Foreign Direct Investment Pledges Up Dramatically
By Kay Kimsong and Erik Wasson
THE CAMBODIA DAILY
More than $1.1 billion in foreign direct investment has been pledged in the first half of 2006, up from $449 million pledged in the first six months of 2005, according to figures released by the Council for the Development of Cambodia on Wednesday.
When domestic investment is included, some $2.3 billion has been committed, more than double the $1.1 billion pledged in all of 2005.
The statistics cap an upward trend that has seen pledges of FDI increase from $63 million in all of 2003 to $141 million in 2004.
This year, however, the rosy figures are heavily dependent on a single construction project. Ninety percent of the FDI, or $988 million, comes from one South Korean company that has promised to build a new satellite city on land created from the controversial filling in of Phnom Penh's Pong Peay lake.
The Cambodian and South Korean joint venture, World City Co, will invest a combined $2.1 billion in the project, which is expected to take 10 years to complete, officials have said.
The filled-in portions of Pong Peay lake in Russei Keo district belong to local business tycoons Kok An and Suon Kamnouen, officials have said.
It is unclear how the lake, which was previously a state-owned body of water, was made tthe private property of businessmen.
Phnom Penh Deputy Governor Pa Socheatvong, who is in charge of the project, declined comment on Wednesday.
The new statistics also reveal that pledges of investment in agriculture projects have overtaken garments.
In all of 2005, there were pledges of $118 million in the garment sector and only $17 million for agriculture. For the first half of 2006, $185 million has been pledged in agriculture and only $37 million pledged in garments and textiles.
Minister of Agriculture Chan Sarun said the trend reflects growing foreign interest in agro-industry, driven in part by the demand for bio-fuels to replace high-priced petroleum.
Tan Monivann, vice president of the commodities firm Mong Reththy Group, said the government has done more to encourage investment in agriculture this year.
Economists have long noted that pledges made to the CDC do not always translate into actual investment.
When domestic investment is included, some $2.3 billion has been committed, more than double the $1.1 billion pledged in all of 2005.
The statistics cap an upward trend that has seen pledges of FDI increase from $63 million in all of 2003 to $141 million in 2004.
This year, however, the rosy figures are heavily dependent on a single construction project. Ninety percent of the FDI, or $988 million, comes from one South Korean company that has promised to build a new satellite city on land created from the controversial filling in of Phnom Penh's Pong Peay lake.
The Cambodian and South Korean joint venture, World City Co, will invest a combined $2.1 billion in the project, which is expected to take 10 years to complete, officials have said.
The filled-in portions of Pong Peay lake in Russei Keo district belong to local business tycoons Kok An and Suon Kamnouen, officials have said.
It is unclear how the lake, which was previously a state-owned body of water, was made tthe private property of businessmen.
Phnom Penh Deputy Governor Pa Socheatvong, who is in charge of the project, declined comment on Wednesday.
The new statistics also reveal that pledges of investment in agriculture projects have overtaken garments.
In all of 2005, there were pledges of $118 million in the garment sector and only $17 million for agriculture. For the first half of 2006, $185 million has been pledged in agriculture and only $37 million pledged in garments and textiles.
Minister of Agriculture Chan Sarun said the trend reflects growing foreign interest in agro-industry, driven in part by the demand for bio-fuels to replace high-priced petroleum.
Tan Monivann, vice president of the commodities firm Mong Reththy Group, said the government has done more to encourage investment in agriculture this year.
Economists have long noted that pledges made to the CDC do not always translate into actual investment.
1 comment:
It is about time.....
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