C AMBODIA'S export income was $457 million last year - three quarters of it
coming from timber sales and black-market re-exports of gold and
cigarettes.
Total trade approached $1 billion, according to 1994 National
Bank figures.
Gold and cigarette re-exports - coming into Cambodia from
places such as Singapore, and then on to booming, though restrictive neighboring
markets - were worth $140 million.
Timber exports were worth $197
million. Total exports were up from $284 million in 1993.
Imports last
year were worth $643 million, up from $471 million in 1993, leaving Cambodia
with a balance of trade deficit of $186 million.
"The numbers are small,
but you would say it's pretty healthy, if you were to not look at what has gone
on before, or what will go on in the future," said Peter Parsons, the
statistical advisor to the International Monetary Fund, who directed the
report.
The study provides a snapshot of a tiny economy whose consumer
buying power is increasing with more and more cars, oil, electronic goods,
construction materials and other products being imported.
It also shows
an enormous amount of cigarettes and gold being brought in and shipped out
again.
The report says about one third of the imports were re-exported,
principally gold and cigarettes.
But potentially worrisome is that the
two largest sources of foreign exchange coming into the economy were $254
million in foreign aid, and the $197 million in timber, both of which are at
risk as future income sources.
The government announced a ban on log
exports in April in an effort to preserve the environment.
Finance
Ministry Under Secretary Chhea Peng Cheang said Sept 19 that the finance
ministry only expects to report $20 million in log exports for 1995.
He
said the intention is to replace these exports with value added products, such
as furniture.
"Two companies have been licensed for export," he
said.
He said officials are working with the Council for Development of
Cambodia (CDC) to develop furniture exports.
The foreign aid in the
balance of trade report is money actually spent, not what was pledged.
It
shows that aid flowing into Cambodia was lower in 1994 than in 1993 when it
totalled $334 million, but in 1993 aid was inflated by a special $55 million
debt-clearing donation.
Total aid for 1995 is still being spent and
hasn't been calculated yet, and 1996 budgets in most cases haven't been arrived
at yet, but the United States has already indicated that aid to Cambodia will be
cut due to the U.S. budget deficit.
"We are going to see cuts in aid in
Asia, possibly as much as 40 percent, USAID deputy representative Carol
Lancaster said this week.
She said the cuts in Cambodia may not be as
deep as in other countries.
The U.S. contributed $41 million this
year.
The aid figures in the balance of trade report do not include loans
from institutions such as the World Bank and Asian Development Bank, which have
been increasing their lending to Cambodia.
The report shows that $13.9
million in foreign aid was spent on salaries, mostly for foreigners, but also
for Cambodians on salary with NGOs.
The imports included $75 million in
construction materials for the aid projects, $38 million in motor vehicles and
$25 million in drinks, and $90 million in cigarettes and $70 million in gold,
most of which were re-exported.
The exports included besides the timber,
$25 million in rubber, and $227 million in re-exports - in other words about one
third of the imports were shipped out again as exports, making transshipping one
of Cambodia's biggest businesses.
Direct foreign investment in 1994 was
$69 million, of which about $59 million represented the capitalization of the
banking sector.
The money flowed into the National Bank at a rate of $5
million per bank when a flurry of banks was licensed in 1994.
The report
puts direct foreign investment at just $10 million. That doesn't include
investment by Cambodians.
The IMF did a balance of trade estimate a year
ago, but the numbers weren't as comprehensive.
The study is significant
for policy makers who need to have an idea of the volume and type of
international transactions occurring in order to establish policies on interest
rates, inflation and other fiscal measures.
Parsons said that the numbers
were in many cases estimates culled from a variety of ministries and
Customs.
The aid numbers come from the NGOs spending the money and the
government.
Because rubber, for example, is not taxed as an export, the
estimate of $25 million in rubber exports comes from the Ministry of
Agriculture.
The Ministry of Agriculture has said in the past that rubber
smuggling across the border to Vietnam is a major problem.
The trade
study provides no estimates for various goods that are widely said to be
exported on the black market out of Cambodia, such as rubies and
drugs.
However it estimates that about $140 million worth of gold and
cigarettes were re-exported.
Cheer Peg Cheering, a finance official, said
the government is aware there is a large amount of what he called "cross border"
trading.
"It's normal, but we have a policy not to encourage it," he
said.
"We don't encourage it because we know that the real economic
growth is in production, private investment," he said.
No one really
knows the extent of this trade, but the principle behind it is clear enough -
Cambodia has relatively low tariffs and foreign traders can get access to the
booming Vietnamese market, and avoid its stiff tariffs and trade restrictions,
by sending their goods via Cambodia.
Cheer Peg Cheering said Vietnam
sends merchandise into Cambodia as well.
The border trade has been going
on for years, say Phnom Penh businessmen, but there is no great impetus to stop
it because the traders aren't breaking Cambodian law.
"As Vietnam moves
towards reducing its trade barriers the problem will get reduced," said one
Phnom Penh businessman.
