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Foreign Investment Expected to Slump

Foreign direct investment is expected to drop by $200 million in 2009, from more than $800 million last year, according to a recently published World Bank report.

The drop in foreign investment would cause a fall from a high of 10 percent of GDP in 2007, to 5.2 percent in 2009, “as foreign investors become more cautious about investing in developing countries,” according to the report, “East Asia: Navigating the Perfect Storm.”

Cambodia saw a record $866 million in FDI in 2007, followed by $812.7 million in 2008. But the World Bank report predicts about $596 million in foreign investment to reach the country this year.

“We recognize the downturn of FDI, because of the global economic crisis, but the slowdown in 2009 is better than [the investment] in the early 2000s,” Hang Chhuon Naron, secretary general of the Ministry of Finance, said Friday. “But the government has taken measures to pay its budget for public investment.”

Opposition lawmaker Yim Sovann said he was “very concerned” about the drop in investment.

“It affects the people’s living, and the people will have no job to do,” he said. “It causes the government policy to reduce poverty fail.”