Economic crisis blamed for major drop from $4.43 billion in first half of 2008 amid assurances Cambodia remains attractive for foreign direct investment
- $1.2b in FDI approved in first half, a 73pc decline on same period last year
- $4.43b approved in first half of 2008, but $3.8b for just one project - Chinese Union Development project in Koh Kong
- Economic crisis cited by government as cause of decline
THE Council for the Development of Cambodia (CDC) has approved 53 investment projects in the first half of the year, worth a total of US$1.2 billion, according to statistics released Monday.
The figures represent a sharp drop from the first half of 2008, when the CDC approved $4.43 billion in investments, including a $3.8 billion tourist development in Koh Kong by Chinese Union Development Group.
A CDC official, who declined to be named, said investment had taken a hit from the global financial downturn, but that in relative terms the Kingdom remained an attractive destination for investors.
"Today's economic crisis has caused direct influxes of capital around the world to decline by 50 percent in the first half of 2008, and cross-border investment to decrease 77 percent," the official said.
Of the investments approved, $354 million went to the tourism sector, $323 million to agriculture, $303 to industry and $241 million to other private-sector developments.
Our FDI is still in a favourable condition despite the world economic crisis.
The CDC official added that Cambodia's pre-existing investment projects had boosted the current economic activity in the country and would continue to propel private-sector development.
He noted, "If no companies came to invest, many other sectors would be sure to grind to a halt. But as long as factories are built, workers are needed.... This will create job opportunities for transportation service providers and other services. What is more, they will pay taxes to the government."
Sok Sina, an independent economic analyst, agreed that most CDC-approved investment projects are now being carried out since the authority had started vetting them more strictly.
"Generally speaking, we are happy to see that many requested investment projects are in operation. It is a good sign for Cambodia's economy, and our FDI is still in a favourable condition despite the world economic crisis."
According to the CDC, ASEAN countries, including Thailand, Vietnam, Singapore and Indonesia, were the leading sources of investment money in the first half, with $389 million in investments. Second to ASEAN were other Asian investors - including from China, Korea, Taiwan, Japan and Hong Kong, which have invested a total of $367 million.