Logo of Phnom Penh Post newspaper Phnom Penh Post - FDI inflow seen as driving economic development

FDI inflow seen as driving economic development

FDI inflow seen as driving economic development

A modest increase in the inflow of foreign direct investment is a sign that Cambodia remains an attractive destination to investors, and will go a long way toward the country’s development, analysts said yesterday.

Total capital inflow of foreign direct investment (FDI) to Cambodia amounted to $511 million during the first half of the year, a 6 per cent increase over the same period last year, central bank data show.

The figures, contained in a government mid-year assessment of Cambodia’s macroeconomic outlook released on Tuesday, did not indicate how the FDI was distributed. However, less than a quarter of these capital inflows went to the banking sector, “indicating that a high proportion of these flows went into productive sectors”, the report said.

Hing Thoraxy, senior researcher at the Cambodian Institute for Cooperation and Peace (CICP), said that more than half a billion dollars in FDI in just six months was a respectable performance, and the foreign capital would help reduce poverty and develop the economy.

“When we can receive capital inflow from FDI at more than $1 billion per year . . . it will greatly assist in quickening the development of our country,” he said. “It will help to provide jobs to the Cambodian people and provide many benefits to the economy.”

While the central bank’s data show $511 million in capital inflow from FDI during the first six months of the year, the Council for the Development of Cambodia (CDC) has reported approving $1.1 billion in foreign investment projects during this period. The higher figure suggests the real flow of capital from FDI will remain strong during the coming period.

The foreign capital could push forward plans to broaden the Cambodian economy. Last year, the government released a 10-year industrial development policy (IDP) that outlines strategies to expand the country’s narrow industrial base beyond garments and rice. It is hoped the policy in turn will attract more FDI.

“Our IDP is a good tool to attract more investment to diversify our economy,” Vongsey Vissoth, secretary of state at the Ministry of Economy and Finance (MEF), said at the report’s release.“It is a new engine to drive investment in our country.”

Cambodian investors accounted for nearly 70 per cent of the $4.6 billion in total committed investment that the CDC reported last year. China was the top foreign investor, contributing nearly 20 per cent of overall investment.

MOST VIEWED

  • ‘Education’ a priority traffic-law penalty

    A top National Police official on June 21 neither rejected nor confirmed the authenticity of a leaked audio message, which has gone viral on social media, on a waiver of fines for a number of road traffic-related offences. General Him Yan, deputy National Police chief in

  • Siem Reap’s $18M zoo said to educate public, help wildlife

    Angkor Wildlife and Aquarium Co Ltd has invested $18 million in a zoo in Siem Reap province, which will be opened in October to educate and promote animal conservation as well as attract national and international tourists. Currently, the Angkor Wildlife and Aquarium is building the

  • Volunteer scheme to foster ‘virtuous’ humanitarian spirit

    A senior education official said volunteer work contributes to solidarity and promotes a virtuous humanitarian spirit among the youth and communities. Serei Chumneas, undersecretary of state at the Ministry of Education, Youth and Sport, made the comment during the opening of a training programme called “

  • Chinese firms unveil preliminary results on metro, monorail for capital

    Minister of Public Works and Transport Sun Chanthol and representatives from China Road and Bridge Corp (CRBC) and its parent company, the state-owned China Communications Construction Co Ltd (CCCC), met on June 24 for talks on results of the firms’ preliminary study on a potential metro

  • Nestle’s debut may spur dairy market

    Leading confectionery manufacturer Nestle plans to invest in Cambodia by setting up an operation in the near future, a move majorly hailed by local dairy farmers as a means of boosting the fresh milk market in the Kingdom. During a visit by a delegation led

  • ACLEDA, WU to enable global money transfers

    Cambodia's largest commercial bank by total assets ACLEDA Bank Plc and global money transfer firm Western Union (WU) have partnered to offer customers cross-border money transfers to 200 countries via “ACLEDA mobile” app. In Channy, president and group managing director of ACLEDA, said the June 22 agreement