Representatives of the private sector and economists have encouraged regional developers to establish a private sector development council to invest in regional special economic zones (SEZs), as they called for renewed focus on the development of exiting SEZs.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng said on April 11 that the government, through the Council for the Development of Cambodia (CDC), has always encouraged domestic and foreign investors to establish factories and large manufacturing enterprises in the Kingdom’s SEZs.
“Incentives, such as three- to nine-year income tax exemptions and import duty exemptions for raw materials are already in place nationwide, but the SEZs are even more advantageous for investors,” he said.
“This is due to a number of factors. They have construction laws in place which facilitate the ease of building new facilities. They also have mechanisms in place which simplify imports and exports,” he added.
He acknowledged that few such large plants exist in most SEZs.
“Operations such as auto assembly factories or sizable industrial plants require huge areas of land and a large workforce to be available. Because of their placement in rural areas with poor transportation infrastructure, and even water and electricity shortages, several SEZs still face some difficulties in attracting investment,” he said.
“I hope the CDC will examine these shortfalls and attempt to remedy them,” he concluded.
Ky Sereyvath, economics researcher at the Royal Academy of Cambodia (RAC) and director of the RAC’s China Studies Centre, said all investment activity, both inside and outside the SEZ, is important to the Cambodian economy.
“Some SEZs don’t appear to be utilising their full potential. Due to Cambodia’s still-limited industrial development in comparison to other countries in the area, investors are less interested in investing in some SEZs, which is the fundamental reason for their lower activity and potential,” he added.
He suggested that many sectors that are of interest to most investors are outside the SEZs, especially the garment industry, and that there appears to be more interest in rural areas than urban ones.
“One of the reasons for limited activity in many SEZs is due to the Kingdom’s undeveloped industrial sector. Many potential investors are more attracted to our more heavily developed neighbours,” he added.
Cambodia currently has more than 50 SEZa, designed to serve the Kingdom’s socio-economic development.
Last year, 186 new investment and expansion projects with a total investment of more than $4 billion were approved in Cambodia, according to a report from the CDC. In SEZs, the CDC approved 43 investment and production expansion projects, totalling around $588 million in investment and creating more than 1,700 new jobs.
