A NEW Asian Development Bank (ADB) report Wednesday warned that Asian economies are unlikely to be able to export their way out of the global economic crisis and called for an economic rebalancing to spur domestic demand.
Key Indicators 2009, ADB's flagship annual statistical report released Wednesday, also identified the key role of small and medium-sized enterprises (SMEs) in a return to rapid regional growth.
"In view of the weak outlook for the major global economies, it's unlikely that Asia can export its way out of this slump, as they did after the 1997-98 Asian financial crisis," ADB Chief Economist Jong-Wha Lee said in a statement issued with the report. "Consequently, some economies need to accelerate the rebalancing process to increase domestic demand, and to assist that process they need to take steps to unleash the constraints to growth on SMEs, which so many Asians rely on for their livelihoods."
The warning comes as figures obtained from Camcontrol received by the Post Tuesday showed exports in July plummeted 26.4 percent on an annualised basis to US$249.94 million.
The fall dwarfed the 17.5 percent decline in June and took the total percentage drop in exports for the first seven months of the year to 20.9 percent. Exports fell from $1.99 billion in the first seven months of 2008 to $1.57 billion in the corresponding period this year, the figures show.
The ADB report said public policy has a key role to play in helping SMEs grow and become more productive and called for governments to work with the private sector to correct existing market failures, particularly regarding access to finance.
In Cambodia, it identified four key constraints: access to finance; energy; technology and skill; and the market environment, which includes regulations, restrictions, the legal framework, law and order, and discriminatory policies in favour of large enterprises and multinational corporations.
The ADB report noted that there had been improvement in the government's handling of strategies relating to SMEs in recent years, including the creation of a SME Development Framework.
Mao Thora, secretary of state at the Ministry of Commerce, said Wednesday that the government is scheduled to launch an SME initiative with ADB next year, a project which would see the Manila-based bank send experts to the Kingdom.
According to research by the International Finance Corporation and The Asia Foundation, 90.4 percent of Cambodian firms have fewer than four employees, and 96 percent fewer than 10.