Search form

Login - Register | FOLLOW US ON

Logo of Phnom Penh Post newspaper Phnom Penh Post - Diversify, UN survey urges

Diversify, UN survey urges

The Cambodian eco­n­­omy’s severe lack of diversification could have unfavourable ram­­­ifications, resulting in higher food prices and increasing the gap between rich and poor, according to the UN’s Economic and Social Commission for Asia and the Pacific (ESCAP).

In a report to be released in Phnom Penh today, ESCAP identifies key policies Cambodia will have to address in order to come out ahead as the global economic downturn enters its second stage.

“The survey identifies major risks, but also presents analysis to inform policy,” said Daniel Jeongdae Lee, an associate economic affairs officer for ESCAP.

Along with poor infrastructure and ineffective monetary policy, the report names the Kingdom’s lack of diversification as a key issue.

Currently, Cambodia’s economy is dominated by the garment sector, which accounts for two-thirds of manufacturing and 80 per cent of export revenue, rendering the nation vulnerable to price changes abroad.

“Cambodia is [an] exporter of most garments, for which prices fell due to a highly competitive market, especially at the lower end,” a survey briefing paper reads.

The survey considers Cambodia an “aspiring country” – a developing country that has not benefited from high commodity prices and has yet to expand its productive capacities through diversification.

“Faced with decreasing prices for their [manufactured goods] and incentives to specialise in industries that require low-skilled workers, the country may fail to create new economic activities, which would reduce its growth prospects in the long-term,” it states.

The report cites a knowledge-intensive agricultural “green revolution” as the best way to stabilise food prices and prevent a repeat of what happened in 2011, when inflation shot from 3.3 per cent to 7.1 per cent in just six months.

Under Secretary-General for ESCAP Noeleen Heyzer urged Asia/Pacific nations to avoid putting all eggs in one basket.

“The message [ . . .] is that less-developed economies should resist the impulse towards commodity specialisation, which in turn can delay industrialisation, economic di­versification and the building of productive capacities,” she said.

To contact the reporter on this story: Bridget Di Certo at bridget.dicerto@phnompenhpost.com

0

Comments

Please, login or register to post a comment

Latest Video

Turkish Embassy calls for closure of Zaman schools

With an attempted coup against the government of President Recep Erdogan quashed only days ago and more than 7,000 alleged conspirators now under arrest, the Turkish ambassador to Cambodia yesterday pressed the govern

CNRP lawmakers beaten

Two opposition lawmakers, Nhay Chamroeun and Kong Sakphea were beaten unconscious during protests in Phnom Penh, as over a thousand protesters descended upon the National Assembly.

Student authors discuss "The Cambodian Economy"

Student authors discuss "The Cambodian Economy"

Students at Phnom Penh's Liger Learning Center have written and published a new book, "The Cambodian Economy".