The strengthening of the logistics relationship with Thailand will help the transport sector in Cambodia reduce costs and time, thereby luring more investment.
To make this deal sacrosanct, Ministry of Public Works and Transport secretary of state Koy Sodany and Danucha Pichayanan, secretary-general of Thailand’s National Economic and Social Development Council (NESDC), signed a memorandum of understanding (MoU) on July 19 in Bangkok, Thailand.
The MoU is aimed at establishing cooperation in the spirit of mutual understanding and a goodwill framework, and enhancing closer ties between both countries in the field of logistics.
According to the deal, both parties will work on three areas, namely logistics policy and legal framework; logistics cost per gross domestic product (GDP) and logistics performance index (LPI); and strengthen institutional and stakeholder capacity in the field of logistics.
Chea Chandara, president of the recently-renamed Logistics and Supply Chain Business Association in Cambodia (Loscba), told The Post on July 20 that Cambodia and Thailand share a common border, across which they regularly transport goods. As such, the MoU will provide positive results for the parties, he said.
The transport sector plays an important role in economic activity, therefore when the transport sector is expensive and onerous, it will automatically undermine competitiveness and raise the price of goods, he added.
“Because Cambodia and Thailand have a lot of transport links every day, when there is an MoU, coordination with each other would certainly bring mutual benefits to both countries,” Chandara said, adding that he is not able to quantify the benefits as yet.
However, he is optimistic that the transport sector in Cambodia would give rise to a positive trend, thanks to ongoing infrastructure construction including roads, airports and ports.
Cambodia Logistics Association (CLA) president Sin Chanthy said this is another new chapter of progress for the logistics sector, echoing Chandara’s comment that the two kingdoms share a contiguous border across which they move merchandise every day.
The MoU will not only facilitate cross-border shipments, but would also help to boost trade between the two countries, he said.
“As operators in the logistics sector, we are very pleased with this MoU, as it will speed up delivery and reduce costs to some extent,” Chanthy said.
Currently, the Cambodian-Thai transport sector is connected by land, railways (border), waterway and air, he noted.
Meanwhile, Sodany said the ministry is paying close attention to the drafting of a masterplan on the connection of multi-modal transport and logistics in Cambodia.
The masterplan features a $50 billion infrastructure development project (hardware and software) involving roads, railways, highways, waterways, ports and airports for the next 10 years.
Bilateral trade between Cambodia and Thailand rose 22.8 per cent to $2.297 billion in the first half of 2022 from a year ago, according to the General Department of Customs and Excise.
Exports to Thailand grew 36.7 per cent year-on-year to $495.778 million while imports climbed 19.5 per cent to $1.801 billion. Cambodia’s trade deficit with Thailand for the January-June period stood at $1.306 billion, expanding by 14 per cent on a yearly basis.