The total approved investment jumped about 159 per cent year-on-year in 2011 to US$7.021 billion from $2.7 billion the year before, official data from the Council of the Development of Cambodia (CDC) showed.
Heng Chivoan/Phnom Penh Post
People walk on a beach near the bridge to Koh Puos, the site of a large-scale tourist development, in Preah Sihanouk province in July last year.
The tourism, industry and agricultural sectors saw dramatic increases, 1,993.57 per cent, 203.48 per cent, and 31 per cent respectively, the data showed.
It showed total investment in the tourism sector reaching $2.760 billion with 8 projects, up from $132 million the year before.
Industry attracted $2.869 billion with 113 project, of which 78 were in the garment sector, compared to $945 million in 2010.
The agricultural sector with 24 projects took in $725 million compared to $554 million in 2010, according to the data.
Experts said political stability and open economic policy were the two main factors behind the rise.
Moreover, good economic performance in the region also contributed to the growth.
“We have a very high level of political stability. That is the main thing that investors want. We also see that we made some improvement in laws and regulations and some tax incentives in import-export made by the government. Those are impressive points,” said Chheng Kimlong, economic and business lecturer at the University of Cambodia.
The downturn in European countries, as well as the United States, pushed many foreign investor toward Asia, and Cambodia, Chheng Kimlong said “I noticed the flow of foreign direct investment go into the South Asia and East Asia region because of the fast speed of growth here”.
Stephen Higgins, CEO of ANZ Royal Bank, wrote in an email that positive growth in the economic outlook led naturally to a higher levels of investment.
“We are seeing a significant expansion in the manufacturing industry, which is a real positive for Cambodia,” he said.
The approved investment in the service sector declined by around 38 per cent from $1.059 billion to $658 million in 2011, according to the CDC data.
Higgins said it was not a sector requiring an intensive level capital investment.
According to the data, investment from the United Kingdom stood at number one worth $2 billion on nitrogen-based chemicals, followed by local investment worth $$1.93 billion.
China came in third at $1.191 billion and Vietnam reached $631 million.
Chheng Kimlong said that attention must still be paid to the anti-corruption law.
“Although we established a lot of rules, regulations or anti-corruption laws, the coordination from one government institution another, as well as information sharing, is still limited. Investors still don’t trust us that much,” he said.
“Corruption is still an issue for investors, but I am encouraged by steps the government is taking to deal with it,” Higgins added.