Logo of Phnom Penh Post newspaper Phnom Penh Post - Economists fear fall in investment, aid

Economists fear fall in investment, aid

Economists fear fall in investment, aid

CAMBODIA risks a slowdown of foreign direct investment and a dropoff in official development aid (ODA) as the impact of the global financial crisis spreads to developing countries, economists say.

"FDI could slow quite considerably with the financial meltdown ...  not a reversal necessarily of capital, but a slowdown in the inflow of capital," said Eric Sidgwick, senior country economist for the Asian Development Bank (ADB).

This year, FDI inflows amounted to some US$900 million. The amount of ODA pledged to the Kingdom was $690 million.

"We don't know if rich countries will cut ODA yet," Minister of Commerce Cham Prasidh told the Post, adding that the government was anticipating that donors would soon become less inclined to cough up assistance for the Kingdom.  

However, Nguon Meng Tech, director general of the Cambodia Chamber of Commerce, said, "People should not worry too much about foreign aid."

"Donor nations already have prepared their budgets for this year and will not change them now," he said, adding that he thought the private sector had also secured sufficient investment to weather the crisis.

But key business figures say economic turmoil overseas is already having a significant impact on FDI.

"Hundreds of my workers are losing their jobs ... if this continues, the impact on my business will be serious," Mong Reththy, president of Mong Reththy Group, told the Post.

He added that his company recently lost $1 million when the price of palm oil dropped from $1,200 to $500 per tonne.

Related Story

MOST VIEWED

  • The hairy little heroes saving many lives in rural Cambodia

    IN RURAL Siem Reap province, rats dare to tread where no person will, as these hairy little heroes place their lives on the line each day for the good of the local community. The rodents are the most important members of a special team, leading

  • Hun Sen’s China visit ‘a good opportunity’

    Prime Minister Hun Sen’s visit to Beijing on Sunday to discuss economic and trade issues presents a good opportunity for the Kingdom to strengthen Chinese ties and counter punitive measures by the West, an analyst says. The prime minister’s four-day official visit to

  • Former chief bodyguard receives royal pardon

    The former chief bodyguard of late Senate president Chea Sim has received a royal pardon nearly eight years after he was sentenced to 15 years behind bars on several charges, according to a royal decree dated November 12, last year, and obtained by The Post on Wednesday.

  • Close to the edge: Hair raising pictures from Kulen Mountain

    A new hair raising attraction on Kulen Mountain has finally opened to the public, with people flocking to the protruding cliff edge overlooking green mountainous forests to take photographs. The giant overhanging rock is situated in an area known as Mahendraparvata – an ancient city of