Strong growth in garment, textile and agricultural exports drove a 42.7 per cent year-on-year increase in Cambodia’s total exports for 2011, official Ministry of Commerce data shows.
The Kingdom exported US$4.98 billion in goods last year, compared with $3.49 billion the year before.
Market diversification and a relaxing of rules of origin in the euro zone fuelled last year’s growth, insiders and experts say.
Heightened awareness of export schemes among investors, as well as government facilitation, also contributed to growth.
“We got duty-free export treatment in the European Union, so we have more buyers. We had a huge increase in exports to that market last year,” Garment Manufacturers Association of Cambodia (GMAC) secretary-general Ken Loo said yesterday.
He noted the importance of exports to the European Union for Cambodia’s garment manufacturing sector.
Hiroshi Suzuki, chief economist for the Business Research Institute for Cambodia, agreed that the lowering of trade barriers by the euro zone had been a driving factor for export growth in the past year.
Cambodia’s total export of garments and textiles rose about 25 per cent year-on-year in 2011 to $4.25 billion, compared with $3.4 billion the year before, data shows.
Of this, garment exports to the European Union rose more than 42 per cent to $1.3 billion. Exports to the United States, worth $1.84 billion, rose 11.4 per cent, retaining the country’s number-one spot among importers of Cambodian goods.
Garment exports to all other countries, including Japan and Canada, increased 38 per cent, hitting $980 million last year from $645 million in 2010, according to the data.
Ken Loo said exports to Japan alone increased by 100 per cent last year. The sharp increase in the Kingdom’s total exports in 2011 marked vital progress of its market diversification, Peter Brimble, senior country economist at the Asian Development Bank, said yesterday.
“It shows that Cambodia is still quite competitive, and was able to take advantage of the improved access to the European market under the [Everything But Arms] concession,” Brimble said.
“I also feel that it reflects the beginning of Cambodia’s move towards diversification away from low value-added garments to higher value-added garments and other manufactured products – and especially the growing inflow of Japanese investors that we saw very prominently last year.”
Total agricultural exports rose by more than 100 per cent, reaching $422 million last year from $197 million in 2010.
Chan Sophal, president of the Cambodian Economic Association, said awareness of local exporters and the government’s call to export one million tonnes of milled rice by 2015 had also contributed to the increase. “We [exporters] have prepared ourselves to meet [importer] requirements. That’s why we see increases in both garment and agricultural exports,” he said.
Regarding uncertainty in the EU and US economies, GMAC’s Ken Loo voiced no concern on potential impact on Cambodia’s exports, saying the sovereign-dept crisis in Europe would not hurt the Kingdom.
He declined to speculate on export figures for 2012.
Hiroshi Suzuki, of the Business Research Institute for Cambodia, said the economic crisis in the West would have some impact on Cambodia’s economy during the second half of this year.
“I cannot be so optimistic on the estimation for this year,” Suzuki said.
Cambodia, however, could maintain its comparative advantage over neighbouring competitors such as Vietnam, Thailand and China, he said.
“If the US economy can come back to good condition during the second half of this year, the negative effect to Cambodian exports might be limited.”