There are few factors that determine the development of a city in future:
1.The development of infrastructures
Observing the development of these cities every three months, and we found that infrastructures such as traffic lights and signs, sewers, viaducts, surveillance system, road condition are constantly changing and this says the city’s development.
I live in Keelung for more than forty years, yet there is no high-speed rail and MRT until now, and we are not sure if there will be any in next 15 to 20 years as well. But I am very sure that, both high-speed rail and MRT will be there in Phnom Penh within 10 to 15 years. The reason is very simple, countries such as China, Japan, the United States and South Korea have been investing a lot of resources including fund, manpower and experience on the development of infrastructures in Phnom Penh.
2.The growth rate of population
The marriage rate and fertility rate in Taiwan are decreasing every year because of the pressure of modern life. However, in South East Asia countries such as Cambodia, the average marriage age of people in the capital city is about 23 years old and they have 2 to 3 kids while people in the suburb area have 4 to 6 kids. Thus, the population will grow millions of people each year after 8 to 10 years and this is an inevitable phenomenon.
Population represents the productivity, and it even represents the spending power during the city’s development, just like what we can see from China’s changes during the development in last decade.
3.The big amount of foreign investment
Foreign investment means capital, vision, technology and experience. Besides, it also represents the future development of a city. Taiwan investors invest in China in past 2 to 30 years while also investors from Europe, Taiwan, Japan and Korea invest in South East Asia cities like Bangkok, Kuala Lumpur and Ho Chi Minh City in past 10 to 15 years. Foreign investment has helped a lot on the development of these cities.
4.The lending rate of foreign banks
Banks in South East Asia countries have an average interest rate of 8-10% while banks in Taiwan have only an average interest rate of 2-3%. Banks emphasize on risk and profit, each of them can get hundred million dollars of funds and therefore personnel who are assigned to Cambodia never request to go back as they earn more money here than in Taiwan.
Banks represent funds. It says that these places are developing in agriculture, industry, business, service, information technology and many more. Taiwan and China took at least 15 to 20 years to transform from agriculture to industry, and another 15 to 20 years from industry to commercial trade. But Cambodia transformed quickly from traditional agriculture to modern commercial trade and even IT industry. It is estimated to take only 10-15 years for everything to be in place.
5.The increase of land price
In 2003, a land (nearly 3000 square feet) in Taiwan urban area is about hundred thousand of dollars. In 2013, the land is about hundred million of dollars. Now in 2017, the land is about thousand million of dollars. 80% of the development of infrastructures in Cambodia are just started, we can imagine the rapid growth in following few years.
The development of a city is just part of foreign investment. Most importantly, investors must understand the background and current situation of the city/country in order to reduce risk.
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