The garments, footwear and travel goods sector accounted for many of the project approvals announced by the Council for the Development of Cambodia (CDC). Hong Menea
The Council for the Development of Cambodia (CDC) has in the first three months of this year announced its approval of final registration certificates for 41 projects with total capital investment of more than $2.39 billion that are expected to create 40,147 jobs.
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.
However, just four project approvals were announced in March, with total registered investment capital of over $13 million.
CDC notices show that most of the projects greenlit in the January-March period covered areas such as garments, footwear and travel goods; fruit processing; vehicle assembly; car tyres; hotels; hospitals; and shopping malls.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post on April 3 that applications for investment projects have not significantly slowed down for the duration of the Covid-19 pandemic, which emerged in end-2019.
He attributed this trend to policies designed to attract Cambodian investors, bilateral and multilateral free trade agreements (FTA) under the Kingdom’s belt, effective Covid-19 management, and Cambodia being “the fastest in the region” to reopen to foreign investors.
The aforementioned “geographical and strategic features” have drawn in loads of investors and tourists to the Kingdom, he said.
With a great deal of enthusiasm, Heng added: “And what’s special about the latest period – I’ve observed that the projects approved by the CDC were remarkably diverse, representing each of light, medium and heavy industry.”
He explained that a diverse mix of investments would best serve to stabilise the Cambodian economy, and provide a safeguard against stagnation should the export market falter.
More FTAs and a broader and more diverse range of investments will help curb Cambodia’s reliance on preferential tariffs that it could potentially lose down the road as its economy grows, such as those provided by the EU’s “Everything But Arms” scheme and the generalised systems of preferences (GSP) of different industrialised countries, he suggested.
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 FTAs – 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.
Data from the National Bank of Cambodia show that as of the end of the first quarter of 2021, foreign direct investment (FDI) in the Kingdom was worth $39 billion, with China accounting for the lion’s share at 44.2 per cent, followed by South Korea (10.6 per cent), Vietnam (6.3 per cent), Singapore (6.2 per cent) and Japan (5.8 per cent), with Malaysia, Thailand, the UK, Canada and the US also making up a considerable portion.
