The government approved $5.2 billion worth of investment in the first half of 2019, a 48.5 percent hike compared to the corresponding period last year, with officials claiming the figure reflects investors’ growing confidence in the country.
The latest data regarding investment in Cambodia was presented yesterday during a press conference to mark the achievements of the government one year after the general elections.
According to the data, compiled by the Council for the Development of Cambodia (CDC), total investment in H1 was spread among 153 projects. Agriculture, agro-industry, and garments accounted for 134 of those projects, worth a combined $920.6 million.
The tourism industry welcomed 11 projects ($3.7 billion), while infrastructure attracted three projects ($424.6 million).
Presenting the findings, Ek Tha, spokesman for the office of the Council of Ministers, said, “The main factors contributing to this influx of investment is the country’s political stability and the sound macroeconomic management.”
He added that, “Following the peaceful general elections, investors continue to have confidence in the elected government.”
He said the garment and footwear sector continues to thrive, partly as a result of exports of travel goods to the United States which are “in good shape”.
“There is no sign that the sector will slow down any time soon,” he said.
Kaing Monika, deputy secretary general of the Garment Manufacturers Association in Cambodia (GMAC), said that the rise in FDI reflects investors’ confidence in the country’s political stability and in the reforms implemented by the government.
He said that, as an emerging market experiencing tremendous economic growth, Cambodia remains very attractive for investors in the services and real estate sectors, among others.
“As we move forward, we need to compare ourselves with other countries in the region in term of competitiveness. Who is moving faster? We need to create more pull factors (internal strengths) than push factors (external ones). Some areas still need improving, like logistics costs,” he said.
He cautioned that raising the minimum wage is an issue that needs to be handled with great care, as Cambodia remains a production base for contracted manufacturing companies.
Mey Kalyan, senior advisor to the Supreme National Economic Council, said the government should consider prioritising the growth of local enterprises over attracting foreign investment.
“The country should have a policy that protects local enterprises from FDI,” he said, adding that the policy should address how to deal with the growing amount of investment coming from China.
Of the $5.2 billion invested in the country, local investors account for 68.4 percent, while China is responsible for 25.4 percent. They are followed by the British Virgin Islands (2.85 percent), Thailand (1.26 percent), and England (0.5 percent).
The Central Bank projected this week that the economy will grow at a rate of 7.1 percent in 2019 on the back of strong growth in the export, construction, real estate, and tourism sectors.