TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

CAMBODIA
Trends and impacts of foreign investment in
developing country agriculture
TABLE 2
Investment approved by CIB, 2000–2010 (Fixed assets in million US$)
Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000–
June 10
Cambodia 57 5 3 185 76 366 2 081 1 323 3 951 3 764 151 12 112 45.6
Japan 0 - 2 - 2 - 2 13 7 5 - 132 0.5
Korea Rep. 19 2 79 2 5 56 1 010 148 1 242 121 35 2 720 10.2
Taiwan 19 57 7 1 14 10 48 35 19 27 39 276 1.0
Hong Kong 5 1 2 5 - 1 4 26 - 7 17 69 0.3
China 28 5 24 34 83 454 757 180 4 370 891 60 6 887 25.9
Singapore 8 - 1 4 5 25 12 2 52 272 6 388 1.5
Malaysia 2 51 1 5 33 26 28 241 3 7 110 507 1.9
Thailand 26 15 7 1 81 100 108 26 178 2 544 2.0
Viet Nam - - 24 - - - 31 156 21 210 83 525 2.0
USA 12 6 - - 2 4 62 3 672 1 2 764 2.9
France 5 - - 6 3 8 - 35 38 50 - 145 0.5
UK - - - - - - - - - 2 1 3 0.0
Others 35 3 5 1 5 18 320 298 415 330 83 1 514 5.7
Total 217 205 238 251 229 1 050 4 454 2 667 10 818 5 865 591 26 586 100
FDI 160 140 145 66 153 684 2 373 1 345 6 866 2 101 440 14 474
Note: data for 2010 = January to June. Source: CDC, 2010
Private domestic engagement and foreign
engagement were about equal between 2000 and
2010: the average share of FDI in total investment
in the period was about 58 percent. FDI showed
an upward trend but slowed in 2009 after the
global economic crisis hit. Among foreign investors,
China stood out, followed by the Republic of
Korea, United States, Thailand, Viet Nam, Malaysia,
Singapore and Taiwan, in that order. Traditional
investors, like China, Republic of Korea, Malaysia
and Thailand, have been injecting more funds
into the Cambodian economy since 2000, which
reflects their growing trust and confidence in the
country’s investment environment. Additionally,
countries such as Viet Nam, Japan and United
States have shown rising interest in the past couple
of years. This is a promising sign for overall output
growth in the medium and long term, despite the
shocks of 2008 and 2009.
3.1 Approved Investment by sector
In terms of distribution by sector, tourism and
industry have absorbed a great deal of investment
164
Share
during the past decade, followed by services.
Tourism was champion, with a share in total
investment averaging 35 percent between 2000
and June 2010, followed by industry (32 percent)
and services (25 percent). Investment in agriculture
was sluggish during the same period (Figure 2). In
terms of accumulation of approved investment,
tourism took the lead with 58 percent, followed
by services (19 percent) and industry (17 percent);
agriculture contributed the smallest share: around
6 percent. High capital inflows into tourism are
attributable to the government’s 1997 Open Sky
Policy, the achievement of peace and political
stability in 1998, and the gradual improvement
of national infrastructures, particularly road
connectivity and bridges.
Sluggish growth in agricultural investment
between 2000 and 2010 can be explained by
the fact that investment in agriculture is a longterm
process with weak likelihood of return, and
by the widespread nature of ill-defined property
rights which prevent enterprises from using land
and property as collateral to access finance (World
Bank 2006: 74).