The Council for the Development of Cambodia (CDC) has approved a cumulative 211 Japanese investment projects as of July 31 worth about $3.14 billion since its inception in 1994, according to the CDC.
Of these, 66 projects valued at $340 million were planned for special economic zones (SEZ), and 145, to the tune of $2.8 billion, were proposed for sites outside of the industrial parks, the CDC said in a press release on August 30.
The release was issued following the 22nd Public-Private Sector Meeting of the Cambodia-Japan Joint Committee held via video link on the afternoon of August 30.
Using a previous CDC report as reference, this means that one new non-SEZ Japanese investment project was given the nod between February 1 and July 31.
The meeting was reportedly attended by CDC secretary-general Sok Chenda Sophea and Japanese ambassador of Cambodia Masahiro Mikami, as well as representatives of relevant ministries and agencies, the Japan International Cooperation Agency, the Japan External Trade Organisation (Jetro), the Japan Business Association of Cambodia, and around 130 Japanese companies with investment operations in the Kingdom.
The Cambodia-Japan Joint Committee meetings are part of the investment maintenance mechanism established in 2009, under the framework of the Cambodia-Japan Agreement on Liberalisation, Promotion and Protection of Investment, signed by Prime Minister Hun Sen and then-Japanese Prime Minister Shinzo Abe on June 14, 2007.
Speaking during the meeting, Chenda Sophea stressed that Japanese investors consistently express high confidence in the Cambodian government, which he termed a “motivating factor” for them to keep coming back to invest in Cambodia, in all fields.
He opined that Japanese investment could be an “important turning point” for Cambodia in its pursuit of export diversification, now and on the horizon.
“The investment activities of all Japanese investors, especially in the non-textile manufacturing sector, have been playing an important role in contributing to the diversification of the Cambodian economic base and human resource development,” he said.
He underscored that the Japanese approach to investment ensures that the diversification process is “in line with the provisions of the Cambodia Industrial Development Policy 2015-2025, which outlines the vision to change the structure of Cambodian industry from a labour-intensive structure to a skills-based model by 2025”.
Chenda Sophea also expressed hope that Japanese carrier ANA Holdings Inc would resume direct flights between Japan and Cambodia soon, which he said would help boost trade and investment between the two countries.
The ambassador lauded the strong, all-round cooperation between the governments and peoples of the two countries, thanking the CDC, as well as relevant ministries and institutions for their “responsible efforts” in responding to and facilitating the challenges and requests of Japanese investors.
“This shows the high interest of the Royal Government of Cambodia in maintaining and providing warmth to all [Japanese] investors,” Minami said.
The meeting’s agenda included topics such as minimum wage and seniority pay, tax obligations, logistics, electricity supply and pricing, car imports, human resource development, cooperation projects, and the organisation of workshops on supply-chain database management systems.
Ministry of Commerce spokesman Seang Thay told The Post on August 31 that bilateral trade between Cambodia and Japan remains robust, despite the spiralling downward global trade trend evoked by the Covid-19 crisis.
He stressed that Japan holds sizeable untapped export potential for Cambodian merchandise, and that Japanese investment interests cover a wide spectrum of economic areas.
“Positive signs remain at this time for Cambodia-Japan trade relations,” he maintained.
Data from Jetro show that in the first half of 2021, Cambodian exports to Japan were worth $814.53 million, an increase of 2.7 per cent compared to the first half of 2020, and imports from Japan were valued at $295.23 million, rising 35 per cent year-on-year.
These figures imply that Cambodia’s trade surplus with Japan narrowed more than nine per cent over the period, from at least $573 million to $519.3 million.