Cambodia Enjoying Influx Of Foreign Investments

[Pattayatony]

PHNOM PENH, Cambodia: Cambodia, one of the world's poorest countries, is enjoying an influx of foreign investments, and land prices in the capital Phnom Penh have been shooting up.

Demand is strongest for affordable housing suitable for growing families and projects with foreign partners are particularly attractive to Cambodians.

Scores of South Korean construction companies are getting in on the action.

Camko City, a US$2 billion residential community, is the single largest investment in the country's history.

The project, led by a conglomerate of South Korean companies, has gone ahead with the government's full support.

Thach Sotharath, a commercial real estate agent, said: "The landowners, they want to build something – a big, big project – so they have only the land, they don't have the capital to build, so they have to find an investor to come to join venture or to buy their land."

With the high level of interest shown by investors, land prices in the city have skyrocketed from US$5 per square metre in 2004 to US$100 this year – a twenty-fold increase.

"Many investors have come in and Cambodian people are happy that they have so many jobs," said Sotharath.

Many foreign investors were once concerned about putting money in a country with a troubled past.

But they were won over by the Hun Sen government's business-friendly policies, which include a one-stop service to facilitate paperwork.

James Chang, a South Korean investor, said: "Many foreign investors used to be very worried about the political situation in Cambodia. But nowadays everything has been very stabilised."

With foreign investments pouring into the once war-torn economy, Cambodia's GDP growth is expected to hit more than 9 percent this year.

Cambodia's business boom can be attributed to Asian investors like South Korea and China.

Total direct foreign investment in the country has quadrupled over the past three years and it looks likely to reach half a billion US dollars in 2007.

While Cambodia is now seen as a profitable destination for investors, there are still concerns over business risks.

As the country opens its doors wider, it has to improve transparency, amid allegations of government corruption.