July 28 (Bloomberg) -- Cambodian Prime Minister Hun Sen, a former communist who has ruled for two decades, probably expanded his majority in yesterday's election, buoyed by rising prosperity and a nationalist dispute with neighboring Thailand.

Hun Sen's Cambodian People's Party was set to win more than the 73 seats it claimed in the previous election, Khan Keo Mono, a spokesman for the National Election Committee, said late yesterday. Opposition leader Sam Rainsy's party, named after himself, finished second in the race for 123 parliamentary seats,

``Votes are still being counted but the CPP probably won more seats than it did in 2003,'' the spokesman said. The committee will disclose preliminary results today.

The ruling party's victory may spur more foreign investment, which has helped the economy average 10.6 percent growth during the past five years. The economic expansion and a recent military standoff with Thailand over disputed land near the 11th-century Preah Vihear temple, a United Nations World Heritage Site, have benefited the incumbent government.

``Political stability has been and will continue to be the most important contributor to Cambodia's rapid economic growth,'' said a July 21 note from the Cambodia Investment and Development Fund, one of several funds planning to spend about $450 million in the country.

In the 2003 election, Hun Sen's party won 59 percent of parliamentary seats, short of the two-thirds majority then required to form a government. In 2006, lawmakers changed the constitution to allow a party to govern with a simple majority. Hun Sen said he expected to win 81 seats in this election.

Disenfranchised

Sam Rainsy, whose party won 24 seats in the 2003 election, said yesterday that 200,000 voters in Phnom Penh were disenfranchised because their names were taken off voter lists. He called for a re-vote in the capital, where he outperformed Hun Sen in the previous election.

Election observers, who noted the missing names on voter lists, said the poll was cleaner than in previous years. Human rights groups have said political violence during this campaign season didn't reach the level seen in years past.

``This election was better,'' said Hang Puthea, executive director of the Neutral and Impartial Committee for Free and Fair Elections in Cambodia, a non-governmental organization. ``We saw irregularities but they were fewer than we saw before.''

Sam Rainsy was probably exaggerating the number of people whose names were left off voter lists, Hang Puthea said. The National Election Committee has the authority to call a new election, an unlikely prospect at this point.

``The election went smoothly; we just had some problems with missing voter names,'' Khan Keo Mono said. He added that those people ``cannot vote anymore.''

Growing Support

For now, Hun Sen, 56, is enjoying growing support as foreign investment creates jobs in the energy, agriculture, tourism and garment industries and he rewards rural voters with new schools and paved roads. The ongoing troop buildup along the Thai border has stirred up nationalism that gave him a boost heading into the election.

Thailand and Cambodia plan to meet today in Siem Reap, home to Cambodia's famed Angkor Wat temple complex, to try to resolve the row over 4.6 square kilometers (2.9 miles) of disputed land. Thailand appointed a new foreign minister on July 26 to lead negotiations after the previous one was forced to resign over the issue.

Issue Resolution

New Foreign Minister Tej Bunnag said in a statement yesterday that he is ``confident that on the basis of their close and long-standing friendship, the two countries will be able to find ways to resolve the issue together.''

Cambodia has started to rehabilitate its image as a corrupt beggar state after the Khmer Rouge in the late 1970s killed most of the educated class. It received $763 million in foreign aid last year.

Foreign investment is set to double from $2.7 billion this year, according to the Cambodian Investment Board, a government agency. As the country prepares to open a stock market next year, foreign investment funds such as Leopard Capital are looking at banks, office buildings, luxury hotels and other projects.

To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

Last Updated: July 27, 2008 21:57 EDT