Annual Infrastructure Spending Must Top $500M, PM Says

Cambodia will need to spend between $500 million and $700 million annually on infrastructure to maintain its current rate of economic growth, Prime Minister Hun Sen said on Thursday, giving a special mention to China for its recent investments.

Speaking at the inauguration of a more than 40-km stretch of National Road 6-A, linking Phnom Penh’s Chroy Changva district to Kompong Cham province’s Batheay district, Mr. Hun Sen went out of his way to thank China, which provided about $68 million of the $70 million needed for the project via concessional loans.

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Prime Minister Hun Sen cuts a ribbon at the inauguration of National Road 6-A linking Phnom Penh to Kompong Cham province’s Batheay district on Thursday, in a photograph posted to his Facebook page.

“The policy of infrastructure development remains the top priority of the CPP in running the country,” he said. “Good infrastructure gave us the opportunity to fully achieve economic growth at 7.7 percent over the past 20 years.”

The prime minister said he would pay a visit to China next month for a “One Belt, One Road” economic conference, and hoped that Beijing would provide grant funding for a new national road connecting Battambang province’s Samlot district to Pursat, Koh Kong and Preah Sihanouk provinces.

Chinese President Xi Jinping pledged about $600 million in investments in June, and another $237 million in aid in a visit in October. Mr. Hun Sen has said he appreciates that China’s largesse comes without the human rights conditions of Western donors, whose aid has now been eclipsed by Beijing.

Critics say there is little oversight of how China’s money is spent, but that the funding requires Cambodia to toe China’s line in foreign policy interests such as the South China Sea territorial dispute.

Miguel Chanco, lead regional analyst for the Economist Intelligence Unit, a research firm, said that Cambodia needed infrastructure investments, particularly for its electric grid.

“According to the World Bank’s most recent Logistics Performance Index, Cambodia has the third worst infrastructure environment in ASEAN,” he wrote in an email. “It isn’t that far ahead from conflict-ridden Myanmar…which speaks to how much more infrastructure development Cambodia needs despite its rapid pace of growth in recent years,” he said, using another name for Burma.

Of the country’s energy needs, he added: “Electricity prices in Cambodia remain very expensive compared with its ASEAN neighbors, and the country remains highly dependent on imported power.”

(Additional reporting by Ben Paviour)

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