Trade and PovertyExperiences from Cambodia

CUTS Conference on “Trade, Development and Poverty Linkages:

Lessons and Future Directions” June 23, 2009, Jaipur, India

Content

1. Overview on Cambodia Economy

2. Overview on Cambodia Trade

3. Linkage between Trade and Poverty– Experiences from Cambodia garment trade

– Experiences from Cambodia tourism trade

– Experiences from Cambodia agricultural trade

4. Challenges ahead

1.1. Overview on Cambodian Economy

• Double digit growth during last 4 years (2004-2007)– Fast growing sectors: Garment export, Tourism trade services,

Construction

– Other sectors grew at a moderate rate

• 2008 GDP growth = 5.2 percent

• 2008 GDP = US$10.3 billion

• 2008 GDP per capita = US$703

1.2. Cambodian Economic Growth

Source: NIS and EIC

1.3. Cambodia’s Economic Growth 2008 (Selected Sectors)

Source: EIC data compiled from NIS

1.4. Economic Growth for 2009

Source: Data compiled from NIS and EIC

2.1. Trade and Economy

Source: NIS and EIC

2.2. Export Share by Sector

Total exports reached US$4.7 billion in 2008.

Source: NBC

2.3. Export Share by Country

Source: MOC

2.4. Import Share by Sector

Source: NBC

Total imports reached US$6.5 billion in 2008.

2.5. Import Share by Country

Source: MOC

2.6. FDI Share by Sector

Source: NBC

FDI reached US$3.8 billion in the first quarter of 2008.

2.7. FDI Share by Country

Source: NBC

US$806 million FDI flew into Cambodia in 2008.

3.1. Trade and Poverty

3.2. Garment trade

• Export-Oriented Industry

• High labor standard compliance required before exporting (Key linkage between trade and poverty)

• Generates direct incomes and employments to more than

320 000 workers

• About 1 million people indirectly are deriving their income from garment industry:– Business around the factory such as food, housing, transportation, etc

– Remittance: Families who have daughters/sons working in the garment sector are seen as better than those who are not.

• Garment trade helped to push poverty reduction pace

3.3. Tourism trade

• Siemreap province is the most popular tourist site in Cambodia.

• Siemreap is still among the poorest province in the country– Income and employment for tourist activities concentrate mostly in the

Siemreap town

• Tourism trade has limited contribution to poverty reduction pace. Missing linkages are:– Lack of infrastructure that connects towns to rural areas

– Lack of human resources

3.4. Agricultural trade

• Agriculture is the most important sector to Cambodia as 60-70 percent of Cambodians are farmers

• Agricultural export represents about 20 percent of total good exports, but mostly done through informal channels

• However, the poorest people are mostly found among farmers.– Lack of market news and marketing skills among farmers, thus price is

manipulated by external traders

– Farmers lack knowledge on procedure/standards of export products

– Lack of adequate infrastructure and irrigation system.

4. Challenges ahead

• During current global crisis:

– Current decline in Garment exports in 2009

– Lower tourists in Cambodia in 2009

– Current decline in FDI in 2009

• How to promote agricultural trade?

Thank You