Cambodian labourers work on a high-rise building construction site in Phnom Penh, taken on 10 March, 2022. Heng Chivoan
Cambodian investors accounted for more than half of the nearly $3.5-billion value of the projects approved by the Council for the Development of Cambodia (CDC) in the first nine months of this year.
The CDC, the government’s highest decision-making body for large-scale investments, reported that it approved 150 new projects and expansions in the January-September period with total registered capital of $3.45958 billion, up by 16 undertakings and about $0.101 billion compared to the same time last year.
Cambodian investors represented the lion’s share of the total registered capital for the nine-month period, at 50.94 per cent or $1.762 billion, followed by those from China (43.98 per cent), Thailand (1.27 per cent), Japan (1.14 per cent), with the Cayman Islands, Samoa, South Korea, British Virgin Islands, Singapore, Malaysia and Australia rounding out the list at less than one per cent each.
Broken down by sector, industry topped the rankings with 132 projects worth $1.3993 billion, followed by “infrastructure and others” (eight projects; $1.79115 billion), agriculture and agro-industry (seven projects; $104.874 million), and tourism (three projects; $164.250 million).
Speaking to The Post, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng identified two main factors that influence investors’ decisions to risk their money: confidence in government policies and market conditions.
With respect to the latter, Heng noted that Cambodian merchandise can be shipped to many countries under special tariff conditions, thanks to free trade agreements (FTA) and other arrangements.
“Investment from local players may prove to be more gainful for locals, since they tend to use local resources and avail new jobs,” he contended.
Royal Academy of Cambodia economics researcher Ky Sereyvath commented that the surge in domestically-owned investments signals acceleration in economic growth, fuelled by the associated uptrend in the percentage of profits recycled back into the local economy. He explained that, as a rule, foreign profits are more prone to leave host countries.
Illustrating one of the many risks involving foreign investors, Sereyvath noted that they may be quick to withdraw under exigent circumstances, which he said could cause significant economic and employment headwinds for the Kingdom.
“With a government policy that strongly supports domestic production, I am optimistic that local investment will improve down the line,” he said.
