News / Asia

Foreign Investment Brings Cambodia Growth, New Issues

A train prepares to start during the official recommencement of commercial train services on a rehabilitated rail corridor in Phnom Penh October 22, 2010.
A train prepares to start during the official recommencement of commercial train services on a rehabilitated rail corridor in Phnom Penh October 22, 2010.

Multimedia

Audio
Ron Corben

Cambodian officials say the country's economic growth rate is set to exceed seven percent this year. According to financial analysts even if the global economy slows, Cambodia is well prepared to deal with it, partly because of strong foreign investment. But the billions of dollars flowing into the country are also raising concerns about the political and social impact from massive development projects.

Cambodia has posted strong economic growth in the two years since the 2008 global financial crisis. Foreign investment, a growing tourism industry and a strong agricultural sector have been key to that growth.

The country's garment and textiles sector is also doing well, with exports set to rise by 40 percent this year.

"The Cambodian economy is probably in the best shape it has ever been in - absent is what is going on the rest of the world," said Stephen Higgins, chief executive officer for ANZ Royal Bank in Phnom Penh. "The economic growth this year we think will be in the range of seven to eight percent, and the normal global environment we would expect probably eight to 10 percent in the next few years."

But Higgins says inflation must be kept under control, especially with regard to rising food prices.

Despite economic uncertainty in Europe and the United States, the Asian Development Bank (ADB) estimated growth this year at 6.8 percent and only expects the rate to decrease slightly next year.

Analysts say foreign investors from Japan are seeking alternatives to China and Thailand. They are joining long standing regional investors such as Vietnam and South Korea.

But China remains the country's top investor. Chinese state media report that investors have poured in about $5.5 billion in the first seven months of the year.

Among the investments is a luxury property development project worth $3 billion. China has also provided money for hydropower and road construction. And two of China's leading banks, the Industrial and Commercial Bank of China and the Bank of China, opened branches in Cambodia this year.

ADB senior economist Peter Brimble says while funds from China are welcome, Chinese aid can be restrictive.

"Chinese aid is extremely tied; [there is] no bidding.  It's quite likely - especially if it's a loan rather than a grant - you may actually be paying more for what you are getting just because the Chinese don't believe in competitive bidding. I think the government knows that."

Critics say China's economic influence is linked to its political concerns. They point to an incident in 2009 when Cambodia deported 20 Muslim ethnic Uighurs who sought asylum after fleeing violence in China. Soon after their departure, a senior Chinese official arrived in Cambodia to sign 14 trade deals worth $850 million.

David Carter, president of the Australian Business Association of Cambodia, says Cambodia has welcomed investment from China.

"Certainly it has a big influence on the place," said Carter.  "Bridges and roads are being built. So there's a feeling that a lot of Chinese money around the place, but I think most people are aware it will come with obligations attached. So it's good, but you have to pay your bills back at some time."  

The development projects funded by those investments can have a dramatic impact on one of South East Asia's poorest nations. While officials have welcomed investments in upgrading Cambodia's infrastructure, there have also been thousands of evictions to make way for new projects. In 2010, rights groups estimate 30,000 people were forced from their homes by mining, agriculture and hydropower projects.

The Housing Rights Task Force, a rights group that has been critical of government resettlement policies, says up to 150,000 people may be evicted in the coming years.  They say at least 80,000 evictions could occur in the capital, Phnom Penh.

Hang Chayya, director of the Khmer Institute for Democracy, says foreign investors must respect human rights in order to maintain long term relationships in Cambodia.

"Any bilateral relationship with China has to be done on one that respects human rights and democracy in the country," said Chayya.  "And this is what is not happening in the government taking the option of dealing with China."

Cambodia's economic performance will be highlighted in 2012, when Phnom Penh hosts the annual meetings of the regional Association of South East Asian Nations (ASEAN).

Analysts say Cambodia's economic future increasingly lies with the fortunes of its close neighbors Thailand, Vietnam and Laos, and its distant neighbor to the north, China.

You May Like

Australia-Cambodia Resettlement Agreement Raises Concerns

Agreement calls for Cambodia to accept refugees in return for $35 million in aid and reflects Australia’s harder line approach towards asylum seekers and refugees More

India Looks to Become Arms Supplier Instead of Buyer

US hopes India can become alternative to China for countries looking to buy weapons, but experts question growth potential of Indian arms industry More

Earth Day Concert, Rally in Washington

President Obama also took up the issue Saturday in his weekly address, saying there 'no greater threat to our planet than climate change' More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Are Energy Needs Putting Thailand's Natural Beauty at Risk?i
X
Steve Sandford
April 17, 2015 12:50 AM
Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Are Energy Needs Putting Thailand's Natural Beauty at Risk?

Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Overwhelmed by Migrants, Italy Mulls Military Action to Stabilize Libya

Thousands more migrants have arrived on the southern shores of Italy from North Africa in the past two days. Authorities say they expect the total number of arrivals this year to far exceed previous levels, and the government has said military action in Libya might be necessary to stem the flow. VOA's Henry Ridgwell reports.
Video

Video Putin Accuses Kyiv of ‘Cutting Off’ Eastern Ukraine

Russian President Vladimir Putin, in his annual televised call-in program, again denied there were any Russian troops fighting in Ukraine. He also said the West was trying to ‘contain’ Russia with sanctions. Henry Ridgwell reports on reactions to the president’s four-hour TV appearance.
Video

Video Eye Contact Secures Dog's Place in Human Heart

Dogs serve in the military, work with police and assist the disabled, and have been by our side for thousands of years serving as companions and loyal friends. We love them. They love us in return. VOA’s Rosanne Skirble reports on a new study that looks at the bio-chemical bond that cements that human-canine connection.
Video

Video Ukrainian Volunteers Search for Bodies of Missing Soldiers

As the cease-fire becomes more fragile in eastern Ukraine, a team of volunteer body collectors travels to the small village of Savur Mohyla in the what pro-Russian separatists call the Donetsk Peoples Republic - to retrieve bodies of fallen Ukrainian servicemen from rebel-held territories. Adam Bailes traveled with the team and has this report.
Video

Video Xenophobic Violence Sweeps South Africa

South Africa, long a haven for African immigrants, has been experiencing the worst xenophobic violence in years, with at least five people killed and hundreds displaced in recent weeks. From Johannesburg, VOA’s Anita Powell brings us this report.
Video

Video Sierra Leone President Koroma Bemoans Ebola Impact on Economy

In an interview with VOA's Shaka Ssali on Wednesday, President Ernest Koroma said the outbreak undermined his government’s efforts to boost and restructure the economy after years of civil war.
Video

Video Protester Lands Gyrocopter on Capitol Lawn

A 61-year-old mailman from Florida landed a small aircraft on the Capitol lawn in Washington to bring attention to campaign finance reform and what he says is government corruption. Wednesday's incident was one in a string of security breaches on U.S. government property. Zlatica Hoke reports the gyrocopter landing violated a no-fly zone.
Video

Video Apollo 13, NASA's 'Successful Failure,' Remembered

The Apollo 13 mission in 1970 was supposed to be NASA's third manned trip to the moon, but it became much more. On the flight's 45th anniversary, astronauts and flight directors gathered at Chicago's Adler Planetarium to talk about how the aborted mission changed manned spaceflight and continues to influence space exploration today. VOA’s Kane Farabaugh reports.
Video

Video Badly Burned Ukrainian Boy Bravely Fights Back

A 9-year-old Ukrainian boy has returned to his native country after intensive treatment in the United States for life-threatening burns. Volodia Bubela, burned in a house fire almost a year ago, battled back at a Boston hospital, impressing doctors with his bravery. Faith Lapidus narrates this report from VOA's Tetiana Kharchenko.
Video

Video US Maternity Leave Benefits Much Less Than Many Countries

It was almost 20 years ago that representatives of 189 countries met at a UN conference in Beijing and adopted a plan of action to achieve gender equality around the world. Now, two decades later, the University of California Los Angeles World Policy Analysis Center has issued a report examining what the Beijing Platform for Action has achieved. From Los Angeles, Elizabeth Lee has more.
Video

Video Endangered Hawaiian Birds Get Second Chance

Of the world's nearly 9,900 bird species, 13 percent are threatened with extinction, according to BirdLife International. Among them are two Hawaiian honeycreepers - tiny birds that live in the forest canopy, and, as the name implies, survive on nectar from tropical flowers. Scientists at the San Diego Zoo report they have managed to hatch half a dozen of their chicks in captivity, raising hopes that the birds will flutter back from the brink of extinction. VOA’s George Putic reports.
Video

Video Exhibit Brings Renaissance Master Out of the Shadows

The National Gallery of Art in Washington has raised the curtain on one of the most intriguing painters of the High Renaissance. Mostly ignored after his death in the early 1500s, Italian master Piero di Cosimo is now claiming his place alongside the best-known artists of the period. VOA’s Ardita Dunellari reports.
Video

Video Sidemen to Famous Blues Artists Record Their Own CD

Legendary blues singer BB King was briefly hospitalized last week and the 87-year-old “King of the Blues” may not be touring much anymore. But some of the musicians who have played with him and other blues legends have now released their own CD in an attempt to pass the torch to younger fans... and put their own talents out front as well. VOA’s Greg Flakus has followed this project over the past year and filed this report from Houston.
Video

Video Iran-Saudi Rivalry Is Stoking Conflict in Yemen

Iran has proposed a peace plan to end the conflict in Yemen, but the idea has received little support from regional rivals like Saudi Arabia. They accuse Tehran of backing the Houthi rebels, who have forced Yemen’s president to flee to Riyadh, and have taken over swaths of Yemen. As Henry Ridgwell reports for VOA, analysts say the conflict is being fueled by the Sunni-Shia rivalry between the two regional powers.

VOA Blogs