[LIFT MAGAZINE]
Over the past few years, Cambodia has attracted investors from many
Asian countries, including China, Vietnam and South Korea. With the
government’s push to bring development to Cambodia, local investment and
foreign direct investment are both on the rise.
Economic
analysts and investment experts agree that the increased appeal of
Cambodia to local and foreign investors can be attributed to increased
security and improved infrastructure.
According to Youn Heng,
director of the Evaluation and Incentive Department at the Council for
the Development of Cambodia, the government has employed a number of
strategies to try to attract investment. Along with improving power
grids and paving roads, the government has implemented a package of
favourable tax laws that acknowledge investors’ difficulties and try to
help find solutions.
“It is a very good strategy to attract investors to run their businesses in Cambodia,” Youn Heng said.
Youn
Heng remarked that there was no racial discrimination in the approval
process. Although the government attempts to reduce their tax burden,
foreign investors are still denied the right to own property afforded to
local investors.
With regard to attracting both local
and international investments, independent analyst Kang Chandararot
claims there are two important strategies: (1) building Cambodia’s
infrastructure to assure a more stable investment climate; and (2)
creating laws that make investment in Cambodia easier and more
profitable.
As we have seen, both strategies are being implemented nationwide to help investments run smoothly.
Kang
Chandararot added that security is another important element to keep in
mind. If our country ceases to be peaceful and descends into chaos,
investors will be dissuaded from running their businesses here. We
should therefore work actively to maintain peace and safety in our
country in order to maintain investor confidence.
Kang
Chandararot remarked that China used to be interested in Cambodia’s
garment sector but has since changed its focus to mining, power and
agriculture. Their areas of investment are dictated by the vision of
their investors, that is, which sectors they believe to be most
profitable.
“The most important investors in Cambodia are the
countries of China and Korea, as they have pumped the most money into
our economy,” explained Kang Chandararot. He also noted that, while not
yet investing at the level of other Asian countries, Vietnam will
become an increasingly important investor in the future. Because of its
many current and potential investment partners, the Cambodian economy
is growing every day.
Still, at present, many countries that
feel deeply about protecting human rights and fighting corruption have
resisted investing in Cambodia, choosing instead to donate and provide
aid.
Cheam Yeap, chairman of the Commission on Economy, Finance,
Banking and Audit of the National Assembly, said every investment, both
local and international, needed to abide by the national investment
law. The Cambodian investment law in question has been amended six
times since its creation in 1999.
“The government has cleared the way for investors to invest in Cambodia,” said Cheam Yeap.
However,
some critics contend that more and more foreign investment increases
the risks of Cambodians losing land and property.
Cheam Yeap
denies these claims, emphasising that Cambodia has proper laws. “We
have land authorities, courts and village and commune chiefs. The rule
of law allays any fears that we will lose land,” he claimed, adding: “We
will not allow foreigners to own Cambodian land, and we will not allow
them to invest without checking their balances.”
He went on to
explain that since modern Cambodia was more open to local and foreign
investors, some people were simply afraid of losing out. He provided
China as an example of a country that is benefiting from its investments
in Cambodia, especially in the hydro-electricity sector.
By
2015, Cambodia is slated to reap 1500 megawatts of electricity from
Chinese investments at a very competitive price. 300 megawatts will be
used in Phnom Penh, with the rest sent to other provinces throughout
the country.
Cheam Yeap said there were many foreign countries
that had not yet invested in the Cambodian economy. He reasoned that
these countries had not invested because of the global economic
downturn, as well as their weariness over economic protests in Cambodia.
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