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Polls scaring off new business: ministry

Angkor Wat temple during sunrise in Siem Reap province
Tourists visit world heritage Angkor Wat temple during sunrise in Siem Reap province last year. MENG KIMLONG

Polls scaring off new business: ministry

The number of new businesses registering in Cambodia slid 20 per cent in the first half of this year compared with the same time in 2012 as investors fret over putting money into the economy during a potentially instable election year, a senior official said.

Data from the Ministry of Commerce shows that a total of 1,368 new businesses registered from January until the end of June this year, as opposed to 1,694 in the first six months of last year.

Of the total, foreign registrations dipped by about 19 per cent to 659, and new local businesses declined by roughly the same amount to 711.

“I think the drop is a side effect from the election because investor sentiment is causing businessmen to not want to put their money or expand their businesses as they are afraid of the political issues,” said Kong Putheara, deputy cabinet chief of the Ministry of Commerce.

In polls past, investors were often scared off by violence and instability surrounding the vote. But the run-up to the July 28 national elections has been relatively stable, and Putheara said that the drop doesn’t reflect the reality of the situation.

“This kind of concern is normal, and it also happens in other parts of the world,” he said. “I think right now they are just waiting to see the result of election. So, after the election everything will be normal or possibly even more of an increase [of registrations] than in previous years because our economy is performing very well."

Lim Bun Heng, president of Loran Import-Export, one of the biggest milled rice exporters in the country, agreed, saying this year election-related tension isn’t hitting his business.

“I think our politicians are mature now. And the election will not make any problem to the country – we will not have war,” he said, adding that he already exported around 8,000 tonnes of milled rice in 2013.

Hiroshi Suzuki, chief economist of the Business Research Institute for Cambodia, is also bullish on the country’s economic performance, and said the election should not have as big an impact as the drop in registrations suggests.

“I have had some good and positive signs of good performance of the Cambodian economy, such as high growth of exports, especially garments to the EU and US; high growth of cargo in both the Phnom Penh Port and Sihanoukville Port; increase of import of construction materials such as iron steel.

“I am of the opinion that the Cambodian economy will continue its good growth in this year,” he said.

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