Prime Minister Hun Sen visited the Sihanoukville Special Special Economic Zone (SSEZ) on May 22. SPM
The Council for the Development of Cambodia (CDC) notices issued in the January-June period reveal that the government body approved 91 new private investment projects – both inside and outside of special economic zones (SEZ) – valued at a total $924.24 million and set to deliver an estimated 108,810 jobs.
The two totals – for investment capital and jobs expected to be created – were calculated by The Post using statistics that were provided individually. The actual figures may differ due to rounding.
Major projects were in car tyre and cement manufacturing, agricultural processing and tourism development. Other ventures covered a variety of fields such as garments, footwear, bags and travel goods; solar panels and electrical/electronic equipment; furniture; sports gear; cardboard and packing materials; agro-industry; cattle farming.
For comparison, the totals for the January-May period clocked in at 61 projects, $516.64 million and 76,310 jobs.
In a July 4 interview with The Post, Cambodia Chamber of Commerce vice-president Lim Heng claimed that the assertion that the Kingdom has become an all-around high-potential investment destination is supported by the fact that Cambodia is able to encourage the creation of as many businesses as it has.
The key factors attracting investment to Cambodia include its central location in ASEAN, favourable investment laws, a broad pool of competent labourers, a large range of raw materials, and most importantly, a sizeable international clientele.
Furthermore, Cambodia also has preferential tariff arrangements and trade agreements with major nations, which promote the Kingdom’s goods exports to those markets, he said.
“Despite these challenging times, Cambodia is still able to receive a steady stream of investment. I’m optimistic that when political and economic conditions across the world improve, Cambodia will attract even more investment,” he said, noting that new projects in the past couple of years have been more diverse and involved more advanced technologies.
According to Heng, more diverse investment will broaden Cambodia’s export market, reduce the Kingdom’s reliance on imports, and undergird the economy overall.
Royal Academy of Cambodia economist Hong Vanak said the nearly 100 CDC approvals in the first half of 2023 demonstrates the confidence that investors have in Cambodia’s political and economic situation, predicting that this figure will surge as the global economy recovers.
These investment projects are fuelling job creation, household incomes, and the broader economy, he stressed.
“Despite the closure of certain factories in Cambodia due to the global economic crisis, the number of new openings remains buoyant, which is encouraging for economic growth.”
According to a Socio-Economic Trends report published by the Ministry of Economy and Finance, the CDC last year approved 132 private investment projects outside of the Kingdom’s SEZs worth a total of $3.23 billion, up 87.9 per cent from $1.719 billion – through 108 ventures – a year earlier.
These projects were expected to create about 0.122 million jobs, up 35.9 per cent from 0.09 million in 2021. This amount is also roughly one-eighth higher than the estimated 108,810 jobs expected to be generated by the greenlit investment projects mentioned in the CDC’s notices issued between January and June this year.
Although the report did not provide concrete figures, pixel counts of the supplied graph suggested that services accounted for the lion’s share of the $3.23 billion in cumulative investment capital, at roughly 43-47 per cent, followed by industry (23-27%), tourism (14-17%), energy (10-13%), and agriculture (1-3%).
According to the National Bank of Cambodia (NBC), foreign direct investment (FDI) inflows into the Kingdom between August 5, 1994, when the old Law on Investment was enacted, and December 31, 2021 totalled 168.8 trillion riel ($41.0 billion), climbing by 11.2 per cent from the nearly 152 trillion riel recorded by end-2020.
The Greater China region was the largest investor in the Kingdom with $18.0 billion, or a 43.9 per cent market share, followed by South Korea ($4.9B; 11.9%), Singapore ($2.7B; 6.5%), Vietnam ($2.5B; 6.1%), Japan ($2.4B; 5.9%), Malaysia ($1.9B; 4.6%), Thailand ($1.8B; 4.4%), the UK ($1.4B; 3.4%), Canada ($1.1B; 2.8%) and the US ($0.9B; 2.1%).
For reference, the Greater China region typically denotes the territory encompassing mainland China, Hong Kong, Macau and Taiwan.
Broken down by sector, finance accounted for the lion’s share at $9.4 billion or 22.9 per cent, followed by manufacturing ($8.5B; 20.8%), real estate ($4.9B; 12.0%), hotels and restaurants ($4.4B; 10.7%), agriculture ($4.2B; 10.3%), electricity ($2.6B; 6.2%) and construction ($1.6B; 4.1%), while other sectors comprised $5.3 billion, or 13 per cent.
