The Council for the Development of Cambodia (CDC) has in the first two months of this year announced its approval of final registration certificates for 37 investment projects worth about $2.38 billion, an indication of significant progress in economic recovery as Covid-19 wanes.
The 25 project approvals announced in January made up the vast majority of that value, with total registered capital of nearly $2.3 billion, according to CDC figures. The bulk of that came from Kampot Logistics and Port Co Ltd’s $1.300 billion multi-purpose port with a logistics centre, in Kampot province’s Bokor town.
CDC notices show that most of the projects greenlit in the January-February period covered areas such as garments, tyres, and fruit processing and packaging.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng affirmed that Chinese companies once again accounted for the majority of the ventures.
He voiced pride in the increasing representation of the tyre manufacturing and agro-industry among approved projects, saying that these sub-sectors “better support” the Cambodian economy than the garment sector, which he noted did not account for the majority of the planned ventures.
“Light industries and the garment sector may be easily affected [by external factors], but having lots of investment in medium or non-garment sectors would help stabilise the economy by creating domestic markets, and especially by yielding local raw materials to process for export, such as rubber and other agricultural products,” Heng said.
He noted that the CCC was eager to reach out and develop relations with entities in foreign countries.
For example, Heng, other CCC representatives and a delegation of the foreign ministry’s Economic Diplomacy Working Group late last month met with the Ankara-based Industrialist Businesswomen and Businessmen Confederation (SANKON) at a business reception in Turkey.
As a result, a number of Turkish businessmen vowed to visit Cambodia “soon”, to gain a better understanding of possible opportunities for new ventures, which could lead to collaborative agreements with local enterprises, according to Heng.
He also used the occasion to put in a plug for the CCC, saying that his chamber has considerably propped up private businesses in recent years and solved many of the issues they face, which he believes has reinforced the level of confidence among local investors needed to actively seek to attract their foreign peers to the Kingdom.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, hailed the number of new investment projects as a “good starting point” for 2022, in spite of the lingering Covid-19 crisis.
He ascribed the figure to the assortment of the Kingdom’s bilateral and regional free trade agreements (FTA), which he pointed out were achieved through the efforts of the Ministry of Commerce and relevant ministries, as well as cooperation between the CDC and local businesses to bring in foreign investment.
Vanak also cited other major factors such has political stability, better macroeconomic governance, new investment laws and other facilitation measures, and the government’s vaccination policy, all of which he says have delivered a major confidence boost for investors.
He told The Post that Cambodia benefits from preferential trade arrangements like the EU’s Everything But Arms (EBA) scheme and the US’ Generalised System of Preferences (GSP), which “give investors hope in the production of their goods intended for export to Europe, the US, and adjacent areas”.
Meanwhile, the government has drafted official roadmaps for the development of the automotive and electronics sectors in Cambodia, to create more than 22,000 new jobs and raise exports past $2 billion over the next five years, the CDC reported early this month.
Initiated in February 2021, development of the instruments was led by the CDC, with involvement from the finance, land management, industry, commerce, labour, energy, and public works ministries, with support from the UK government’s Accelerated Covid-19 Economic Support (ACES) programme, and in partnership with the Boston Consulting Group (BCG), the CDC said.