The Phnom Penh Special Economic Zone. PHOTO SUPPLIED
Cambodia has 24 special economic zones (SEZ) operating from 2006 to the end of the first half of 2023, with capital investment of $8.1 billion, mainly in sectors such as garment, footwear and travel products, auto parts, electronics, car tyre manufacturing, automotive and bicycle assembly.
According to a report by the Council for the Development of Cambodia (CDC), there are 655 factories and companies, which employ 174,000 people, and a total export value of $25.7 billion recorded between 2011 and June 2023.
Newly-appointed CDC Secretary-General Chea Vuthy said the number of SEZs has increased gradually since the drafting of regulations and laws from 2005 till the end of June 2023.
“We have noticed that over the last 10 years, we have had 24 SEZs operating with a special economic administration stationed there,” he said at a forum last month.
The special economic zones have played an important role in the diversification of the Cambodian economy, industries and investment sources.
Garment, footwear and travel products account for more than 90 per cent of investment in SEZs.
“In fact, we can see that exports from SEZs have increased significantly, even during Covid-19. In 2011, the volume of exports from those zones was only four per cent of the total export share but by the end of 2022, it increased to 23 per cent as of June 30, 2023,” he added.
Cambodia Chamber of Commerce vice-president Lim Heng said although global economic growth has been affected, Cambodia has been able to continue to receive a steady stream of investment.
He said Cambodia is attractive because of its political stability, strong economic growth, investment laws, geographical location, young labour and good infrastructure.
Cambodian products also enjoy preferential tariffs for export to some major markets such as the US, Europe, China, Korea and Japan.
In addition, Cambodia has signed trade agreements with key partners such as China and South Korea, as well as the Regional Comprehensive Economic Partnership with 15 member countries, which help to attract more investors to Cambodia, Lim Heng said.
The investment of local and foreign investors in Cambodia would continue to increase as the global economic and political situation improves.
“Foreign direct investment (FDI) is very important for the strength of the economy because in addition to helping to create jobs, it also raises Cambodia’s finished product exports to international markets,” he said.
In 2021, FDI in Cambodia totalled $41 billion, an increase of 11 per cent compared to 2020.
Broken down by sector, finance accounted for the lion’s share at $9.4 billion, or 22.9 per cent, followed by manufacturing ($8.5 billion; 20.8%), real estate ($4.9 billion; 12%), hotels and restaurants ($4.4 billion; 10.7%), agriculture ($4.2 billion; 10.3%), electricity ($2.6 billion; 6.2%), and construction ($1.6 billion; 4.1%), while other sectors comprised $5.3 billion, or 13 per cent.
