The investment landscape in Cambodia showed a marked recovery over the first five months of 2022, during which the Council for the Development of Cambodia (CDC) approved 63 private investment projects outside of the Kingdom’s special economic zones (SEZ), 18 ventures more than in the same period last year, according to the finance ministry.
The projects had a total investment commitment of $2.3 billion, up by 183.1 per cent year-on-year, and were expected to create about 52,000 new jobs, up by 70.3 per cent, the Ministry of Economy and Finance said in its May 2022 Socio-Economic Trends report.
The top five sectors accounting for the most investment commitment were – in order – services, industry, energy, tourism and agriculture.
According to the report, the Cambodian economy is expected to sustain its upward trend for the rest of 2022, undergirded by better global demand, despite fallout from the Russia-Ukraine conflict, which the ministry noted was minimal due to the Kingdom’s limited economic relations with the two Eastern European countries.
The high Covid-19 vaccination rates and moves towards a greater reopening has allowed economic activity to gradually return to normal, the report added.
Speaking to The Post, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that the series of strategies launched by the government during the Covid-19 crisis to revive the economy have continuously shown positive results.
Offering examples, Heng explained that industrial production is now up and running nationwide, in a recovery he claimed has outpaced that of many countries. He also remarked that the number of domestic and foreign investors in Cambodia is on a steady rise.
In addition to beneficial domestic investment conditions, Cambodia has entered into a number of bilateral and multilateral free trade agreements (FTA), he said, adding that many major traders leverage the favourable terms of the deals to export goods to the markets of partners.
The steady increase in Cambodia’s trade figures suggests that the Kingdom is emerging as a thriving production and import-export hub, he claimed, predicting that the pace of new investment projects would continue to increase.
On July 21, S&P Global Ratings said it forecasts Cambodia’s gross domestic product (GDP) to expand to 6.3 per cent this year, higher than projections made by the World Bank, International Monetary Fund and Asian Development Bank.
“The country’s vaccination programme was a notable success, which facilitated its reopening and reinvigoration of foreign investments,” it said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, credited the growth in new investors to political stability; a cheap, abundant and skilled labour force; high vaccination rates; and large import-export markets.
Vanak noted that investment in Cambodia has considerably diversified beyond the traditionally dominant garment sector, which he said would “make the Cambodian economic poles stronger” and improve access to more import-export markets.
“The development of new projects also helps Cambodia reduce labour migration,” he said.
In 2021, the Council for the Development of Cambodia (CDC) approved a total of 108 non-SEZ private investment projects – down 46 ventures from 2020 – with capital commitment of $1.719 billion, down by 72.6 per cent from nearly $6.3 billion, according to the finance ministry.