Cambodian total export values amounted to $5.9 billion, a year-on-year increase of 11.7 percent in the first five months of this year. The value of Cambodia’s total imports amounted to $8.1 billion, a decrease by 1 percent in the same period, compared with 2019, according to data from Economic Diplomacy – Socio-economic trends from the Ministry of Foreign Affairs and International Cooperation (MFAIC).
The decline in the growth of import values was because of the sluggish economic activity in March (0.4 percent) and negative growth in April (13.9 percent) and May (26.5 percent).
Meanwhile, the import of major goods decreased, especially construction materials, textile products (especially cloth) and machinery, the report said.
The report said, in general, Cambodian exports still maintained a favourable growth level although trading partner countries and the world have faced the COVID-19 pandemic. The steady growth was attributed to a high growth of export values in January (25.4 percent) and February (22.8 percent) and May (25.3 percent).
Permanent Secretary of State for Ministry of Economy and Finance Vongsey Vissoth said that although exports of the garment sector have dropped, but the total amount of Cambodia’s exports to the international market in the first five months remained positive.
“Our exports of the garment sector dropped, especially to the EU, but we must think about the total export products from Cambodia to international markets, where we see growth such as bikes, rice, electronics and some raw materials from agriculture. It is a resilient economy. We have strong fundamentals in both the economy and financial system,” Vissoth said.
The growth of exports stem from an increase of electronics by 45 percent, bikes by 18 percent, rice by 29 percent and other products by 30 percent while exports of manufacturing dropped around 6 percent and rubber by 27 percent.
The Labour Ministry’s spokesman Heng Sour said at a news conference on Government Measures in Response to the Impact of COVID-19 at the Ministry of Economy and Finance (MEF) in early July that in the first half of 2020, Cambodia’s garment exports were around $3.784 billion, a fall of 5.4 percent from more than $4 billion in the same period in 2019.
“The reason for the decrease is because of the impact of COVID-19. Purchasing also dropped globally. The drop is not only in Cambodia, but also in other garment-producing nations such as Bangladesh and Vietnam,” Sour added.
Cambodia finally made an effort to negotiate more free-trade agreements (FTAs) with other key markets recently but it could have gone down that route decades ago to diversify markets instead of remaining complacent over the Everything but Arms (EBA) trade deal with the EU and the Generalised System of Preferences (GSP) privileges, according to David Van, a Cambodian entrepreneur.
He said the urgency of plying that path had become blatant following the EBA 20 percent
revocation coupled with the COVID-19 predicament and the EU partial blacklisting process.
“Nonetheless, concluding FTAs would not suffice because Cambodia also had to address the quality and competitiveness of its exportable products which remains narrow,” said David.
“Providing attractive tax incentives remains essential in any given country to attract more foreign direct investment.
“In the 21st century global trade, an outdated comparative advantage is replaced by competitive advantage. It means Cambodia has to work harder to enhance her competitiveness.”
From January to May 2020, the Council for the Development of Cambodia (CDC) approved 92 private investment projects (excluding special economic zones – SEZs), which have increased by 11 projects.
The total investment value was $2.012 billion, which has decreased by 44.5 percent compared with the same period last year. Among 92 projects, 79 were invested in the industry sector (nine were bags and 25 were garments), four were in the tourism sector and the other four were in the service sector.
Total number of construction project proposals was 2,107 in the first five months of 2020, which increased by 495 with a total area of 7.8 million square metres and a total value of $3,483 billion, compared with the same period last year.
- Tags: exports