Seventy-five private investment projects outside of special economic zones (SEZ) were approved by the Council for the Development of Cambodia (CDC) in the first eight months of 2021, down by nearly 30 per cent year-on-year, the Ministry of Economy and Finance reported.
The report presented an overall glum picture for new investments in non-SEZ projects, with new ventures approved by the CDC in January-August involving a total capital investment valued at $1.106 billion, tumbling by 52.5 per cent year-on-year, and expected to create 57,000 jobs, shrinking by 32.3 per cent on a yearly basis.
Cambodia Chamber of Commerce vice-president Lim Heng accredits the decline in new such projects to Covid-prompted restrictions related to trans-border human movement.
These include considerably long quarantine periods that stymie the process of studying markets and selecting sites for potential ventures, resulting in bottlenecks in investment procedures, he said.
He told The Post on October 11 that Cambodia is expected to reopen its economy soon, and reduce the mandatory quarantine period for vaccinated arrivals. Prime Minister Hun Sen has suggested seven days as the new length of quarantine.
Heng said these plans “will open up more opportunities for investors to come to Cambodia and enable an increase in investment applications, as well as underpin a recovery in approvals by the competent authorities”.
This expected upswing in investment will be all the more pronounced starting early next year, when a number of regional and bilateral free trade agreements are set to come into force, he surmised.
However, Heng cautioned that taking too long to manage a successful economic reopening would only pose more challenges.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, emphasised that the Covid-19 crisis had damaged investor confidence in aspects related to health safety, leading to an apparent downturn in investment applications, especially in the wake of the February 20 community event.
He affirmed that health safety concerns and the uncertainty of the future market demand have delayed many investment plans, contending that Sino-US tensions have made a considerable number of people reluctant to invest anywhere in the world.
Investment in Cambodia will return to growth in the near future as “recent achievements of the Cambodian government” enter into force, Vanak said, alluding to new trade deals involving the Kingdom, as well as the recently passed investment and public-private partnership laws.
These, he said, “will be a major force in attracting large-scale international investors to invest in Cambodia, especially after the situation of Covid-19 eases”.
Citing observers, Vanak said a range of sectors currently stuck in a Covid rut would soon start to grow again, offering tourism, industry, real estate and construction, and technology as examples.