FDI in Cambodia’s RMG sector $272 mn in 2021: ASEAN Investment Report

Foreign direct investment (FDI) in Cambodia in 2021 was flat at $3.5 billion but remained high compared with the 2015-2019 annual average of $2.8 billion. Inflows into the country’s manufacturing sector, though, rose by 28 per cent to $710 million. FDI in the garment industry, traditionally the largest manufacturing recipient, held steady at $272 million.

FDI inflows into the members of the Association of Southeast Asian Nations (ASEAN) surged by 42 per cent in 2021 to $174 billion, according to the ‘ASEAN Investment Report (AIR) 2022: Pandemic Recovery and Investment Facilitation’ launched at the ASEAN Economic Ministers 25th ASEAN Investment Area Council meeting in Siem Reap.

This increase reached the pre-pandemic record level and reversed the decline in 2020 caused by the COVID-19 outbreak.

FDI in Cambodia from the two largest sources, i.e., China ($1.2 billion) and intra-ASEAN ($630 million), which accounted for more than 50 per cent of flows, was also flat.

The robust recovery underscores ASEAN’s resilience and attractiveness as a major investment destination in the world and as an engine of growth for FDI, an official release said.

ASEAN member states have undertaken significant investment facilitation efforts to attract and retain FDI over the years. They are stepping up this endeavour by adopting the ASEAN Investment Facilitation Framework (AIFF) in 2021.

While AMS have put in place most of the AIFF measures, and although investment facilitation measures have become increasingly more effective and efficient, some gaps remain to be filled.