from some other countries. He said many of the Chinese

companies are responsible for destroying natural resources and polluting the environment.

He said the government should look for more investment from developed countries like

the U.S. or Japan.

"I do not think Cambodia gets much benefit from the Chinese investment,"

Chhay said.  "Most of the Chinese companies are making business under the

table with the government."

One of the biggest investments this year came in July when the CDC granted licenses

worth $627 million to private companies to invest in Sihanoukville and Kampot.