Logo of Phnom Penh Post newspaper Phnom Penh Post - Hun Sen urges leaders to reduce trade deficit

Hun Sen urges leaders to reduce trade deficit

Hun Sen urges leaders to reduce trade deficit

PM tells officials to keep prices stable and fight bureaucracy

PRIME Minister Hun Sen has called for the government to reduce its trade deficit by increasing exports in a speech at the launch Thursday of the new Ministry of Commerce building in Phnom Penh.

Following a year in which Cambodia saw an 18.2 percent drop in exports, the prime minister said that all departments of government could help improve the deficit, which fell 14 percent last year due in part to the economic crisis.

“I am calling for you to concentrate on enhancing supply and export capacity, and to reduce trade deficits,” he told about 1,000 gathered government officials at the event. “By helping to facilitate trade, through keeping prices stable and reducing bureaucracy, we can ease the export process.”

Cambodia’s deficit fell to US$1.589 billion last year from $1.848 billion in 2008 as imports on everything from raw textiles to construction materials fell as growth stuttered to halt – although the GDP figure is yet to be published for 2009, international organisations including the World Bank and International Monetary Fund were forecasting a small contraction in GDP.

Although the deficit value fell last year, imports were 30 percent greater than exports in 2009, compared with a 29 percent difference in 2008 as the gap continued to widen in the wrong direction.

For instance, Cambodia imported $1.58 billion in goods from Thailand, but exported just $77.73 million in return, meaning that Thai shipments counted for 95 percent of total bilateral trade with the Kingdom.

With Vietnam the disparity was little better at 83 percent, according to figures supplied by the Vietnamese Embassy in Phnom Penh.

Hun Sen acknowledged this huge trade gap Thursday, also highlighting Cambodia’s rising exports. Overall, however, the decline in exports outstripped the fall in imports last year – shipments to the Kingdom fell 17 percent, according to official figures.

With Vietnam in particular increasingly investing in agri-processing plants in Cambodia, the government could expect for this gap to close in the longer term, but more immediately the trade deficit looks set to widen, according to an International Monetary Fund report in December.

“As the recovery starts to kick in, the deficit is projected to widen to more than 11 percent of GDP in 2010, owing principally to sluggish exports trailing rising imports and oil prices,” it said.

Hun Sen called on small and medium-sized businesses to produce high-quality goods that could also tap into domestic demand.

MOST VIEWED

  • Proof giants walked among us humans?

    For years a debate has waged about whether certain bas relief carvings at the 12th-century To Prohm Temple, one of the most popular attractions at the Angkor Wat Temple Complex in Siem Reap province, depicted dinosaurs or some rather less exotic and more contemporary animal,

  • Japan bank buys major stake in ANZ Royal Bank

    Japan's largest bank acquired more than half of ANZ’s shares in Cambodia on Thursday, according to a statement from Kith Meng’s Royal Group. Japan's JTrust Bank, announced that they had acquired a 55% of stake in ANZ Royal Bank. According to a Royal Group

  • Long way to go before Cambodia gets a ‘smart city’

    Phnom Penh, Siem Reap and Battambang will struggle to attain smart city status without adopting far reaching master plans, according to officials tasked with implementing the program. The brainchild of the Association of Southeast Asian Nations (Asean), the smart city program seeks to link up

  • New US bill ‘is a violation of Cambodian independence’

    After a US congressmen introduced bipartisan legislation that will enact sanctions on Cambodian officials responsible for “undermining democracy” in the Kingdom, government officials and the ruling Cambodian People’s Party on Sunday said they regarded the potential action as the “violation of independence and sovereignty