By Craig Guthrie
The Mekong Times
The landslide victory which the Cambodian People’s Party (CPP) appears to have secured in last Sunday’s election will enhance the Kingdom’s reputation as an up-and-coming investment destination and bodes well for future economic stability, say foreign investors and business leaders.
“This election result was a best case scenario for investors,” said Douglas Clayton, the CEO of Leopard Capital, one of several private-equity funds which, in the last few months, have revealed plans to inject a total of US$500 million into the economy.
The government’s fresh mandate will ensure continuity in its investment policy and at the same time put the opposition in a stronger position to perform its monitoring function, he added.
Independent electoral watchdog the Committee for Free and Fair Elections (COMFREL), has preliminarily announced that the CPP won around 90 of the National Assembly’s 123 seats in the election, or 73 percent of the national vote.
“A lot of local business activity has been put on hold pending the elections, and things should get back to normal now that this is out of the way,” said Clayton, whose firm has so far raised more than a tenth of the US$100 million it plans for its Cambodia-dedicated fund, Leopard Cambodia.
The CPP wore its economic credentials on its sleeve during the campaign, with many voters choosing to support the party which has delivered double-digit growth figures in recent years and rising Foreign Direct Investment (FDI) levels.
“Businessmen like stability and predictability, and that is what the government delivered for the past five years, which has led to good economic growth,” said Bretton Sciaroni, the chairman of Cambodia’s International Business Club.
He said that the election process barely registered on investors’ horizons this year, in stark contrast to previous votes.
“Investors have kept coming to Cambodia regardless of the fact that the nation was heading into an election. At most, there might have been one to two months of slowdown, which is a far cry from the six months slowdown which the nation had during previous elections.”
Although international observers have said some aspects of the election failed to meet international standards, on the whole the vote has been described as “smooth,” and as having much lower levels of violence, intimidation and political interference than previous elections.
“The fact that the elections were well managed and peaceful demonstrates significant progress on Cambodia’s part — definitely very encouraging for foreign investors,” said Marvin Yeo, co-founder of Frontier Investment & Development Partners.
Yeo, whose firm plans to establish a US$250 million private-equity fund in Cambodia, says that there will “absolutely” be a positive reaction from investors to the government’s re-election.
The Cambodia Investment Board predicted this year that FDI levels are on track to reach US$5.4 billion in 2008, while the launch of a stock exchange in December 2009 is hoped will lead local companies down a newly forged path of transparency and financial maturity.
John Brinsden, vice chairman of Acleda Bank, which has set benchmarks for transparency levels in Cambodia and is widely expected to list on the stock exchange, said that the private sector had largely anticipated that the CPP would come out of the election with a workable majority.
“This is important in two ways,” said Brinsden. “Firstly, our customers have been telling us that for economic growth to continue there must be stability and continuity. Secondly, and as important in its own way, is that the new government’s performance in office will be under more detailed scrutiny.”
Ruling on their own will test the government’s leadership by exposing them to a much higher level of accountability, he said.
He added that the election has been good for the country as a whole, and business in particular, by demonstrating to the world that despite its difficult history and still high levels of poverty Cambodia is capable of running a generally democratic and peaceful election.
“This fact will dramatically change international perceptions and encourage foreign investment into Cambodia,” said Brinsden.
The Mekong Times
The landslide victory which the Cambodian People’s Party (CPP) appears to have secured in last Sunday’s election will enhance the Kingdom’s reputation as an up-and-coming investment destination and bodes well for future economic stability, say foreign investors and business leaders.
“This election result was a best case scenario for investors,” said Douglas Clayton, the CEO of Leopard Capital, one of several private-equity funds which, in the last few months, have revealed plans to inject a total of US$500 million into the economy.
The government’s fresh mandate will ensure continuity in its investment policy and at the same time put the opposition in a stronger position to perform its monitoring function, he added.
Independent electoral watchdog the Committee for Free and Fair Elections (COMFREL), has preliminarily announced that the CPP won around 90 of the National Assembly’s 123 seats in the election, or 73 percent of the national vote.
“A lot of local business activity has been put on hold pending the elections, and things should get back to normal now that this is out of the way,” said Clayton, whose firm has so far raised more than a tenth of the US$100 million it plans for its Cambodia-dedicated fund, Leopard Cambodia.
The CPP wore its economic credentials on its sleeve during the campaign, with many voters choosing to support the party which has delivered double-digit growth figures in recent years and rising Foreign Direct Investment (FDI) levels.
“Businessmen like stability and predictability, and that is what the government delivered for the past five years, which has led to good economic growth,” said Bretton Sciaroni, the chairman of Cambodia’s International Business Club.
He said that the election process barely registered on investors’ horizons this year, in stark contrast to previous votes.
“Investors have kept coming to Cambodia regardless of the fact that the nation was heading into an election. At most, there might have been one to two months of slowdown, which is a far cry from the six months slowdown which the nation had during previous elections.”
Although international observers have said some aspects of the election failed to meet international standards, on the whole the vote has been described as “smooth,” and as having much lower levels of violence, intimidation and political interference than previous elections.
“The fact that the elections were well managed and peaceful demonstrates significant progress on Cambodia’s part — definitely very encouraging for foreign investors,” said Marvin Yeo, co-founder of Frontier Investment & Development Partners.
Yeo, whose firm plans to establish a US$250 million private-equity fund in Cambodia, says that there will “absolutely” be a positive reaction from investors to the government’s re-election.
The Cambodia Investment Board predicted this year that FDI levels are on track to reach US$5.4 billion in 2008, while the launch of a stock exchange in December 2009 is hoped will lead local companies down a newly forged path of transparency and financial maturity.
John Brinsden, vice chairman of Acleda Bank, which has set benchmarks for transparency levels in Cambodia and is widely expected to list on the stock exchange, said that the private sector had largely anticipated that the CPP would come out of the election with a workable majority.
“This is important in two ways,” said Brinsden. “Firstly, our customers have been telling us that for economic growth to continue there must be stability and continuity. Secondly, and as important in its own way, is that the new government’s performance in office will be under more detailed scrutiny.”
Ruling on their own will test the government’s leadership by exposing them to a much higher level of accountability, he said.
He added that the election has been good for the country as a whole, and business in particular, by demonstrating to the world that despite its difficult history and still high levels of poverty Cambodia is capable of running a generally democratic and peaceful election.
“This fact will dramatically change international perceptions and encourage foreign investment into Cambodia,” said Brinsden.
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