June 6, 2023
PHNOM PENH – The Council for the Development of Cambodia (CDC) notices issued in the January-May period reveal that the government agency approved 61 new private investment projects – both inside and outside of special economic zones (SEZ) – totalling $516.64 million and set to deliver an estimated 76,310 jobs.
The two totals – for investment capital and jobs expected to be created – were computed by The Post from statistics that were provided individually. Due to rounding, the actual numbers may vary.
These projects span a wide range of industries, including garments, footwear, travel goods, solar panels and electronics, tourism, cattle rearing, agro-industry and -processing, cardboard and packaging materials, sporting goods and furniture.
Speaking to The Post on June 4, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng voiced delight that the Kingdom can still bring in plenty of fresh investment despite the global economic challenges and uncertainties of the past three years or so.
According to him, Cambodia’s top investment draws include political stability and strong economic growth; favourable investment laws, geographical location, labour market situation and infrastructure system; and preferential tariff treatment from the US, China, South Korea, Japan and European countries.
Additionally, the Kingdom has also profited by embracing enterprises that have relocated as a result of trade disputes between major economies, he said.
“As the economic and political climate around the world improves, so too will investment by local and foreign players in Cambodia,” he predicted. “Such direct investment is very important for the health of the economy since it boosts the Kingdom’s ability to export finished products, in addition to creating jobs.”
He said the free trade agreements (FTA) that Cambodia has struck with key trading partners, including the treaties with China (CCFTA) and South Korea (CKFTA) as well as the Regional Comprehensive Economic Partnership (RCEP) are also aiding in the Kingdom’s efforts to draw in more foreign investors.
In a previous interview, Federation of Associations for Small and Medium Enterprises of Cambodia (FASMEC) president Te Taingpor argued that the investment allure of the Kingdom could be even more potent if electricity prices were brought down to or below the levels offered in nearby countries.
Lower electricity prices generally mean lower production costs for energy-intensive businesses, which would give them an edge to successfully compete on the international stage, he said.
“Prices for fuel and electricity are key aspects of the appeal to investors, as these are important inputs for manufacturing, along with raw materials and labour. When these rates are stable and low, investors will see opportunities,” Taingpor said.
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), rising by 11.2 per cent from the nearly 152 trillion riel recorded by end-2020.
Broken down by sector, finance accounted for the lion’s share at $9.4 billion or 22.9 per cent, followed by manufacturing ($8.5 billion; 20.8%), real estate ($4.9 billion; 12%), hotels and restaurants ($4.4 billion; 10.7%), agriculture ($4.2 billion; 10.3%), electricity ($2.6 billion; 6.2%) and construction ($1.6 billion; 4.1%), while other sectors comprised $5.3 billion, or 13 per cent.