Effective management of the Covid-19 crisis in Cambodia has led to an increase in the number of government-approved investment projects outside the Kingdom’s special economic zones (SEZ) in the first two months of 2022, with a total capital investment of “more than $2 billion” – a more than threefold increase from the year before, according to a new report from the Ministry of Economy and Finance.
Released on April 18, the report said that in the first two months of 2022, the investment situation showed a “slight” improvement, with private investment projects outside of the SEZ approved by the Council for the Development of Cambodia (CDC) – the highest decision-making body of the Kingdom for private and public sector investment – totalling 35 projects, up from 21 last year, with investment increasing 236.5 per cent year-on-year.
With a total capital investment stated in the report as being worth “more than $2 billion”, the projects are expected to create around 31,000 jobs.
The ministry said that Cambodia’s economy has “gradually begun to recover”, but noted that it has yet to return to pre-pandemic levels.
“Overall, in 2022, the Cambodian economy is expected to continue to grow positively due to the expectation of increasing global demand and the confidence of foreign investors, which is the result of [the country] having controlled the Covid-19 outbreak,” the ministry said.
As part of its recovery from the Covid-19 crisis, the government has introduced a number of new strategies for the Kingdom’s key economic drivers: the tourism and agricultural industries as well as the manufacturing sector – both garments and non-garments.
Cambodia Chamber of Commerce vice-president Lim Heng echoed the ministry’s view that effective control of the virus, alongside the country’s high vaccination rate, has led to economic recovery.
But he also highlighted two major trade pacts – the bilateral Cambodia-China Free Trade Agreement (CCFTA) and the Regional Comprehensive Economic Partnership (RCEP) – coming into force as key factors, as well as the subsequent launch of new investment laws at the end of 2021 leading to increased domestic and foreign investment.
He noted as well that Cambodia has been eking out market share in a number of sectors from crisis-hit neighbour Myanmar.
“The number of companies applying for investment in Cambodia will increase in the future, as the Kingdom is ready to receive more investment growth,” he said.
Royal Academy of Cambodia economics researcher Ky Sereyvath said the increase in CDC-approved investment projects indicates that investment in Cambodia is “beginning to recover” from the Covid-19 crisis, while noting that any and all investment would be beneficial to Cambodia’s economic growth.
“Recent investments will help create more jobs and boost the flow of production costs,” he said.
Minister of Economy and Finance Aun Pornmoniroth said in December that the socio-economic crisis induced by Covid-19 has given Cambodia “a lot of experience”, especially in the development of new strategies to expand the range of areas classified as economic growth drivers.
He said that lessons learned from the crisis have led to “sweeping reforms” aimed at increasing economic diversification and “enhancing competitiveness”, as well as “strengthening resilience” for long-term, sustainable economic development “in a context where the world operates in an interactive manner, with global markets becoming more interdependent”.
“The strength [of reforms] will be a catalyst and an important driver for the recovery and promotion of Cambodia’s economic growth,” he said.
Data from the finance ministry shows that in 2021, the CDC approved a total of 108 private investment projects outside SEZs – down from 154 projects in 2020, with total capital investment of $1.719 billion, a decrease of 72.6 per cent.