Logo of Phnom Penh Post newspaper Phnom Penh Post - Why FDI has plummeted

Why FDI has plummeted

Why FDI has plummeted

Foreign direct investment has fallen dramatically in Cambodia since 1996 because

the challenges outweigh the opportunities for investors.

This is the conclusion of four scholarship students - Saing Chan Hang, Thea Sophy,

Yi Makara and Kim Sokche. They presented their findings to an audience at the Australian

Centre for Education before leaving for Japan this week for postgraduate studies.

A key factor behind the decreasing investor interest, they said, was Cambodia's competitive

disadvantages against neighboring countries, such as Thailand and Vietnam. Operating

costs were generally higher in Cambodia; gasoline for example cost twice as much.

Unlike those countries, Cambodia lacks supporting industries. This means that raw

material and intermediate goods often have to be imported, at higher cost.

Another reason was the prevalence of bribes. Saing, Thea, Yi and Kim quoted a World

Bank survey claiming that 82 percent of 368 interviewed businesses operating in Cambodia

paid bribes.

Together with further discouraging factors such as problems with smuggling, an unskilled

labor force and a long registration process for new businesses , the students concluded

that the challenges overshadowed the opportunities for the investors.

They urged the government to take the following measures to put the country back

on the track:

* Strengthen law enforcement.

* Simplify registration processes.

* Improve infrastructure.

* Maintain economic and political stability.

* Curb smuggling.

* Enhance human resource capacity.

* Encourage investment in supporting industries.

MOST VIEWED

  • Guards protest dismissals, reject claims of sharing naked photos of child

    Some 20 former security guards at the US Embassy in Phnom Penh protested on Tuesday against their dismissal. They accused their employers of falsely claiming they had viewed and shared child pornography from their mobile phones as grounds for their termination. In total, 32 personnel were dismissed

  • We’re going to Wisney World!

    More than 6,000 mostly Chinese attendees witnessed the inauguration ceremony of a $1 billion Sihanoukville resort project called Wisney World in the capital on Wednesday. The event on Koh Pich, attended by several senior Cambodian government officials, is a joint venture between China’s AMC International and

  • Funcinpec urges probe into deadly Preah Sihanouk accident

    THE Funcinpec party has urged the government, especially the Ministry of Interior, to investigate the traffic accident in Preah Sihanouk province which left Prince Norodom Ranariddh badly injured and his wife Ouk Phalla dead. Funcinpec Vice President You Hokry told reporters at Botum Votey pagoda,

  • Gov’t continues China tilt as ties with the US slide on ‘interference’ in Kingdom’s internal affairs

    CHINA has granted some $131 million in aid to the Cambodian military. It comes as yet another sign that the Kingdom is strengthening strategic ties with its Asian neighbour to counter increasingly cold relations with the United States. The aid was announced as part of a