The total value of goods traded between Cambodia and Indonesia registered a one-fourth increase in the first four months of 2023 compared to a year earlier, defying the global trend of declining exports amid a worldwide economic downturn exacerbated by the Ukraine conflict and geopolitical disputes between major powers.
The volume of merchandise traded between the two countries in January-April 2023 was to the tune of $392.065 million, up 27.01 per cent year-on-year from $308.687 million and up 27.82 per cent half-on-half (compared to July-October 2022) from $306.73 million, according to provisional Customs (GDCE) data in “International Merchandise Trade Statistics” bulletins.
At the same time, Cambodian goods exports to Indonesia amounted to $14.156 million, up 60.6 per cent year-on-year from $8.815 million but down 13.3 per cent half-on-half from $16.32 million. The Kingdom imported $377.909 million worth of goods from ASEAN’s largest economy, up 26.02 per cent year-on-year from $299.872 million and up 30.13 per cent half-on-half from $290.41 million.
Cambodia’s trade deficit – the amount by which a country’s imports exceed its exports – with the archipelago nation for the four-month period stood at $363.754 million, expanding by 24.98 per cent year-on-year from $291.056 million as well as by 32.72 per cent half-on-half from $274.08 million.
Indonesia was Cambodia’s seventh biggest trading partner for the period, representing 2.586 per cent, 0.196 per cent and 4.767 per cent of the Kingdom’s international trade ($15.161 billion), exports ($7.234B) and imports ($7.927B), respectively, GDCE figures indicate.
Royal Academy of Cambodia economist Hong Vanak remarked that the increase in trade volume between the Kingdom and Indonesia notwithstanding global reductions underscores the mutual importance of bilateral commercial ties.
Indonesia’s large geographical area, population, and production capacity ensure that the trade balance is skewed in favour of the Group of 20 (G20) member, Vanak suggested, although he acknowledged that there are also many Indonesian investors doing business in Cambodia.
Vanak stressed that Cambodia and Indonesia are both members of the Regional Comprehensive Economic Partnership (RCEP) and have similar bilateral agreements, which he argued are key for boosting two-way trade.
“Even though Cambodia’s trade balance with Indonesia is still significantly negative, I anticipate Cambodia’s exports to Indonesia will grow step-by-step as the Kingdom’s agricultural and industrial production capacity is currently steadily rising,” he said.
In April alone, the Cambodia-Indonesia merchandise trade volume came to $87.21 million, down 9.03 per cent from $95.9 million in April 2022 (year-on-year), down 3.8 per cent from $90.69 million in October 2022 (half-on-half), down 0.95 per cent from $88.045 million in January 2023 (quarter-on-quarter), and down 25.72 per cent from $117.41 million in March 2023 (month-on-month), according to the GDCE.
Cambodian exports reached $1.95 million, up eight per cent year-on-year from $1.80 million, but down 39 per cent half-on-half from $3.17 million, down eight per cent quarter-on-quarter from $2.114 million, and down 59.6 per cent month-on-month from $4.82 million.
Imports stood at $85.264 million, down 9.4 per cent year-on-year from $94.064 million, down 2.6 per cent half-on-half from $87.517 million, down 0.8 per cent quarter-on-quarter from $85.930 million, and down 24.27 per cent month-on-month from $112.590 million.
Indonesia was Cambodia’s fourth largest import source in April, representing 2.231 per cent, 0.106 per cent and 4.125 per cent of the Kingdom’s international trade ($3.909B), exports ($1.842B) and imports ($2.067B) for that month, GDCE numbers show.
Of note, direct commercial flights between Phnom Penh and Jakarta were reinstated by AirAsia on April 19, after a Covid-19 hiatus.
In a late March interview, Cambodia Association of Travel Agents adviser Ho Vandy commented that flights connecting the Kingdom to Indonesia – the fourth most populous nation, which ranks among the top 20 economies – would be a boon for the local tourism industry and the broader economy, bringing in more Indonesian sightseers as well as promoting bilateral political and trade ties.
“A direct Jakarta-Phnom Penh route will be of great benefit to Cambodian tourism, since Indonesian tourists are particularly fond of the Angkor Wat temples in Siem Reap province, in addition to Phnom Penh, while Cambodian tourists like to visit Bali, Indonesia,” he said.
In 2022, the Cambodia-Indonesia merchandise trade was worth $948.533 million, up 48.27 per cent on the previous year, according to the GDCE.
Cambodia’s exports to and imports from Indonesia totalled $36.839 million and $911.694 million, respectively, up 15.9 per cent and up 49.96 per cent, expanding the former’s trade surplus with the latter by 51.84 per cent on a yearly basis to $874.854 million.