Cambodia Foreign Direct Investment
The Kingdom of Cambodia is a country that has seen its fair share of political and economic turmoil. However, the past few years have been particularly eventful for Cambodia. The government has maintained stability in recent years and foreign direct investment (FDI) has increased significantly over the past decade. In fact, between 2003 and 2013 FDI into Cambodia grew from $1 billion to $5 billion per year! And it doesn't seem like this trend will stop anytime soon either: official figures show that FDI was up 33% in 2014 compared to 2013. This seems impressive but how does this compare to other countries? Well, according to UNCTAD's World Investment Report 2015, Cambodia's FDI inflows rank 26th globally.
Foreign direct investment is the global flow of capital through long-term investments in foreign countries. The purpose of this paper will be to examine the economic effects that foreign direct investment has on a country, specifically whether or not FDI helps or hurts developing nations.
The number of foreign direct investments (FDI) in Cambodia has been on the rise since 1998 and is expected to continue. While FDI was only $1.2 billion dollars in 1998, it reached a total of $4 billion by 2008-2009. This year, it looks like we will see an even bigger spike with projections being around $6 billion for 2010 alone! The biggest investors are China, Japan, Singapore, Thailand and Vietnam. These countries have invested heavily into infrastructure projects both domestically as well as internationally across various industries including agriculture/fisheries/forestry; extractive industries; manufacturing; real estate development; services such as tourism and transportation. Tourism continues to be one of Cambodia's largest revenue earners despite political upheaval.
There is a lot of talk about foreign direct investment (FDI) lately, and not all of it good. The media has been talking about the negative effects FDI has on the country as well as how it affects locals. I think this is an area worth looking at more closely to understand if there are any benefits from this type of investment that aren’t being discussed or emphasized enough.
Foreign Direct Investment (FDI) is a crucial way to grow business in Cambodia. If you are considering FDI, take the time to understand all of your options and what they can do for you before making any decisions. Our team has years of experience helping foreign investors navigate the Cambodian economy and will be happy to help answer any questions or concerns that come up during this process.