Tourism takes biggest hit as investment falls

Photo by: STEVE FINCH

Tourists look around Angkor Wat, Cambodia’s main tourism attraction, in August. Investors largely stayed away from the tourism sector last year as Cambodia succumbed to the global economic crisis.

via CAAI News Media

Wednesday, 13 January 2010 15:01 Chun Sophal

Government data show approved investment in tourism fell more than $5 billion last year as total projects dropped 46pc

GOVERNMENT-approved tourism investment plummeted by almost US$5 billion last year, figures released Tuesday by the Council for the Development of Cambodia (CDC) showed.

According to the statistics, 2009 saw 13 tourism projects worth $3.98 billion approved by the government, compared with 20 projects worth $8.78 billion in 2008.

The $4.8 billion dive was by far the largest contributor to the total slide in the amount of approved investment in Cambodia, which dropped an annualised 46.18 percent or $5.03 billion overall. The total value of investment projects approved by the government in 2009 was $5.85 billion compared to $10.88 billion in 2008.

Sok Chenda, CDC secretary general, was unavailable for comment Tuesday.

Some commentators have blamed the downturn on the global economic crisis, pointing to a reduction in construction projects, particularly in the hotel industry, as a major contributor.

Kang Chandararoth, president of the Cambodia Institute for Development Study, said on Tuesday that the world economic crisis contributed to the drop.

He said that the credit crunch particularly affected the construction sector, in which the number of houses and hotels built had greatly increased in 2008 before experiencing a sharp decline last year.

He added that the situation of investment for 2010 is likely to be better than during the past 12 months, as three key sectors have already seen improvement.

“Obviously, we see that the investment trend is going upwards in the agriculture, energy and telecommunications sectors,” said Kang Chandararoth.

Those three sectors were the strongest performers in 2009.

The agricultural sector attracted $590 million of investment, 91.79 percent of which came from foreign business. This compares with just $106 million in 2008.

Telecommunications was also a big player, with $235 million pledged for just one national project this year, compared with $87 million overall last year.

The energy market’s $665 million of investment contributed most of the industrial sector’s $958 million worth of funding, but still represented a $170 million drop from 2008.

However, according to Yun Heng, director of the Department of Evaluation and Incentive of the Cambodian Investment Board, who spoke to the Post in September, the fall in investment was due to the lack of capital flow from overseas – a result of the global economic and financial crisis.

Approved investment from China, 2009’s largest contributor, decreased from $4.37 billion to just $892 million.

Singapore, however, increased its projects to $272.4 million compared with $52 million in 2008.

Russia, which ranked third in terms of investment, more than doubled its approved investment to $235.7 million from $102 million, while Vietnam, which stood fourth, had investments worth $210 million approved, more than quadrupling its 2008 figure of $52 million.