Surge in investment projects aims for growth, job creation
CAMBODIA approved 268 investment projects with a total capital investment of nearly $5 billion in 2023 –an increase of more than 20% compared to 2022 – with green-lighted ventures expected to create more than 300,000 jobs, according to the Council for the Development of Cambodia (CDC).
The council approved 247 new projects and 21 production expansion projects, of which 71 are endeavours in special economic zones (SEZs). The undertakings represent a total capital investment of $4.9 billion and are expected to generate about 307,000 jobs, according to its January 3 press release.
The number of investment projects in the industrial sector accounted for about 92%, with approximately 46% of the capital investment coming from the sector.
Infrastructure, which accounted for only 2.6% of total projects, contributed to about 44% of investment, due to the nature of financing in the sector requiring substantial amounts of funding.
The flow of private investment in 2023 rose markedly by around 22% compared to 2022.
Chea Vuthy, deputy secretary-general of the CDC’s Cambodian Investment Board (CIB) and Cambodian Special Economic Zone Board (CSEZB), noted at a recent business forum that the country boasts economic potential, peace, security and political and economic stability.
He emphasised the crucial role of the private sector in driving national economic development.
“We see that foreign direct investment [FDI] annually approaches $4 billion. In 2020, ASEAN experienced a steep 40% decline, but our FDI remained stable at around $3.6 billion,” he said.
Vuthy added that Cambodian investors took the lead in the first half of the year, buoyed by confidence in the country’s investment climate and “trust in its leadership”.
The Kingdom stands at the forefront of FDI in Southeast Asia, anticipating a robust influx of capital in 2024, buoyed by a solid economic recovery.
The International Monetary Fund (IMF) projects the country’s growth to reach 6.1% in 2024, as highlighted in the annual
FDI Standouts Watchlist from fDi Intelligence, the industry analysis division of the Financial Times (FT) Group, released in mid-December.
The report underscores that the study, evaluating the macroeconomic and FDI trends of the world’s top 50 FDI destinations using data from the IMF and fDi Markets, identifies countries poised to enter the new year with strong momentum, as the world continues to navigate an uneven post-pandemic recovery.
“Asia has performed admirably in this year’s Watchlist, with six countries in the top 10: Cambodia, leading the list, followed by the Philippines, Iraq, Kazakhstan, Azerbaijan
and India. Only three African countries feature in the top 10: Kenya, Namibia and Morocco. Serbia is the sole country outside Asia and Africa to secure a spot in the top 10, ranking ninth,” the report stated.
According to the CDC, most of the capital investment flows in 2023 came from China and local sources, contributing nearly 90% of total investment.
Most projects are located in Kampong Speu province, Phnom Penh and the provinces around the capital, including Kandal and Takeo, as well as some provinces with SEZ development such as Svay Rieng on the Vietnamese border and coastal Preah Sihanouk , as per the CDC.