Zero Vietnam investment in Cambodia

Zero Vietnam investment in Cambodia

A worker watches machinery operating at a construction site in Phnom Penh on Sept 13, 2016. Cambodia saw almost zero inflow of foreign direct investment from Vietnam in the first six months of this year. (Bloomberg photo)
A worker watches machinery operating at a construction site in Phnom Penh on Sept 13, 2016. Cambodia saw almost zero inflow of foreign direct investment from Vietnam in the first six months of this year. (Bloomberg photo)

The pipeline for foreign direct investment (FDI) from Vietnam to Cambodia has almost run dry, with the country seeing almost zero inflow of Vietnamese funds into projects in the first half of the year, according to an official in the Council for the Development of Cambodia (CDC).

Chea Vuthy, deputy secretary-general of the CDC, said the Cambodia-Vietnam business forum on Thursday that Vietnam’s investment from 1994 to 2015 reached $1.76 billion, while there was no Vietnamese investment inflow in the first six months of this year, the Khmer Times reported on Friday.

Currently, Vietnam is ranked fifth in terms of total investment in the country after China, South Korea, the European Union and Malaysia. By 2020, total Vietnamese investment in Cambodia is projected to reach $6 billion, and according to the Vietnamese embassy this would make Vietnam one of the biggest investors in the Kingdom.

But Vuthy tried to downplay the dismal FDI from Vietnam in the first half of the year.

“It does not matter if we do not have any Vietnamese investment coming in, though we are a bit baffled. We hope business relations will improve and there will be some investment projects in the second half of the year,” he said.

Ha Thi Thanh Binh, general secretary of the Association of Vietnamese Investors in Cambodia, said that so far there were about 182 approval investment projects from Vietnam -- totaling about $2.85 billion -- that have been registered with the CDC.

“This year, however, there have been only four investment projects from Vietnam and we are waiting for approval from the government to begin operations. They are still pending,” she told the business forum.

Nguyen Duc Thanh, president of the Vietnam Institute for Economic and Policy Research said that he was surprised there was no investment flow from Vietnam to Cambodia for the first six months of the year.

“It may be due to several factors like the economic situation in the country, political reasons or the slowdown in the agricultural sector,” he said.

“Investors in Vietnam want to invest in Cambodia’s agricultural sector. But when the global prices of agricultural commodities fall, they can be quite reluctant to invest out of fear of making big losses,” added Thanh.

Thanh pointed out that while a majority of investors from Vietnam were interested in agro-industries like rubber, the current global depressed prices for natural rubber were deterring them investing in Cambodia.

Mey Kalyan, senior adviser to the Supreme National Economic Council, told the Khmer Times that good trade relations with Vietnam were important for Cambodia.

“We have to make our investment polices to be more attractive to the Vietnamese and we hope they will return back to our country,” he said.

“There’s still work to be done and we can’t just allow the Vietnamese to stay away from Cambodia.”

Bilateral trade between Vietnam and Cambodia in 2015 was $3.37 billion. Cambodia’s exports to Vietnam were $954 million, while imports amounted to $2.41 billion.


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