Domestic Capital Leads Investment in Cambodia for H1, Diverse Projects Approved

Cambodian investors led the charge as the largest source of capital for new projects in the first half of the year, beating out investors from China, Singapore and Malaysia. According to a July 14 statement from the Council for the Development of Cambodia (CDC), a total of 276 investment projects were registered by the CDC and Provincial-Municipal Investment Sub-Committees during the period. They represent a combined investment value of approximately $4.7 billion and are expected to create as many as 160,000 jobs. Among the more diverse projects were a $40 million monkey breeding facility in Kampong Thom province and a $300 million five-star hotel in Bavet, Svay Rieng. Investors from Cambodia contributed 41.74% capital, followed by China, at 35.75%, Singapore, at 15.38% and Malaysia, with 4.26%. Other sources of investment included the Netherlands, the British Virgin Islands, the Marshall Islands, Samoa, Japan and the US. The CDC said that 181 of the projects, with an investment value of approximately $4.4 billion, were registered directly by the CDC. They comprised 69 investment projects within existing Special Economic Zones (SEZs), 105 projects outside SEZs and seven new SEZ development projects. During the same period, 95 projects were registered by Provincial-Municipal Investment Sub-Committees, representing investment worth approximately $291 million. According to the CDC, the approved projects included plantations and processing facilities for cashews, mangos, bananas and black ginger, as well as fisheries products. They also included the expansion of a cement plant and manufacturing plants for solar, wind and biomass power generation plants; a tire and inner tube manufacturing plant; a paper mill; and an electric vehicle assembly plant. Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), told The Post on July 15 that despite the uncertain global economic environment and the border tensions caused by Thai military action, Cambodia has continued to demonstrate its ability to attract new investment. He said the increase in applications and CDC approvals was driven by several factors, including the continued implementation of Cambodia’s bilateral and multilateral free trade agreements with countries around the world, the government’s investor-friendly policies and the availability of a skilled workforce. “Cambodia’s strategic geographic location and these advantages have made the country increasingly attractive to both investors and international tourists,” he said. Heng noted that one particularly encouraging trend in recent months has been the growing diversity of projects approved by the CDC. “What stands out recently is that the projects approved by the CDC have become remarkably diverse, covering light, medium and heavy industries. At the same time, the increase in domestic investment also reflects the resilience and strength of the Kingdom’s economic growth,” he added. Heng explained that such diversified investment should make Cambodia’s economy more resilient because difficulties in any one export sector would be less likely to disrupt the country’s overall economic performance. According to him, the continued implementation of Cambodia’s free trade agreements with countries around the world, together with increasingly diversified investment, is also helping reduce Cambodia’s heavy reliance on preferential trade schemes that the country could eventually lose, such as the Everything But Arms (EBA) initiative and the Generalized System of Preferences (GSP).