Cambodia should find additional markets for its export products and not heavily depend on the US and Europe, a senior economist from the Asian Development Bank said.
“For a country like Cambodia, exports are always going to be important, but maybe what one should think of is not just export to the US or to Europe,” Rajat Nag, the ADB managing director-general, told VOA Khmer in an inclusive interview last week while on a trip to the US.
While the US and European markets remain important, Nag said, Cambodia should also take advantage of the Asean Free Trade Agreement, by trying to export products to Vietnam, India or China.
“These are also important and large markets,” he said.
Cambodia’s main exports, garment products, are typically destined for the US and Europe. The industry is a main economic driver, giving jobs to some 300,000 workers, mainly women.
“Also, perhaps Cambodia needs to think of diversifying its exports based not just on garments but electronic products,” for example, Nag said.
Indeed, the Cambodian government has said it is pursuing such an expanded trade strategy.
Hang Chuon Naron, secretary-general of the Ministry of Economy and Finance, acknowledged that growth had slowed in the garment sector, from 150 percent to 200 percent in 1995 to 8 percent in 2007 and 2008, prompting the government to seek markets in Asean and Japan.
Cambodia is also diversifying its products, from traditional agriculture, like rice, rubber, beans and cassava, exported to neighboring countries, toward electronics.
“In the medium and long terms, there will be high-value-added export products,” Hang Chuon Naron said in a phone interview. “We’ll look at electronic products. This requires higher skills. It needs between five and 10 years.”
Some economists say electronics should first be attempted for domestic demand, rather that for export, as high potential lies at home.
“We have a market here thanks to a growing tourism industry and construction,” said Kang Chandararoth, head of the Cambodia Institute of Development Study. “Once we strengthen our capacity to compete domestically, we can see if we can compete overseas.”
Local capacity isn’t a problem, he said, but rather the main issue is to find investors or a partner.