Logo of Phnom Penh Post newspaper Phnom Penh Post - SEZs hold key to economic corridor growth

SEZs hold key to economic corridor growth

The main entrance to the Phnom Penh Special Economic Zone, as seen in May.
The main entrance to the Phnom Penh Special Economic Zone, as seen in May. Hong Menea

SEZs hold key to economic corridor growth

Industrial parks that offer special privileges to companies that operate inside them play a dominant role in attracting investment in the region, but countries must focus more on building up their infrastructure and human resources to take advantage of increased connectivity, development experts said yesterday.

Officials and development partners attending the 8th Greater Mekong Sub-Region (GMS) Economic Corridors Forum in Phnom Penh said targeting border areas for special economic zones (SEZs) provides a tangible start for attracting foreign investment and stimulating cross-border trade.

“An initiative that has captured interest in the sub-region is the development of special economic zones, industrial parks and economic clustering, which have proven to be an effective tool for attracting investment and fostering job creation,” said James Nugent, director-general of the Southeast Asia department at the Asian Development Bank (ADB).

However, he added that in order for economic corridors to reap the full benefits, countries need to become more competitive.

“To this end, we need to make sure that the corridor can effectively access global supply chains,” he said. “We need to make them more attractive to investors by consistently establishing sound policies, and providing the requisites for production and trade.”

Economic corridors, a term coined by the ADB, aim to develop transport networks and other linkages between economic hubs along a defined geography in order to stimulate social and economic development in areas surrounding the route.

Given the vast area covered by GMS economic corridors – which crisscross Cambodia, Laos, Myanmar, Thailand, Vietnam and southern China – governments and development partners need to agree to choose specific areas that have the greatest potential for economic activity, he added.

In order to do this, GMS economic corridors need to expand on existing partnerships for implementing and financing major infrastructure projects, said Sok Chenda Sophea, secretary-general of the Council for the Development of Cambodia (CDC).

He added that Cambodia will take advantage of development funds provided through the China-backed Asian Infrastructure Investment Bank (AIIB), as well as through its long-standing bilateral partners, to increase the Kingdom’s infrastructure.

While he noted that SEZs are the best solution for the short term, he said this was the only model that could be readily expanded once large-scale industrialisation eventually takes hold.

“In the end, we hope that we can replicate that model nationwide as [SEZs] were always meant to be a pilot project that we could then generalise.”

However to achieve that, he said GMS countries need to cooperate on reducing the barriers of regional trade.

“Being attractive is about having open borders and working with relevant authorities in other countries, but all sides need to be ready to engage,” Sophea said.

CDC has approved 30 registered SEZs in Cambodia as of November 2015, but only nine are operational.

MOST VIEWED

  • Website advises travellers to stay clear of Angkor Wat

    An Australian website has advised travellers to avoid Angkor Wat during their trip to Southeast Asia because the ancient temple is showing signs of rapid erosion and faced water management issues. In a recent article entitled Best places to go in 2020: 12 destinations you should avoid

  • Chinese firms to build new PP airport

    Three enterprises, all Chinese-owned, have been chosen to build the new airport that will service the Cambodian capital, the company in charge of the project said. Cambodia Airport Investment Co Ltd said a total of five companies had entered the bidding process. Yee Con Long,

  • Shipments of mango to South Korea poised to begin this week

    Exports of Cambodian mangoes to South Korea will begin this week after Korean authorities gave the nod. The Ministry of Agriculture, Forestry and Fisheries’ Department of Plant Protection, Sanitary and Phytosanitary Requirements director Ker Monthivuth told The Post on Sunday that after several inspections of

  • Passenger taxi boat ridership sinks despite free services

    Passenger taxi boat traffic has dropped by about five per cent compared to the same period last year, despite the government providing free service for garment workers until next year, Phnom Penh Autonomous Bus Transportation Authority director Ean Sokhim said on Monday. In 2018, the Phnom

  • Kingdom drafting new law to strengthen immigration

    The Ministry of Interior on Tuesday said it had formed a working group to draft amendments to the Law on Immigration. Its secretary of state Sok Phal told The Post that the amendments will strengthen the management of immigrants in line with the current situation.

  • Jica seeks to turn PP, towns into smart cities

    Japanese International Cooperation Agency (Jica) representatives have sought support from Siem Reap’s Apsara National Authority (ANA) to transform the ancient capital into a smart city. The call was made in February last year after the government approved three cities to join the Asean Smart