In CAMBODIA, five years ago, Sihanoukville, a serene seaside town with tranquil beaches, saw Chinese investors converting it into a gambling metropolis to challenge Macao and Las Vegas. However, this transformation came to an halt due to both, the prohibition on internet gambling and the COVID-19 crisis.
Subsequent to these restrictions, more than 200,000 Chinese laborers were forced to repatriate. The city-town witnessed the closing down of casinos and the abandonment of several half-complete high-rise buildings, resorts, and condo schemes. Sihanoukville’s silhouette has turned into a stark representation of unsuccessful ventures, mostly by Chinese financiers, as described by one pro-administration media platform. According to the Cambodian Ministry of Economy and Finance, housing values have tanked drastically by nearly 90% in recent years.
Many small-scale private financiers like Chantha Lach desire a resurgence of foreign investment. They see the revival of Chinese investment as a solution to the city’s languishing property prices.
To rectify this situation, Cambodia is developing a strategic action plan to resolve issues with over 1,100 unfinished structures in Sihanoukville. Proposed changes comprise multiplying the local residential population to a million, with welcoming visa policies for overseas residents and tax concessions catering to Cambodia’s growing middle class.
David Totten, the managing director of Emerging Markets Consulting, believes that addressing unfinished projects will pose one of the biggest snags. Legal complexities related to ownership and responsibilities exist for nearly half of the suspended or abandoned structures.
There are signs of investors slowly returning to Sihanoukville. Substantial Chinese-backed enhancements of the disputed Ream Naval base, are presently in progress. Meanwhile, the construction of a new tourist endeavor, the Bay of Lights, led by Chinese entrepreneur Chen Zhi, is on the cards.
Looking forward to economic resurgence, Cambodia hopes for a vibrancy in tourism, supported by returning Chinese investors and tourists. The Tourism Ministry documented that Chinese visitors in 2019 contributed to about $1.8 billion in revenue alone.
Major Chinese-funded projects, like the Phnom Penh-Sihanoukville expressway, are complete, with more infrastructural projects in pipeline. With foreign investors’ eyes on the market, projects like these are crucial for Cambodia’s overall economic development. However, the expense of these investments is stoking doubts. Cambodia’s GDP was just $27 billion in 2019 while upcoming infrastructural projects are estimated to cost around $30 billion.
