Cambodia is well-prepared to minimise economic risks when it graduates from its Least Developed Countries status, according to a senior official at the Ministry of Commerce on May 7.
Four LDCs – Cambodia, Laos, Bangladesh and Nepal – met at a virtual workshop last week to explore potential solutions for managing a smooth exit from their UN designations, discuss potential challenges in the post-LDC era, and assess the impact of Covid-19 on the textile and garment sectors.
Ministry secretary of state Pich Rithy participated as a speaker at the event, which was co-organised by the World Trade Organisation, UN, UN Department of Economic and Social Affairs, UN Conference on Trade and Development, and International Trade Centre.
Rithy stressed the importance of the garment sector in promoting Cambodia's economic growth, and the benefits of preferential tariffs for increased export volumes.
He highlighted that ridding itself of the LDC status could present economic pains for the Kingdom, affecting tariff preferences, rules of origins, investment attractiveness, competitive advantages and opportunities for trade assistance, and hence compounding the impact of the Covid-19 crisis on garments and apparels.
"To address these challenges, Cambodia has outlined policies and strategies so that the Kingdom can strengthen its competitive position and prepare for a successful exit from the LDC status. These include the diversification of export markets through bilateral and multilateral free trade agreements," Rithy said.
Garment Manufacturers Association in Cambodia deputy secretary-general Kaing Monika told The Post that private-sector development is the engine of economic growth, and raises people's living standards.
“Everyone enjoys the fruit of this growth, not only the workers. Among other private sector players, we are one of the government's partners working jointly to materialise this goal through continuous administrative reforms and policies conducive to the business environment.
“As we grow and develop, we will graduate from LDC status, which is indeed a welcome milestone, despite losing some benefits such as preferential trade treatment unilaterally given by the developed countries.
“But this is not without a solution. We appreciate and support the government's efforts in trying to maintain better and broader investment and market access through both bilateral and regional trade agreements.
“Skills development, productivity improvement and internal administrative reforms shall be our ongoing job,” he said.
The Kingdom exported $2.410 billion worth of garments, footwear and travel goods in the first quarter of this year, shrinking 6.48 per cent from the $2.577 billion posted in the corresponding period of 2020, according to data from the General Department of Customs and Excise of Cambodia.
Analysed by category, garments fell 6.43 per cent from $1.897 to $1.775 billion, footwear slumped 7.33 per cent from $341 to $316 million, and travel goods – including suitcases, backpacks, handbags and wallets – declined 5.89 per cent from $339 to $319 million.