Cambodia will have to wait at least another three years before it sees significant investment from Japan, a member of a Japanese trade delegation said Thursday.
“In this decade, very difficult,” said Yasunanga Takachiho, a Tokyo economist participating in a week-long fact-finding mission by Japan’s Engineering Consulting Firms Association. “In the next century, if the political situation is stable, then I think three years later Japanese [investors] will come.”
Other Southeast Asian countries are more attractive to investors in terms of infrastructure, well-trained labor and natural resources, he said.
Another obstacle, he said, is Cambodia’s relatively high cost of labor following the devaluations of currencies in countries such as Indonesia.
Japanese direct investment in Cambodia is minimal. Several large Japanese corporations, such as Sumitomo, have offices in Phnom Penh but few have any ongoing projects, Japanese Business Association President Shiseki Matsura said Thursday.
Most of the Japanese companies operating in Cambodia are trading firms, followed by general contractors, he said.
According to the Cambodia Investment Board, Japan invested $11.8 million between 1995 and 1997, accounting for less than 1 percent of foreign direct investment in Cambodia.
Takachiho said, however, that Cambodia still has potential to lure Japanese investors, especially because of its seaport and its location between Thailand and Vietnam.
And when regional currencies begin to strengthen against the dollar, Cambodia will be in a good position to compete against its neighbors, he said.
