Logo of Phnom Penh Post newspaper Phnom Penh Post - Diversify to compete, WB economist says

Diversify to compete, WB economist says

Content image - Phnom Penh Post
A farmer waters his crops on the outskirts of Phnom Penh in June 2013. Vireak Mai

Diversify to compete, WB economist says

Cambodia's lagging agriculture and nascent manufacturing sectors need to diversify as the threat of regional competition heats up, a World Bank economist warned yesterday, while enumerating the challenges the Kingdom faces after having officially graduated into a lower-middle income country last year.

Speaking at a EuroCham event in Phnom Penh, Miguel Eduardo Sanchez, senior economist for the World Bank, said Cambodia’s agriculture sector could no longer rely on wild swings in commodity prices for growth after years of global stagnation.

“Cambodia can no longer rely on land expansion schemes or commodity price booms to further develop the sector,” he said, noting how commodity prices for rice have been in decline since 2007.

“Going forward, Cambodia will have to focus on branding and diversification of crops,” he said. “National branding and raising the quality of standards for all export crops will be key and the private sector can help promote this.”

He added that the World Bank was working closely with the government to determine where it should invest in existing irrigation projects to help promote diversification, while clearly stating that the international financial institution would not look into developing costly new projects.

On the manufacturing front, which is still heavily dependent on low-skilled garment manufacturing, he said that Cambodia could see a wave of competition and its privileged status with the European Union’s Everything But Arms scheme eroded by the planned EU-Vietnam free trade agreement.

“Thinking ahead with the EU-Vietnam agreement, the majority of products Cambodia ships to the EU would then be duty-free for Vietnam,” he said. “For Cambodia it can still retain a share of the market, but companies should not be complacent and rely on low-end and low-capital intensive production.”

He added that foreign firms need to start investing in machinery to scale-up and develop capacity for producing raw materials to move beyond “low sophistication exports”.

“Cambodia is only now beginning to show smalls signs of garment and manufacturing diversification, especially in the footwear sector and bicycles and small electronics market,” he said.

MOST VIEWED

  • Municipal hall releases map detailing colour coded Covid risks by commune

    Phnom Penh municipal governor Khuong Sreng released an official map detailing the red, yellow and dark yellow zones within the city under the new lockdown orders for Phnom Penh announced on April 26. The designation of red, dark yellow and yellow corresponds to areas with high,

  • Inter-provincial travel ban lifted; Phnom Penh and Takmao not exempted

    The government on April 25 decided to lift the inter-provincial travel ban and the closure of tourist attractions across the country, effectively immediately. The travel ban and closures of all resorts were imposed on April 6 and 17 respectively in a bid to curb the spread of Covid-19,

  • Phnom Penh unveils rules for post-lockdown transition

    The Phnom Penh Municipal Administration issued a set of detailed guidelines for the seven days to May 12 after the capital emerges from lockdown at the onset of May 6. In the 14-page document signed by municipal governor Khuong Sreng released on the evening of May 5, the

  • Phnom Penh, Takmao lockdown extended for another week

    The government late on April 26 announced an extension of lockdown in Phnom Penh and adjacent Takmao town in Kandal province for another seven days – or longer if residents do not comply with Covid-19 preventive measures and the community outbreak does not subside – until May 5. According

  • Gov't mulls extension of Phnom Penh, Takmao lockdown

    The Inter-ministerial National Commission for the Control and Enforcement of Lockdown held a video conference meeting on April 25 to review a draft document on the extension of lockdown in Phnom Penh and adjacent Kandal province’s Takmao town. The meeting was chaired by Minister of

  • Gov’t issues guidelines as lockdown nears end

    The government has issued a five-page set of instructions to be enforced when the three-week lockdown of Phnom Penh and adjacent Takmao town in Kandal province ends on May 6. According to an announcement signed by Prime Minister Hun Sen on May 4, the instructions cover a