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Vietnam’s investment skyrockets

Vietnam’s investment skyrockets

Political instability has done little to dampen Vietnam’s appetite for investment in Cambodia, the latest figures revealed yesterday by Prime Minister Hun Sen show.

Last year, Vietnamese investment reached $302 million, up 250 per cent from $86 million in 2012, according to the prime minister, who spoke about the relationship between the two countries during the 4th Cambodia-Vietnam Conference on Investment Cooperation at the Peace Palace in Phnom Penh.

With his Vietnamese counterpart, Nguyen Tan Dung, looking on, Hun Sen ticked off a variety of industries that have benefited from Vietnamese funds over the years, and said that all the investments “have contributed to economic diversification, job creation and accelerated economic growth”.

The announcement comes barely a week after Cambodia commemorated the 35th anniversary of the Vietnamese-led victory over the Khmer Rouge in 1979, illustrating that ties between ruling party leaders and the neighbour, which first groomed them during the 1980s, are as strong as ever.

“The economic relations between Cambodia and Vietnam have been on an upward trajectory for the last decade,” Carl Thayer, an analyst at the University of New South Wales in Australia, said. “The reciprocal visits by Prime Minister Hun Sen to Vietnam and Prime Minister Dung to Cambodia are evidence that relations are at an all-time high. Increased Vietnamese investment in Cambodia has been the natural by-product of these developments.”

But the investment figures also arrive amid a politically tense atmosphere, as supporters of the opposition Cambodia National Rescue Party fuel a rise in anti-Vietnamese sentiment, a dark byproduct of protests challenging July’s poll results. While enmity between the two countries has existed for hundreds of years, Hun Sen and his supporters cooperated with the Vietnamese caretaker government in the 1980s, bringing much official antagonism to an end. The opposition party, however, continues to see Vietnam in a less kindly light, and heated rhetoric has played out in spates of mob anger.

In July last year, groups of opposition supporters confronted people who looked Vietnamese at the polling booth, preventing them from voting.

As recently as the first weekend in January there were reports of opposition-aligned garment workers and local residents trashing businesses during a violent strike at Canadia Industrial Park that resulted in military police shooting dead at least four protesters. These incidents, however, have done little to deter Vietnamese money from flooding into Cambodia.

“Vietnam is clearly among the biggest players in Cambodia’s economy in terms of providing income, creating jobs and contributing to enhancing the livelihood of our people,” Kith Meng, president of the Cambodia Chamber of Commerce, said yesterday at the conference.

Meng should know. The head of Royal Group travelled with Hun Sen to Vietnam last month for a state visit. On the trip, Meng signed a deal to import fertiliser through a subsidiary from Dap Vinchen Limited and the Petrovietnam Fertilizer & Chemicals Corporation of Vietnam.

Tran Tu, attache at the Vietnam Trade Office in Cambodia, said companies have invested in telecommunications, aviation, rice, fertiliser, garments and milk production.

The investment environment is getting “better and better” Tu said, adding that investor confidence was buoyed by government-improved trade facilitation.

It is a shifting political landscape, rather than anti-Vietnamese sentiment, that would be on the minds of Vietnamese investors, Ou Virak, president of the Cambodian Center for Human Rights, said.

“[With a] stronger opposition, you have a government willing to fight corruption,” he said.

Son Chhay, the opposition party whip, grouped Vietnam with China as examples of communist regimes that had traditionally received “special privileges” from Hun Sen.

He said that many of their investment dollars are spent on economic land concessions that have little wider benefit for Cambodian society.

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