Experts Say Figures May Not Highlight a Trend in the Economy
Cambodia’s investment board approved $691.5 million worth of investment in March, though 67.9 percent of that figure was contained in one Chinese hydropower dam project planned for the lower Russei Chrum river in Koh Kong province, figures released this week by the Council for the Development of Cambodia show.
The total amount of approved – though not necessarily active – investment projects, excluding the dam, was $221.78 million, which was considerably more than the $41.5 million approved in February.
Analysts say that levels of approved investment tend to fluctuate dramatically from month to month due to the small size of Cambodia’s economy. While one large investment approval can send monthly figures rocketing skyward, the underlying level of active investments in the country may not actually change that much.
For example, the total amount of investment approved by the CDC last year amounted to $5.86 billion. Yet figures released by the World Bank last week show the total amount of capital injected into the economy to have reached just $515 million in 2009.
Though pledged on paper, the amount of capital a company actually invests in the country can remain in the air for years after Cambodia’s investment board approves the project.
“It is indicative of the willingness, or interest to invest in Cambodia,” Chan Sophal, president of the Cambodian Economic Association, said of the CDC figures. “Some proposals need to raise funding down the years,” he said.
Eric Sidgwick, senior country economist for the Asian Development Bank, also expressed a degree of caution about figures on approved investment while speaking at a Tuesday press conference on a periodic economic forecast.
“It’s not because investment approvals are up in one month that it’s a sign of a trend,” he said. “A lot of the approvals don’t actually materialize over time,” Mr Sidgwick said.
The 14 projects approved by the Cambodian Investment Board in March included three garment factories with investors from Hong Kong, the US and Britain, a shoe-manufacturing factory from Taiwan and three agro-processing firms made up of investors from China, Vietnam and Cambodia.
Approved investments also included an $85.78 million project by Australian firm Toll Holdings, which has an operational concession for the rehabilitation of Cambodia’s railway network.