Investment expected to remain concentrated in construction
Women walk past an advertisement for the Korean-invested IFC high-rise development in Phnom Penh.
OREIGN direct investment nearly tripled in the first half of the year compared with the same period in 2007, according to figures from the Cambodian Investment Board Report of the Council for the Development of Cambodia (CDC).
FDI totaled US$1.5 billion - up 2.90 fold over 2007's $519.8 million - domestic investment fell from $332.4 million to $208.4 million, a drop of 32.5 percent, during the same period, said the August 1 report.
The CDC approved 51 new projects in the first six months of the year, worth $1.5 billion and creating 73,176 jobs.
South Korea was the leading investor at 71.47 percent of the total, with China coming in at 10.21 percent and France third at 2.80 percent, said the report.
"The huge surge in FDI in the first [half] was [from] investment in a 52-storey International Financial Center by [GS Cambodia Development Co Ltd] from Korea with an investment value of nearly US$1 billion," the report stated.
FDI would have been similar to last year if the GS project were not included. In the first half of 2008, investment has been concentrated in business centres and large-scale resorts. In the same period last year, most investment was in garments, stated the report. Agriculture investment increased 14 percent, industry and manufacturing was up 19 percent, and tourism grew 78 percent.
"Tourism increased sharply due to investments in islands, while infrastructure was up almost three-fold."
Youn Heng, deputy director of the evaluation and incentive department of the Cambodian Investment Board, told the Post that most foreign investment has been pouring into real estate and coastal development, while garment sector investment has fallen. "I project that this year's FDI will reach $3 billion," he said.
Chan Sophal, president of the Cambodian Economic Association, said that it was too early to pin down the figure and warned that foreign visits would plummet if fighting were to break out over the Preah Vihear temple. "Now foreign investors are waiting to see the Preah Vihear temple issue resolved. If there is no war between the two and the dispute is solved peacefully, more foreign investors will target Cambodia because this country is favorable for investment," he said.