Economic globalization and how it affects Cambodia
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Paññāsāstra University of Cambodia Faculty of Arts, Letters, and Humanities In Collaboration with Center for Khmer Studies Proudly Presents A Special Lecture on “Economic Globalization and the Economic Challenges Facing Cambodia” By Dr. Benny Widyono Former UN Secretary General’s Representative in Cambodia Srey Dim Conference Hall May 8, 2014 5:30-7:00 pm
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The great hope of globalization is that it will raise standards of living around the world. The reality shows that, until recently, developing countries continued to suffer from poverty and underdevelopment. Dr. Widyono highlights the global shifts in power over the last 500 years that have resulted in the so called "BRIC countries" (Brazil, Russia, India, China) gaining economic strength on the international stage and what effect this has on the poorest of the poor in these countries. Looking ahead, the economic prospects for Cambodia continue to be bright. However, Cambodia must intensify policies to reduce poverty by moving its labour force from subsistence agriculture to an expanded manufacturing, construction and service sector base. In this talk Dr. Widyono discusses the preparation for Cambodia’s integration into the ASEAN bloc in 2015 and what impact this will have.
Transcript of Economic globalization and how it affects Cambodia
Paññāsāstra University of Cambodia
Faculty of Arts, Letters, and HumanitiesIn Collaboration with Center for Khmer Studies
Proudly Presents
A Special Lecture on“Economic Globalization and the Economic
Challenges Facing Cambodia”
ByDr. Benny Widyono
Former UN Secretary General’s Representative in Cambodia
Srey Dim Conference Hall May 8, 2014
5:30-7:00 pm
ECONOMIC GLOBALIZATION
AND THE CHALLENGES TO
THE CAMBODIAN ECONOMY
BY PROFESSOR BENNY WIDYONO
Defining Economic Globalization
EconomicGlobalizationinvolvesthecloserintegrationofnationaleconomiesintotheinternationaleconomythroughincreasedflowsof
GOODSANDSERVICES
Defining Economic Globalization
GOODSANDSERVICES
INVESTMENTSBYMULTINATIONALCORPORATIONS
Defining Economic Globalization
GOODSANDSERVCIES
INVESTMENTSBYMULTINATIONALCORPORATIONS
FINANCIALCAPITAL
Defining Economic Globalization
GOODSANDSERVICES
INVESTMENTSBYMULTINATIONALCORPORATIONS
FINANCIALCAPITAL LABOR
Defining Economic Globalization
HOPE AND REALITY
THEGREATHOPEOFECONOMICGLOBALIZATIONISTHATITWILLRAISESTANDARDSOFLIVINGAROUNDTHE
WORLD
THEREALITYISTHATUNTILRECENTLYDEVELOPINGCOUNTRIESCONTINUETOSUFFERFROMPOVERTYAND
UNDERDEVELOPMENT
THE THREE TECTONIC SHIFTS IN ECONOMIC GLOBALIZATION
I.TheRiseoftheWest
2.TheriseoftheUS
3.TheriseofChinaandtherest
THE FIRST TECTONIC SHIFT: THE RISE OF
THE WEST SINCE THE 15TH CENTURY AND ACCELERATED
DRAMATICLALY SINCE 1820s THROUGH INDUSTRIAL REVOLUTION
COLONIALISM IN 1945
WIDENING GAP BETWEEN WEST AND AFRICA
1820: Gap between
Britain and Africa was four to one
1998: Gap between USA and Africa is
20 to one
Angkor Wat built in 1150Notre Dame de Paris built in 1345
Angkor Wat and Notre Dame de Paris
THE SECOND TECTONIC SHIFT:
RISE OF THE USStarted at the closing years of the 19th
century
In the closing years of World War II its dominance unrivaled
TEHE WORLD ECONOMIC ORDER SHAPED AT BRETTON WOODS
ECONOMIC POWER CONCENTRATED IN NORTH AMERICA AND WESTERN EUROPE: GATT, THE WORLD BANK AND THE IMF
COMMUNIST EASTERN EUROPE AND CHINA IN ISOLATION
THIRD WORLD WERE INTEGRATED IN WORLD ECONOMY THEY NEITHER MANAGED NOR CONTROLLED
THE WORLD DURING THE COLD WAR
THE THIRD TECTONIC SHIFT: RISE OF
CHINA AND THE REST SINCE THE 1980S UNTIL TODAY
THE ERA OF ECONOMIC GLOBALIZATION
The end of the cold war
1989
The collapse of the Soviet Union 1989
Reunification of Germany
1989
Information and
technological revolution
The rise of Brazil, Rusia,
India and China (BRIC)
Soviet Union 122 to 1991 Break-up of Soviet Union 1991
BREAK UP OF THE SOVIET UNION
GDP RANKING BY PPP IN BILLION US DOLLAR
Rank Country GDP (PPP) $Billion Year — World 85,538 2012
— European Union 16,805 2012
1 United States 15,685 2012
2 China 12,471 2012
3 India 4,793 2012
4 Japan 4,491 2012
5 Russia 3,380 2012
6 Germany 3,308 2012
7 Brazil 2,366 2012
8 France 2,355 2012
9 United Kingdom 2,265 2012
10 Mexico 2,015 2012
THE GIANT ASIAN DRAGON AWAKENED
IN THE OLD DAYS CHINA WAS VERY BIG BUT ALSO VERY POOR
TODAY CHINA HAS AWAKENED AND HOW?
CHINA’S AWAKENING IS RESHAPING THE GLOBAL POLITICAL AND ECONOMIC LANDSCAPE
GAIGE KAIFANG 改革开放 reform and opening up
More than tenfold increase in GDP since 1978
USA VERSUS CHINA 2013
CHINA’S SPECTACULAR ECONOMIC GROWTH
1) manufacturing: greatly assisted by outsourcing of jobs by American and European MNCs to China
2) construction: massive urbanization and infrastructure expenditures by the government
EXPORTS RANKING BY COUNTRY IN US DOLLAR
Rank Country Exports Date of information
— World $17,779,000,000,000[2] 2011 est.
— European Union (minus internal trade) $ 2,170,000,000,000[3] 2011 est.
1 China $ 2,050,000,000,000 2012 est.
2 United States $ 1,612,000,000,000 2012 est.
3 Germany $ 1,492,000,000,000 2012 est.
4 Japan $ 792,900,000,000 2012 est.
5 France $ 567,500,000,000 2012 est.
6 Netherlands $ 556,500,000,000 2012 est.
7 South Korea $ 552,600,000,000 2012 est.
8 Russia $ 530,700,000,000 2012 est.
9 Italy $ 483,300,000,000 2012 est.
10 Canada $ 481,700,000,000 2012 est.
Foreign exchange reserves in millions of US dollars
1 People's Republic of China 3,341,000 Dec 2012[1]
2 Japan 1,238,713 Jun 2013[2]
Eurozone
808,192 May 2013[2]
3 Saudi Arabia 656,900 Dec 2012[1]
4 Russia 518,431 May 2013[2]
5 Switzerland 517,622 May 2013[2]
6 Republic of China (Taiwan) 406,062 May 2013[3]
7 Brazil 374,417 May 2013[2]
8 Republic of Korea 328,095 May 2013[2]
9 Hong Kong 305,713 May 2013[2]
CHINA TOP INVESTOR AND AID GIVER TO CAMBODIA
Loans and grants from China during the period 1992 to 2013 have amounted to $2.7 billion.
From 1994 to 2012, total Chinese investment in Cambodia has reached $ 9.17 billion.
China is also one of the leading trading partners of Cambodia. Last year, bilateral trade volume accounted for $2.9 billion U.S. dollars and it is expected to reach $5 billion by 2017.
Per Capita Income by PPP method selected countries
THE MILLENIUM DEVELOPMENT GOALS
In Sub Saharan Africa almost half the population live on $1.25 per day
Sub-Saharan Africa saw the number of people living in extreme poverty rise steadily, from 290 million in 1990 to 414 million in 2010, accounting for more than a third of people worldwide who are destitute
Successful Poverty reduction in Cambodia
In Cambodian poverty has fallen sharply also. The percentage of poor people w living on $1,25 a day has more than halved within seven years to around 20 percent in 2011
However, in order to reduce poverty in the future, Cambodia must drastically move its labor force from subsistence agriculture to an expanded manufacturing, construction and services base
THE THREE ENGINES OF GROWTH IN CAMBODIA
CAMBODIA TODAY
Population 14.9 million
Population growth 1.8 percent
GDP (PPP, int’l US$) 37.1 billion
GDP per capita (PPP, int’l US$) 2,494
Worlds top ten Multinational Corporations (MNCs) in 2012
Company Industry Revenue (USD
billions) FY2012
1 Exxon Mobil Corporation Oil and gas $482 Irving, Texas
2 Royal Dutch Shell Oil and gas $481 The Hague; London
3 Walmart Retail $469 Bentonville, Arkansas
4 Sinopec Group Oil and gas $441 Beijing
5 BP Oil and gas $388 London
6 China National Petroleum
Corporation
Oil and gas $378 Beijing
7 Saudi Aramco Oil and gas $356 Dhahran
8 Vitol Commodities $297 Rotterdam; Geneva
9 State Grid Corporation of
China
Electric utility $265 Beijing
10 Volkswagen Group Automotive $254 Wolfsburg
The rebirth of regionalism in
international trade
TOWARDS AN ASEAN ECONOMIC COMMUNITY IN 2015
TOWARDS AN ASEAN ECONOMIC COMMUNITY IN 2015
Objective of AEC: to transform ASEAN into a
single market of 600 million people with free
movement of goods, services, investment,
skilled labor, and freer flow of capital
Annual asean summit prepare for aec
Annual ASEAN Summit hosted by Cambodia in Phnom Penh Cambodia 18 November 2012
PHNOM PENH GAVE BIRTH TO RCEP
Regional Comprehensive Economic Partnership (RCEP) is a Free Trade Agreement scheme of the 10 ASEAN Member States and its FTA Partners (Australia, China. India, Japan, Korea and New Zealand to be concluded by the end of 2015
WILL THE TARGET DATE OF 2015 FOR AEC BE ACHIEVED?
THE TARGET DATE OF 2015 MUST BE SEEN AS A MILESTONE RATHER THAN THE END IN THE CONTINUING PROCESS OF INTEGRATION.
CLVM VERSUS asean Six
The Brunei ASEAN Economics Ministers
summit on 15th August 2013 declared that
ASEAN has implemented 80% of measures under the
AEC blueprint
CONCLUSION
