Cambodia During Economic Integration Issues and Challenges February 2007 Neou Seiha EIC Researcher 1
Contents 1. Evolution Cambodian Trade Policy 2. Cambodian Economic Situation during Integration 3. Challenges and Concluding Remarks 2
Evolution of Cambodian Trade Policy 3
Cambodia s Economic Integration 1980s: Trade regime was firmly controlled by the state; 1989: Started Launching economic reforms (partially) that opened and deregulated economy; 1993: People elected a coalition government who committed to Democracy and Free Market Economy; Some bilateral trade agreements, especially with US (Quota) and EU (EBI) Join the economic cooperation of the GMS A member of ASEAN in April 1999 A member of WTO in October 2004 4
Share of Trade in GDP 160% 120% Fully adopted free market; Openness & reform process Member of WTO 80% 40% Partly free market Member of ASEAN 0% 1988 1990 1992 1994 1996 1998 2000 2002 2004 5
Cambodian Economy during Economic Integration 6
Cambodia s Economy - Update 2001 2002 2003 2004 2005 2006p Nominal GDP - Million US$ 3,651 3,970 4,277 4,592 5,264 7,170 GDP per Capita - US$ 308 326 345 388 448 506 Real GDP Growth 7.7% 6.2% 8.6% 10.0% 13.4% 10.4% Inflation rate -0.9% 0.0% 1.2% 3.9% 5.6% 4% FDI - Million US$ 149 145 84 131 381 - Source: National Institute of Statistic Compared to other countries in the regions: Good performance in term of economic growth GDP per capita is still low Low inflation rate Low FDI 7
Cambodia s Economy - Update Cambodia's Real GDP Growth by Sector (%, 2000 prices) 2001 2002 2003 2004 2005 2006 Agriculture 4.5-2.1 11.9 1.1 16.4 4.4 Crops 22-4.4 24.4 1.7 28.0 3.4 Industry 11.7 17.7 12.5 16.8 12.3 17.0 Garments 28.4 21.3 16.8 24.9 10.3 21.9 Services 8.7 6.3 4.4 11.7 12.1 11.4 Tourism 22.6 18.8-16.7 23.4 17.3 23.3 Total GDP 7.7 6.2 8.6 10.0 13.4 10.4 Sources: National Institute of Statistics Agriculture sector depends largely on weather condition. Engine of Growth: Garment (quota system) and Tourism 8
Cambodia External Trade Merchandise Trade in Cambodia, 1999-2005 (Million of US$) 1999 2000 2001 2002 2003 2004 2005 Total goods export 1,130 1,397 1,571 1,770 2,087 2,589 2,910 Textile and garment 60% 73% 76% 79% 78% 80% 78% Agriculture 27% 17% 16% 13% 15% 13% 14% Re-export 12% 8% 7% 6% 6% 5% 5% Total goods import 1,592 1,936 2,094 2,361 2,668 3,269 3,928 Garment-related material 22% 27% 29% 30% 30% 31% 28% Petroleum 20% 17% 17% 15% 16% 19% 21% Import for re-export 6% 5% 4% 4% 3% 3% 3% Source: Compiled from data provided by National Bank of Cambodia 9
Export Product share by Country China 0.7% ASEAN 4.6% Other Countries 21.4% EU 20.5% USA 52.8% Sources: MoC 2000-2005 10
Import Product share by Country Other Countries 34.2% ASEAN 37.9% EU 4.1% China 22.7% USA 1.1% Sources: MoC 2000-2005 11
Trade balance by Country 1,500 1,000 500 0-500 2000 2001 2002 2003 2004-1,000-1,500 Million US dollar ASEAN China EU USA Trade deficit with ASEAN and China Trade surplus with US and EU Sources: MoC 2000-2005 12
FDI Stock By 2005 Other 57% Garment 25% Agriculture 4% Hotel 14% Sources: MoC 2000-2005 Source: Reproduced from NBC 13
Challenges and Concluding Remarks 14
Major Challenges for Cambodia s Economy Narrowed-Based Economy Garment and Tourism Limitation of Agro-industry Investment Most of the poor derive their income from Agriculture Export Market Constraints Standards and conformity Assessment Subsidy Potential lost of Revenue from international Tax Oil and Gas revenue 15
Cambodia Competitiveness Global Competitiveness Index (GCI) in 2006: 125 countries Countries 2006 Ranks Singapore 5 Japan 7 Korea, Rep. 24 Malaysia 26 Thailand 35 Indonesia 50 China 54 Philippines 71 Vietnam 77 Cambodia 103 16
Thank for your attention!!! 17