Approvals of new business investment in Cambodia have continued at a record pace in 2005, according to newly obtained data from the Council for the Development of Cambodia.
A preliminary report on investment through Oct 31 shows approvals for projects approaching $1 billion in fixed assets.
The CDC has unofficially approved $976 million worth of investments, with $621 million of that coming as foreign direct investment. The potential job creation from these investments is pegged at 82,350, according to the CDC.
In 2004, $216 million worth of investment projects were approved involving $141 million in foreign direct investment In 2003, FDI was $63 million; in 2002 it stood at $145 million and in 2001 at $140 million.
A CDC official, speaking on condition of anonymity, said that the October report is not yet official, but finalized September data also show high levels of investment.
Through September, the official said, $631 million in projects had been approved, including $442 million in FDI. “I have seen that FDI increased 2.7 times compared to the same period last year,” the official said of the September figure.
In the October report, China remains the top investor with $442 million, followed by Thailand with $66 million and Taiwan with $41 million. A single $200 million Chinese oil refinery projecte in Sihanoukville makes petroleum the lead investment sector, followed by mining, cement, garments and tourism.
The report lists 41 garment factory investments this year, a sign of increased confidence in an industry that one year ago contemplated the end of worldwide garment quotas with dread. The official said 19 of the investments are expansions.
Economist Kang Chandararot, director of the Cambodia Institute for Development Study, warned that approved projects often fall through in Cambodia.
“The figure that is approved by the CDC, only between 40 percent to 50 percent materialize. That is the important figure to know,” he said. He added, however, that 2005 is turning out to be a very positive one for business.
“In the first ten months of this year, the situation looks positive for garments and the whole economy,” he said. “We opened the borders, we joined WTO and the garment factories survived.”
