Cambodian President Hun Sen vowed Saturday to improve investment conditions in his country on the heels of a recent surge in Japanese business there, the Foreign Ministry said of his talks with Prime Minister Yoshihiko Noda.
In the talks, Japan agreed to offer Cambodia up to ¥1.51 billion in projects to rebuild its roads and drainage system after flooding in September wrought major damage, the ministry said.
In praising the recent jump in investment, Noda expressed hope that Cambodia will also create an environment attractive to Japanese companies, it said.
Noda said the expected completion of the Sihanoukville Special Economic Zone, a project funded by Japan’s official development assistance, will help promote Japanese investment there.
Hun Sen, who is scheduled to attend a completion ceremony for the project on May 1, told Noda that the investments are helping improve people’s lives in Cambodia and that he will make further efforts to welcome Japanese firms.
Japanese firms see Cambodia as the next place to enter, after China, Vietnam and Thailand, for stable growth averaging 7 percent over the past 10 years, the ministry said.
Last year, Japanese investment in the country more than doubled over the previous year to around $75 million, it said.
Japanese firms are boosting investment in Cambodia because labor costs in neighboring nations are on the rise, observers said.
Noda and Hun Sen met on the sidelines of a summit involving Japan and the five Mekong delta nations of Cambodia, Laos, Myanmar, Thailand and Vietnam earlier Saturday.
On projects related to flooding, Japan will help Cambodia repair roads and drainage systems and to construct bridges in the city of Kampong Chhnang, following flooding that killed 250 people, affected 1.5 million more and damaged around 17 percent of the country’s rice-producing area last year, the ministry said.
Japan’s fresh assistance adds to immediate supplies worth around ¥25 million, including water purifiers and plastic containers, that were given to Cambodia after the flooding, it said.