Subscribe Search

Search form

Logo of Phnom Penh Post newspaper Phnom Penh Post - UN points to weakness in garments, tourism

UN points to weakness in garments, tourism

UN points to weakness in garments, tourism

Workers process shrimp at Nautisco Seafood Manufacturing’s Sihanoukville factory. The United Nations said in a new report that Cambodia must diversify its economy.

Report says that Cambodia must diversify its economic base and become competitive or face a more prolonged downturn

Cambodia needs to diversify its economy and make traditional high-growth sectors more competitive if it wants to avoid years of sluggish growth, the United Nations warned in a report issued Monday.

The UN also called on the government to stimulate the economy through greater spending, particularly on social protections and programmes with broad public benefits.

Douglas Broderick, UN resident coordinator for Cambodia, said at a press briefing on the report that its findings touched on “the vulnerability of the economy, the narrowness of the economy. There’s a lot of things we can do to improve competitiveness”.

Among the many sectors classifed by the report as under-competitive, the garment industry received the lowest marks. Cambodia’s slump in garment orders has not been caused by American and European belt-tightening alone, the report said.

“The US imported 12.04 percent less garments during the first five months of 2009 compared to the same period in 2008,” it said. “Interestingly, Bangladesh, Vietnam and China exported more garments to the US in the first five months of 2009, while Cambodia’s exports to the US declined by 22 percent.”

Until Cambodia makes significant strides in improving mainstays such as the garment and tourism industries, as well as cultivating newer areas such as information and communications technology and valued-added manufacturing, the report said, agriculture is the Kingdom’s strongest potential source of growth.

Chan Sophal, president of the Cambodian Economic Association and leader of the report’s research team, said growth in the agriculture sector was characterised by expansion in the area of production, mainly through the conversion of degraded forest into farmland.

Chan Sophal said that this made the sector particularly responsive to opportunities in the market, such as when “cassava production doubled over one year in response to 2008 prices”, adding that it also multiplied the gains in productivity from new crop strains and farming methods delivered by development partners.

However, even though farm output rose by 5 percent this year, falling commodity prices meant that the agricultural sector contracted in 2009, Chan Sophal said.

The UN also called for increased domestic spending to help pull Cambodia out of the economic slump. It suggested stimulating the economy via targeted social programmes.

Broderick estimated that each dollar spent on progressive social programmes would be “multiplied from three to six times” in terms of economic benefits and avoided costs. The low relative cost of these programmes also makes them especially attractive, he said. “We’re not talking about a whole lot of money, and there’s a whole lot of incredible options.”

Thanks in part to “savings of $600 million dollars” put aside during recent years of robust economic growth, the government can still wield fiscal policy effectively despite revenue loss from the downturn, the report said.

“Instead of spending, [the government] saved, as you would normally do in case of a crisis,” Chan Sophal. “This is a time of crisis, so the government should use some of the savings.”


  • Kak Channthy, Cambodian Space Project frontwoman, killed in crash at 38 [Updated]

    Updated 5:05pm, Tuesday, March 20, 2018 Kak Channthy, frontwoman of popular The Cambodian Space Project, was killed Tuesday morning in a traffic accident in Phnom Penh. She was 38. Channthy, the internationally recognised singer-songwriter also known as “Srey Thy”, was reportedly travelling in a tuk-tuk on the city's

  • Australians protest Asean summit visit by PM Hun Sen

    Hundreds of protesters gathered in Sydney’s Hyde Park on Friday to protest against Cambodian strongman Hun Sen, who claimed to have been gifted millions of dollars by the Australian government ahead of a special Asean summit this weekend. An estimated 300 protesters, the majority of

  • One Australian, one Cambodian killed in explosion at military base

    Updated: 5:20pm, Friday 16 March 2018 An Australian tourist and a Cambodian soldier were killed in an explosion on Thursday afternoon at an army base in Cambodia’s Kampong Speu province. The Australian, whom the government initially identified as a technical demining expert in his 40s, and

  • Peeling back layers of prehistory in Battambang

    When the man passed away, he had not yet reached 50. He belonged to a tribe that had settled near the Sangker River in Battambang province, likely cultivating the fields and raising animals. On the side, they hunted for boars, and even turtles, one of which