The government approved a total of 113 private investment projects worth $2.3 billion in the first eight months of this year, the Ministry of Economy and Finance reported.
This is 22 projects, or 16.3 per cent, fewer than the same period last year, and represents a staggering 57.1 per cent drop in capital investment, it said.
The projects created 84,432 new jobs, but this was a 51.5 per cent year-on-year slip, it added.
Offering a silver lining, the ministry pointed out that there were eight industrial investment projects approved this year.
It defined “private investment projects” as non-special-economic-zone projects that are authorised by the Council for the Development of Cambodia, which is the highest decision-making level of government for private and public sector investment.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post on Thursday that the decline was largely due to Covid-19 lockdown restrictions in other countries that prevent investors from entering Cambodia.
On the bright side, he said, the government this year rolled out the Single Portal online business registration system which greases the wheels for investors wishing to do business in Cambodia.
“Granted, the decline in registrations for new investment projects is a concern for Cambodia, but I am confident that after the world gets their hands on official Covid-19 vaccines, the number of companies investing in Cambodia will recover,” Heng said.
With its recently-signed bilateral free trade agreement (FTA) with China and similar deals with other countries firmly on the cards, he voiced his hopes that investment figures would be back in the green soon.
He said a comprehensive national safety net had been put in place to prevent Covid-19-induced bankruptcies.
“The government has rolled out a steady stream of measures to encourage and support those suffering from the effects of Covid-19.
“The government’s introduction of Industrial Development Policy 2015-2025 is a source of pride for us and has been a driver of industrial growth. I hope the superior new investment law [which is on track to be approved] next year will further entice more investors to Cambodia,” Heng said.
Royal Academy of Cambodia economics researcher Hong Vanak listed other culprits behind the disappointing investment statistics – regional geopolitical issues, the ongoing Sino-US trade disputes and the EU’s 20 per cent withdrawal of its ‘Everything But Arms’ (EBA) trade scheme.
“Apart from Covid-19 concerns, the South China Sea dispute and the EBA conundrum have also delayed some investment decisions in Cambodia,” he said.
He expressed his confidence that Cambodia will have a better shot at reeling in investors to set up in the Kingdom if it can leverage its geopolitical situation and capitalise on its FTA with China.