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Logistics reforms ‘needed to increase competitiveness’

Cambodia needs to develop a trade logistics plan to align the Kingdom with the regional production network and increase its competitiveness as an investment destination, a senior World Bank economist said yesterday.

During a workshop to discuss national logistics issues held in Phnom Penh, Julian Latimer Clarke, senior trade economist of the World Bank told an audience of government and private sector representatives that while Cambodia has made improvments, it still lags behind its regional peers in terms of logistics performance.

“Cost is directly linked to logistics. And it is very important for Cambodia, because all the major firms that come here, all the foreigners who are investing here, are basically exporting,” he said. “It is not like in like Indonesia where there is a large domestic market,” he added.

Establishing a national logistics blueprint that includes simplified procedures, professional accreditation, training for customs officers and more infrastructure investment is needed to reduce those costs Clarke said.

“Cambodia, to position itself as an investment destination and an integrated member of ASEAN, this logistic and the connectivity of the border is crucial for its medium-term development,” Clarke added.

Organised by the Ministry of Commerce, the workshop was an opportunity for the government and private sector to offer input into a blueprint designed to improve Cambodia’s logistics performance.

“We know that logistic costs in Cambodia are higher than the costs in neighbouring countries for many reasons,”said the Minister of Commerce Sun Chanthol. “Cambodia still faces challenges over infrastructure and rule and regulations which is affecting the trade facilitation and promotion effort.”

Chanthol said the government was looking into establishing a national task force that would be responsible for implementing the reforms identified in the blueprint.

Sin Chanthy, president of Cambodia Freight Forwarders Association, welcomed the initiative, but cautioned that there was no time to waste.

“Cambodia is only better than Laos. We are behind others in the region. If we do not start now, foreign logistic companies will dominate the market,” he said.

“It will take time, but I am very optimistic that it is possible for Cambodia if relevant player wakes up and starts working together now,” he added.

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