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Cambodia: FDI flow drops 50 percent Jan-May
Foreign direct investment (FDI) fell 50 percent Jan-May from the same period in 2020, according to the Ministry of Economy and Finance. Investment projects for the first five months of 2021 were valued at $825 million, a 59 percent drop from results for the same period in 2020. The projects are expected to create 30,000 local jobs.
The huge drop was attributed to the pandemic but key insiders expect a recovery in FDI as the vaccination rate grows and the new investment law is drafted. Lim Heng, vice-president of the Cambodia Chamber of Commerce, is optimistic about growth on the strength of the new investment law.
“The law can boost economic growth, the production chains of small and medium enterprises (SMEs) and attract more foreign direct investments,” Heng said yesterday.
The new draft is on the agenda of the upcoming plenary session of the Council of the Ministers scheduled for Friday. The current investment law was approved and ratified in 1994.
The updated law has been timed to launch in conjunction with bilateral trade deals with China and South Korea moving to full ratification and signing status respectively, as well as to accelerate the pace of trade negotiations with India, Japan and the Eurasian Economic Union. It could also spark momentum towards the multi-country ratification of the RCEP agreement.
Asked about fair treatment between local and foreign investment, Heng stated the law will level the playing field regardless of investors’ countries of origin.
In 2020, 238 approved investment projects, inside and outside special economic zones (SEZs), totalled $8.2 billion. This figure represented a 12 percent decrease compared with 2019 results.
Source: https://www.khmertimeskh.com/889495/fdi-flow-drops-50-percent-jan-may/