Analyst says monthly drop does not necessarily paint full picture
THE number of approved investment projects in Cambodia fell dramatically in October compared with the same month in 2008, according to figures from the Centre for the Development of Cambodia (CDC) released Thursday, as large projects failed to materialise following the economic downturn.
Only US$15.5 million in projects were approved in October, a 98 percent drop compared with the $869.8 million in projects given the green light during the same month in 2008.
According to the CDC’s statistics, four major “tourism” projects worth a total of $704 million provided the majority of last October’s approvals.
The first 10 months of the year has seen approvals totalling only $1.624 billion, a far cry from the $9.928 projects certified during the same period last year.
An official from the CDC, who spoke on condition of anonymity, said the drop in investment projects resulted from a lack of capital flow from foreign countries.
“Most investors borrow money from banks, and the downfall of big banks around the world has systematically affected the flow of capital into Cambodia,” said the official.
During October the Cambodian government gave the go-ahead to only two projects: a shoe factory and a lightweight manufacturing development.
Kang Chandararoth, president of the Cambodian Centre for Study and Development, said October’s downturn in investment into Cambodia was not necessarily cause for alarm.
“We cannot evaluate investment each month because it is meaningless in evaluating change in the direction of an economic structure. We should make the comparison on a quarterly or yearly basis,” he said.
Sam Rainsy Party lawmaker Son Chhay said there were underlying problems in attracting capital to the Kingdom beyond the global financial crisis, namely high electricity prices, inadequate human resources and bureaucracy.