Cambodia punches above its weight in attracting FDI

Cambodia, a lesser known FDI location in south-east Asia, must compete against the likes of Singapore and Vietnam to attract inward investment. Despite stiff competition it has managed to win more than its fair share of greenfield projects.

Cambodia performs impressively in Investment Monitor’s 2022 Inward FDI Performance Index. The index measures a country’s inward investment levels against its gross domestic product (GDP) using GlobalData’s FDI Projects Database, which tracks greenfield projects.

This means that Cambodia, with a score of 3.26, received more than three times its fair share of inward greenfield foreign direct investment (FDI) compared with what could be expected given its level of GDP. In that regard, Cambodia is punching well above its weight in FDI terms. Cambodia places third for FDI into Asia-Pacific based on the aforementioned index, attracting 15 projects in 2021. Singapore ranks first with an index score of 4.9 while New Zealand places second scoring 3.31.

FDI peaked in Cambodia in 2019, with GlobalData’s FDI Projects Database recording 43 projects. In terms of capital investment this represented a 15.5% increase on 2018’s figures, to $3.7bn, according to the UN Conference on Trade and Development’s 2020 World Investment Report. FDI experienced a step decline in 2020 due to the global coronavirus pandemic, with project numbers dropping by 65.1% to 18. Cambodia did not manage the same rebound from the pandemic as the wider Asia-Pacific region, which saw an average FDI increase of 21.2% in 2021. Instead, the total number of FDI projects in Cambodia in 2021 fell further to 15.

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