A view of high rise buildings in Phnom Penh last month. Hong Menea
A senior official of the Council for the Development of Cambodia (CDC) said that despite the effects of the Covid-19 pandemic, geopolitical tensions including the US-China trade situation, foreign direct investments (FDI) into Cambodia are remarkably stable and in good condition compared to member countries in ASEAN.
Chea Vuthy, deputy secretary-general of Cambodian Investment Board and Cambodian Special Economic Zone Board of the CDC, said at a recent business forum that the country has economic potential, peace, security, political and economic stability.
He added that the private sector is an important driving force for participation in the implementation of the national economy.
“We see that the FDI in a year is nearly $4 billion. In 2020, ASEAN saw a sharp decline of about 40 per cent, but FDI remained stable for us at around $3.6 billion,” he said.
In the first half, Cambodian investors ranked first place because of the confidence in the investment situation in the country and trust in the leadership.
For FDI, investment from China accounted for 42.1%, followed by Thailand (with a rate of 1.09%), Japan (0.98%), Cayman Islands (0.52%), Samoa (0.50%), South Korea (0.45%), British Virgin Islands (0.32%), Singapore (0.31%) and Malaysia (0.19%).
For the capital investment as of the first six months of 2023, there were 128 projects ($1.3 billion) compared to 111 projects ($3.1 billion) in the same period in 2022, according to CDC’s figure.
“This is the amount of capital investment that we have registered as a qualified investment project (QIPs) at the CDC, we see that the figures in 2021 and 2022 are similar, but in 2023 for a period of six months compared to the same period in 2022, we see that the volume of investment has decreased slightly because in 2023 there are no large projects, but the number of investments has increased,” he said.
Royal Academy of Cambodia economic researcher Hong Vanak told The Post that although the global economic growth situation continues to be affected by the pandemic (from the beginning of 2020) and geopolitical conflicts including the Russia-Ukraine war, the investment status persists as usual, just not as strong as before 2020.
“Although the number of projects and investments approved by the CDC is not large, it is also a positive for Cambodian economic activity at this stage,” he said.
He underscored that what has been remarkable in recent years is that the number of local investors has become more active.
According to Vuthy, broken down by investment sectors from 2017 to 2022, tourism saw more than 40 per cent growth, industry accounts for about 25.5 per cent, infrastructure 30.6 per cent, and agriculture 3.8 per cent.
He said that Phnom Penh represented 20 and 30 per cent of investment while 70 to 80 per cent are spread in Kandal, Kampong Speu, Svay Rieng, Sihanoukville, Takeo and other provinces.
