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New non-SEZ projects drop 31.4%

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Council for the Development of Cambodia. Heng Chivoan

New non-SEZ projects drop 31.4%

The Council for the Development of Cambodia (CDC) issued final registration certificates for 83 new private investment projects outside of special economic zones (SEZ) in the first nine months of 2021, a drop of 38 projects or 31.40 per cent year-on-year, the Ministry of Economy and Finance reported.

These projects involve a capital investment of $1.135 billion, sliding by 80.6 per cent year-on-year, and could create about 64,000 new jobs, down by 33.5 per cent from the same period in 2020, the ministry said in its latest Socio-Economic Trends Report.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on December 26 that the decline was driven by Covid-19 safety concerns, which slowed down and delayed plans for larger projects.

This unease greatly prevented investors from visiting projects and potential sites, conducting in-detail studies, and preparing the extensive checklist of documents required to get started, he said.

However, he argued that the dip in new projects was not inherently bad news. If larger investments employ modern technologies and stay away from garments, this could represent diversification, he added.

"If this is the case, I think it will be better because it will make Cambodian production more diverse, with higher quality standards and more advanced technology," Vanak said.

He predicted that the number of new investment projects would return to growth next year, buoyed by the country’s reopening last month, new investment laws and recently-penned trade agreements that he said would generate greater interest among investors in the Cambodian market.

Speaking at the closing ceremony of the ministry’s annual review meeting on December 23, Minister of Economy and Finance Aun Pornmoniroth pegged economic growth at three per cent for this year, up from a 2.4 per cent mid-year forecast.

He chalked up the revision to high coronavirus vaccination rates and associated level of herd immunity, the end of the third wave or “February 20 community event”, the national reopening and the restoration of socio-economic activities.

"With these positive developments and trends, medium-term economic growth is projected to continue to recover rapidly, driven by expectations of rising global demand and foreign investor confidence, as a result of the good management of the situation of the Covid-19 epidemic,” Pornmoniroth said.

An example of that management is “the implementation of the strategic framework and programmes to restore and promote Cambodia's economic growth, to live with Covid-19 in the ‘new normal’ for 2021-2023”, he noted.

These “will strengthen the Cambodian economic poles, which were negatively affected by the Covid-19 crisis, as well as the development of new economic poles with potential, to accelerate recovery and lift Cambodia's economic growth back to its potential growth path", he said.

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