Members of Phnom Penh’s business community said Wednesday they are pleased with the preliminary election results, and that a CPP-led coalition government will be attractive to potential foreign investors.
“Basically, investors will heave a sigh of relief,” said Craig Martin, executive director of the International Management & Investment Consultants Ltd. “There were lots of rumors [before the elections] but those fears have been allayed.”
Many potential investors cited the elections as the reason for delaying their projects, but the relatively peaceful polling and praise by observer groups and Asean will help eliminate several barriers, Martin said.
The positive reaction from the European Union is good, he said, because the garment industry has a large European export business due to Cambodia’s trade privileges. And the likelihood of entry in Asean “is good for marketing” and will give investors more confidence when they have to sell Cambodia to their home countries’ boards of directors, he said.
Demands by opposition parties for vote recounts will not have any immediate effect on investors, he said.
“The business community is quite relaxed with the results,” said one Western investor, speaking on condition of anonymity. “There is a coalition government, Hun Sen is still prime minister.”
John Harper, restaurateur and manager of United Distributors Cambodia, agreed. “I am relieved and delighted,” he said.
Harper said he has had numerous inquiries from potential foreign investors for construction and manufacturing projects for domestic consumption, and believes some could make commitments as early as September.
“A lot of people will wait until a new government is formed…and new policies issued” on taxation, import duties and investment law, Harper said.
Investors and analysts, however, noted that investor confidence will hinge on competent people getting the key ministerial posts of Finance, Commerce and the Cambodia Investment Board.
The pace of investment slowed considerably in the first half of 1998. The Council for the Development of Cambodia approved $147 million worth of projects during the first six months of this year, compared to nearly $400 million in the first half of 1997. Analysts have blamed the slowdown both on the regional economic crisis and political uncertainties in Cambodia.
While the majority of investment projects have been garment manufacturing operations, several multinational companies decided this year to set up in Cambodia, including the Swiss corporation Nestle and the German electronics giant Siemens.
