4.4 ECONOMIC SECTORS |
|
4.4.1
AGRICULTURE, FORESTRY and
FISHERIES 239.
The RGC’s agriculture sector development policies focus on: (i)
the continued implementation of agricultural water policy and expansion
from 16.62 percent to 20 percent of rice cultivated areas, (ii) expansion
of cultivated areas, ensuring safety of land occupation and land
utilization, and preventing illegal and violent land occupation, (iii)
promoting the establishment of rural finance to provide the needed credit
to farmers for buying agricultural materials, (iv) direct public
investments by using external assistance and increasing private sector
development and investment in the agricultural sector, (v) strengthening
extension services, natural resource utilization
and management, and agricultural techniques to meet the requirement
of the domestic market and for exports, (vi) strengthening sustainable
utilization of fishery resource and increasing support for investment in
agro-industries, animal husbandry and fish raising, (vii) accelerating the
pace of privatization of rubber plantations, assisting private investment
companies to invest in large-scale rubber production, and encouraging
small holder rubber plantation, (viii) promoting application of forestry
policies and laws on forest management, and promoting planting of fast
growing and higher yield trees for utilization as fuel wood and charcoal,
(ix) Stopping and eliminating all illegal fishing activities, and (x)
cooperating with local authorities and other competent bodies to stop and
prevent illegal activities and strengthening inspection through
administrative penalties. 240.
Agricultural sector development targets to the year 2005 include: (i)
a continuing focus on food security, especially at community and household
level, and reducing poverty in the agricultural sector, (ii) increasing
food production, especially rice production and subsidiary crops, (iii)
increasing the exports of surplus agricultural products, (iv) improving
the quality of agricultural products and increasing the value added by
promoting the development of ago-industrial processing to foster the
creation of new jobs for rural area, (v) increasing family incomes and
reducing poverty by supporting diversified crop production with high
yields and low production costs, and (vi) managing the natural resource
through regulation and technical measures for sustainable exploitation. 241.
Expanding Agricultural Extension Services. The expansion of
research and agricultural extension services is a key component of the
strategy to boost agricultural productivity. Two new institutions, the
Department of Agricultural Extension (DAE)
and the Cambodian Agricultural Research and Development Institute (CARDI)
were established in MAFF with assistance from AusAid, which is continuing
support through a Cambodian Australia Agriculture Extension project.
Another programs is under discussion with JICA for the establishment of
Northwest Agricultural Research and Development in 5 provinces around
Tonle Sap Lake. Extension services previously provided by separate
technical departments are now being coordinated to meet the specific needs
of farmers. In addition, there are 14 functioning research station that
focus mostly on rice. These institutions suffer from shortage of funds,
lack of equipment and qualified personnel resulting in inadequate research
and extension. With assistance from the World Bank, several research
station are being rehabilitated and their personnel trained in areas of
variety evaluation and applied research. The Government is looking for
additional external assistance to ensure the continuance of farmer
training in the areas of integrated pest management techniques and the
distribution of new varieties of high quality rice seed developed by the
Cambodia-IRRI-Australia Project (CIAP). Complementing these measures will
be the strengthening of the Department of Planning, Statistic and
International Cooperation and the other Technical offices to undertake and
disseminate product analysis, identify potential for diversification,
market research, evaluate agribusiness ventures and to advice on
agriculture trade policy. 242.
Food Security. Cambodia
produces more rice than it needs in aggregate. The annual exportable
surplus has averaged about 10 percent of yearly rice production.
Similarly, there is adequate supply of livestock produce. Despite this
food surplus situation, about half the nation’s 24 provinces and
municipalities are food deficit, with 1/3rd of the population
unable to purchase minimum food requirements. This points to a need for
increasing efficiency of the food distribution system by:(i) reducing
transportation cost by improving road system,(ii) reducing marketing
margins by increasing efficiency of rice milling, wholesale and retail
outlets, and (iii) increasing imports of
lower grade rice for sale to low-income families. 243.
Boosting Rice Production and
Maximizing Farm Incomes. Rice yields in Cambodia will continue to show significant
variations due to high reliance on uncertain rainfall patterns. To develop
alternative income sources, the encourages farmers to undertake small farm
enterprises such as rearing farm animals and developing small ponds fish
rearing, food processing, food sale and provision of farm services i.e.
transportation, plowing and machine repair. Rice farmers are also
encouraged to plant some productive trees on their idle lands, as
additional employment opportunities for increasing their farm income.
However, farmers need credit to undertake these enterprises. At the same
time, there is a need for a change in farmer’s view of farming from one
that is seen as a way of life to one that treats farming as a business. 244.
Community Participation.
MAFF programs and policies will, where appropriate, be closely coordinated
with other institution involved, with the council for Rural and
Agricultural Development (CARD) as the coordinating body supporting
agricultural Programs and participation of farmer communities. Two of
MAFF’s basic functions involve providing
extension and research services to help farmers to acquire
knowledge on techniques and preventive measures in order to increase
production 245.
Strengthening Input
Distribution. Increased access and better use of quality agricultural
inputs is critical to increasing production of rice and other crops. At
present, the use of fertilizer by farmers is highly variable because it is
often not available and when it is, the price is often prohibitive. This
situation reflects lack of market information on the needs of farmers,
which impedes efficient distribution of fertilizer and other agricultural
inputs. Considerable price differences between regions that cannot be
explained by cost of freight reflect collection of illegal taxes and lack
of competition among input suppliers. The Government is resolved to
promote a competitive environment, the recently completed reform of the
state-owned COCMA concerning the agricultural inputs and a stricter
enforcement against illegal tax collectors should redress some of these
issues. In addition, the Agricultural Materials Law will provide legal
standards for inputs including environmental standards and a monitoring
and enforcement agency will be established to supervise its effectiveness. 246.
Land Utilization and
Management. Currently, cultivated land area has increased at about
30,000 ha. annually . This rate will be doubled over the 2002-2005 with at
least2/3rds of new land to be devoted to tree crops such as
rubber, cashew nuts, coffee, coconut fruits and palm oil. Gross margins
from these crops are about US$2,000 per hectare compared with US$400-900
per hectare for annual crops, except vegetables. Farmers growing two
hectares of any of these tree crops will enjoy farm incomes well above the
poverty level. A crash program will be implemented to make available
supplementary irrigation in rice growing areas, in order to enable farmers
to plant a second crop of rice or other annual crops. Growing additional
crops provide additional employment opportunities and increase both food
supply and farm incomes. The RGC will allocate some state land for
agricultural development, with about 50,000 ha. of new land made available
each year for development by small farmers, private sector, and public
development agencies. This land will be sold at market price for
commercial enterprises and at nominal rates to low-income farmers. This is
to ensure that small farmers rather than larger private sector enterprises
are the main beneficiaries of this new policy. However, given the
farmer’s lack of technical skills and capital, such land development may
involve partnership agreements with a private company or public
development agency. In addition to the rehabilitation of existing
irrigation schemes, there is a need to promote the use of shallow
tube-well (STW) irrigation, which can be operated either manually or by
using small low-lift pumps (LLPS). These low cost pumps involve a low
capital cost per hectare in order to ensure financial viability, and will
be made available to farmers through a credit scheme. This approach is the
quickest and cheapest means of
expanding irrigated areas. 247.
Livestock Improvement: Issues facing this sub-sector are
improvement of livestock productivity, strengthening the enforcement of
legislation, marketing of livestock and its products, disease control,
public health and nutrition/ energy requirements of draft animals and
animals for food, feed supply for the additional populations of livestock
resulting from anticipated lower mortality, availability of credit for
livestock purchases and reform of the marketing system that, at the
present, disadvantages the producers. There is a need for better
management of additional sustainable feed resource use and credit
availability to build stock. The potential to increase livestock
production is promising and should attract national and international
investment in commercial livestock farms. In addressing the constraints,
the RGC has focused on animal health service through disease control,
strengthening the cooperation with OIE, WTO, public veterinary service and
research.
248.
Fisheries
management and Administrative improvement:
The MAFF/Department of Fisheries (DoF) is currently reviewing draft
fisheries law and legislation to address the most efficient and cost
effective strategy for fisheries management, conservation and development.
The primary focus of inland fishery management is fishing lot system in
which boundaries and the system of bidding. Fishing lot boundaries have
been reviewing by releasing 56 percent of total for the local communities
in order to establish community-based fisheries management system. On the
other hand MAFF/DoF are seeking external technical assistance to improve
capacity building of the fisheries inspection programs in terms of
monitoring, control and surveillance in both inland and marine fisheries.
Marine fisheries also need to improve by preserving habitat and
maintaining the adsorptive and regenerative capacities of the marine
environment and strengthening the information system for collection,
processing, analysis and stock assessment of marine fisheries. 249. Aquaculture improvement:
the traditional aquaculture has been found and need to be improved the
capacity of national institutions to promote local aquaculture development
by transferring technology through training and extension to the farmer to
be able to adopt a new technology to increase aquaculture production.
Small-scale aquaculture is recognized and recommended as an important
sector to be improved. 250.
Revitalizing Rubber. Rubber
has long been a major commercial crop and export earner for Cambodia, and
as a labor-intensive crop has the potential to contribute to
poverty alleviation through rural employment creation. At present,
total production is still 45,000 Mt., which is 25 percent of the level
achieved in the 1960’s. There is scope for increasing the cultivated
area from the current 54,000 ha. to about 70,000 hectares, and potential
to increase annual production to about 80,000 MT that could provide export
earnings of US$54 million annually. The corporatization of the seven
existing state-owned plantations should help in transforming these
enterprises into efficient productive units.
Along with the planned corporatization, the RGC has assured small
farmers that rubber will be treated as any other crop and farmers planting
this crop will not lose their land titles. In addition, they will be free
to sell their latex in the local free market. With these assurances, the
Government expects that more farmers will be planting this crop in the
future. Because of low labor cost, Cambodia has a comparative advantage in
growing rubber. The new market for rubber wood has made this a dual
product crop, which can be grown both for its wood and latex. Expansion of
planted crop areas will provide gainful employment to a large number of
farmers and raise farm income to levels well above poverty levels. 251.
Forest Concession Management.
The RGC has achieved significant progress since the fifth CG
meeting in its efforts to ensure sustainable management of forest
resources. In order to improve the performance of forest concessionaires
conducting commercial logging activities, the RGC has introduced several
rigorous measures, including the suspension of logging activities from
January 1, 2002 until such time that a concessionaire would have a new
forest management plan approved by DFW/MAFF consistent with international
standards and would have renegotiated a model forest management investment
agreement with the RGC. Those Companies could not fulfill these
requirements will subject to total termination of contracts.
4.4.2
INDUSTRIAL SECTOR 252. The RGC’s Industrial Development Action Plan (1998-2003) has two goals: the development of export-oriented industries, and the development of import-substituting production of selected consumer goods. These goals are to be achieved by promoting: (i) labor-intensive industries, (ii) natural resource-based industries, (iii) small and medium enterprises, (iv) agro-industries, (v) technology transfer and upgrading the quality of industrial products, (vi) establishment of industrial zones, and (vii) the development of import-substituting production of selected consumer goods. 253.
The promotion of labor-intensive manufacturing will continue to
focus on the textile and garments sub-sector, where the ready supply of
mostly female labor underpins cost competitiveness. However, the
Government recognizes that retaining and increasing market share in an
increasingly competitive international environment requires the upgrading
of product quality, as well as greater productivity through improvements
in technology and management. The development of better industrial
relations within the established legal framework is also needed; and ways
of increasing the multiplier effect of garment manufacturing need to be
investigated. Currently, most of the garment sector operates on cut,
manufacture and tailor basis, with fabric and accessories (zippers,
buttons, thread) being imported, and the purchase of local inputs limited
to transportation and freight clearing services, utility-type services to
run factories, and construction to build factories. 254.
In order to diversify the manufacturing export base, the Government
will encourage toy production, whether under license or through foreign
direct investment. Such manufacturing is considered to be well suited to
the country’s relatively large endowment of low skilled labor. A second
area that will be promoted is assembly of electronic products, where all
parts and components are initially fully imported. 255.
The promotion of natural resource-based industry will focus on
identifying and exploiting opportunities in processing of natural
resources, including non-metallic mineral resources, timber, and
fisheries. The development of animal and fish breeding may permit their
supply as a raw material for reprocessing factories. However, the main
prospects in this area are in the use of non-metallic resources for
manufacture of construction materials. 256.
In regard to small-scale industry and handicraft production, the
Government intends to give priority to the promotion of traditional art
and crafts for the tourist market in both rural and urban areas. Another
area with potential for expansion is the small-scale tobacco producers who
can contribute to increasing the supply of raw materials to the large
manufacturers. However, in order to succeed it will be necessary for these
enterprises to ensure
sustained product quality. In addition, because they do not have access to
credit other than from high-cost moneylenders they will need to be
provided micro-finance credit facilities. 257. The core strategy for agro-industry development is
to grant concessional land plots to both domestic and foreign companies on
a long-term basis, and to encourage the participation of local small
landholders through contract growing for processing factories in the area.
The development of agro-industry initiatives will require close
co-ordination between the ministries of Industry, Mines and Energy,
Agriculture, Fisheries and Forestry, and local authorities, as well as
technical assistance in the full assessment of development potential.
Strengthening the economic linkage between agriculture and industry within
the context of sound environmental management is seen as essential to the
creation of incomes and employment. 258. The promotion of technology transfer and the
upgrading of products will require the Ministry of Industry to design and
implement a quality control system for export products that sets
internationally-accepted standards. In addition, the transfer of
technology will require the RGC to develop an appropriate legal and
regulatory framework covering copyright, trademarks, and so on. 259. The creation of industrial zones is aimed at
facilitating export development and creating employment by providing
high-quality infrastructure and utilities needed to encourage investment.
Zones in suburban Phnom Penh and Sihanouk ville would provide transport
and communications, power and water, waste management, education and
health facilities, and shopping complexes, along with minimal customs
formalities and duty-free importation of business inputs. The spatial
concentration of export-oriented enterprises would provide a business
incubator environment in which ideas and experiences could be exchanged;
and would also permit better control of environmental impacts of specific
business activities. Other possible regions for industrial/export
processing zones include Koh Kong, Battambang (near the Thai border), and
Banteay Meanchey (the most populous province). The Government, with
external assistance, will conduct feasibility studies during SEDPII and,
where feasibility is established, proceed to full project formulation and
implementation. 260.
The promotion
of import-substitution of selected consumer goods will be undertaken only
after a careful analysis of whether or not there is a genuine prospect of
a proposed venture becoming internationally competitive. 261.
In general, the Government will support broad-based industrial
development by: (i) encouraging expansion of the SME sector, especially
through provision of medium and long term finance, (ii) improving the
performance of State-Owned Enterprises through corporatization and
privatization, (iii) stemming the flow of illegally imported products,
(iv) reducing barriers to export such as export taxes and inefficient
provision of trade facilitation services (e.g. licensing), (v) reducing
barriers to importation of business inputs, (vi) providing infant-industry
protection in carefully selected instances, (vii) enhancing the linkage
between SMEs and between SMEs and large industries, (viii) promoting a
national productivity centre that will assist small and medium size firms
to increase productivity and reduce production costs, (ix) establishing a
National Institute of Standards that will ensure product quality matches
regional and international standards, (x) establishing a National
Laboratory with the technical capacity to undertake physical, chemical,
microbiological, and mechanical analyses of products that establish the
quality and other specifications of these products, (xi) establishing an
industrial property rights bureau that would protect new products, designs
and technologies from illegal copy, (xii) promoting vocational training
domestically and overseas, and (xiii) upgrading the legal framework in the
areas of factory law, industrial zone law, patent and industrial design
law, weights and measures, industrial safety. 262.
Private sector organizations will play a key role in identifying
industrial development opportunities and constraints, participating in the
policy formulation and monitoring processes, and promoting domestic and
foreign private investment. 263. Mineral Sector:
So far the result of geological studies and mineral investigations have
indicated that there are about 133 mineral deposits, including 26 deposits
of iron and ferro-alloy metals (iron, manganese), 15 deposits of base
metals (bauxite and cooper), 21 deposits of precious metals (gold), 51
deposits of industrial minerals (limestone, phosphate and silicasand), 14
deposit of gemstones and ornamental tones (ruby, sapphire, marble,
pagodite), 6 deposits of coal, and other deposits of construction
materials. Industrial minerals are important inputs as raw materials for
mineral-based industries, including cement and phosphate fertilizer
factories. Construction materials, such as sand, clay gravel and crushed
rocks from granite and other rock resources, are the raw materials
utilized by the building and construction industry as well as in the road
and bridges constructions. The development of the mineral sector is an
important element for achieving socio-economic development, particularly
as a source of raw materials for mineral-based industries. The development
of this sector, however, will require the participation of both local and
foreign investors. The Law on mineral Management and Exploration was
promulgated in July 2001, and it is hoped that with the Law in place both
domestic and foreign mining companies will invest in the mineral sector in
Cambodia. 4.4.3
TOURISM 264.
With Cambodia’s enormous cultural and natural heritage, tourism
policy will be geared towards cultural and eco-tourism. It will ensure the
sustainable development of cultural and natural environment as well as the
protection of the environmental without becoming an impediment to
development. The important issue is how to effectively and efficiently
manage and/or balance between protection and development and establish a
zoning plan for tourism development to ensure sound management of the
sector. 265.
There are many historical sites in Cambodia. The
Angkor temple is the world's priceless heritage and belongs to all
mankind. There is a need to develop a proper master plan for its
restoration, development and protection. The development of this area is
considerably slow. At present, there are only some road signs for
direction, some rest rooms and other facilities to serve visitors. The
work on the master plan has to be done as soon as possible by preparing a
plan for its development and making the plan available to private
investors for their participation
266. Besides the Angkor area, we have other cultural and eco-tourism destinations such as the Kulen Mountain, Kos Ker temple, Preas Vihea temple, and Ta Mok house in Anlong Veng, which can be used as a historical tourist destination. These areas can be developed as a big cultural, historical, and ecological recreation zone, which should not be limited to Angkor. In addition, Tonle Sap Lake has a great potential for developing eco-tourism, such as the water bird area and the fishing villages. In the central zone, there is the Sambo Prey Kuk temples to which a road has been built 267. The Siemreap Airport terminal needs expansion as soon as possible to meet the technical standards, including the landing area and passenger terminal, which need to be enlarged quickly. Many airlines have expressed their interests to fly directly to Siemreap, but are unable to do so because the Siem Riep airport does not fully meet internationally recognized technical requirements. There is a need to develop other infrastructure in this area such as water and electricity supply, with some priority for developing the power sector. 268.
The work on road from Siemreap to Kampong Thom
and from Poipet to Siemreap
needs to be completed as soon
as possible. Construction
of a 17-km stretch from Rolous to the Siemreap provincial town, with
funding from Japan, has been recently completed.
However, the road from Kompong Tom to Siemreap border has been
delayed. 269.
The second area of interest to tourists is Phnom Penh, which is not
only the capital of Cambodia, but also its
commercial and industrial center. Phnom Penh and the surrounding areas
also have potential tourist destinations such as the Mekong river
landscape/view, the Preah Raja Trop Mountain, the Chiso Mountain,
handicraft production areas, silversmith, silk and mat weaving, and as
well as the important historical holocaust center.
At present, work on the expansion of the Pochentong airport in
Phnom Penh is underway. The expansion will enable Boeing 747 or Airbus 340
flying from big cities in Asia pacific, America, and Europe to land.
When National Road number 1, from Vietnam to Phnom Penh, is
completed and fully operational plus the opening of boat tours from
Vietnam-Phnom Penh-Siemreap; Phnom Penh will become the country's
commercial and tourism center on par with the Siemreap Angkor zone. 270.
The third zone is the Coastal zone, which
received a cruise ship to test the water to develop this kind of tourism.
A port development project, financed by a loan of US$40 million from the
Government of Japan is currently underway. However, in addition to
rehabilitating and developing the port, the Government would like to
develop a tourism port where big cruise ships can land including a
passenger terminal for passengers and a border checkpoint. 271.
The Government’s policy thrust on Culture
and Fine Arts is to enrich the national culture in a way that supports
the expansion of services and the creation of employment opportunities for
the people and thus contributing to the national goal of poverty
alleviation. Developing the
cultural resources of Cambodia, especially the Angkor temples sites that
have been attracting increasing number of tourists, is a priority of the
RGC not only as a socio-cultural development goal but also because of the
economic/revenue generating potential of these historical sites.
The conservation and development of the national cultural resources
will require that other areas where ancient temples are located should
also be repaired in order to transform them into cultural tourist zones.
The Ministry of Culture and Fine Arts is focusing on the rehabilitation of
cultural infrastructure such as: the
renovation of the Royal University of Fine Arts to develop the needed
human resources; repair and conservation of various ancient temples; and,
repair, renovation and modernization of the National Museum and of the
National Library. 4.4.4
TRADE 272.
Work on Cambodia’s accession to the WTO is well advanced.
However, complying with WTO requirements is very demanding for a small
developing country like Cambodia and we could benefit from badly needed technical
assistance in several areas: legislative framework, valuation
procedures, trade policy evaluation and reporting, assessing the impact of
trade protection. 273.
Notwithstanding the opening of trade many significant tariff and
non-tariff barriers remain. The non tariff barriers to trade involve
various bureaucratic costs (often unofficial) and the need to comply with
international labor standards as a condition of international market
access. Although, customs
administration has significantly improved in recent years establishing a
low cost formal trade facilitation system faces many difficulties. To
begin with, the administrative task is daunting given the porous borders
with three neighbors and a long coastline with many rivers and bays.
Second, various trade arrangements (rules of origin requirements,
preferential trading arrangements in ASEAN) complicate this task. Third,
the institutional framework for border control is opaque, with unclear
mandates among different agencies. Fourth, limited resources constrain the
capacity of the customs department to carry out its functions. Civil
service salaries are low, physical support facilities are inadequate, and
management information systems are poor. These difficulties are reflected
in high unofficial payments, widespread smuggling, unreliable clearance
and processing times, and tariff collection that is significantly lower
than is implied by the official tariff. 274.
Apart from the difficulties associated with ‘external’ trade
facilitation, ‘behind the border’ constraints (for example, transport,
market intelligence) are also significant deterrents to exporting.
Shipping charges in Cambodia are the highest in the region and four times
the cost for shipments of comparable size in Thailand. Carefully monitored
user charges or toll operations to fund road maintenance and construction
would be the way to address this problem. So would fuel taxes. TA is
needed to examine the implications of such options for fund raising
and road fund sharing at local levels. 275.
Rice is an important source of food for most rural households. An
evolution is occurring from rice as a source of food security to rice as a
source of trade and income. Rice trade both within the country and across
the border is currently constrained by poor transport infrastructure. In
addition, export procedures and ‘Facilitation fees’ pose a significant
tax on rice exports. Simulation of impacts on poverty indicate that
improving two major elements in rice production technology (paddy to rice
yield and post harvest losses) would reduce transaction costs and improve
the livelihood of poor Cambodians. A detailed exposure of these unofficial
charges is needed to reduce constraints on current and potential exporters
of rice. 276.
Diversification of agriculture away from rice is increasingly
common. The key obstacles to developing non-rice agriculture are similar
to those for rice. They include poor transport infrastructure, high energy
costs, weak information systems, inherited distrust among buyers and
sellers, inadequate access to credit and limited business development
skills. Cambodia could potentially benefit from the increasing demand for
niche agricultural products, such as spices, herbs, specialty tropical
fruits, sesame seeds and essential oils. To do so, action is needed on
several fronts. First, the institutional capacity of the Ministry of
Commerce needs to be strengthened. Second, technical assistance is
needed to help small farmers and processors with their informational
needs. This could include the facilitation of establishing associations
interested in marketing, technology and purchasing inputs. 277.
Handicraft production has been hampered by years of civil strife
and war that broke the chain of traditional transfer of skill and design.
Craftspeople lack critical information on market demand, quality standards
and trends. As with diversified agriculture, technical assistance is
needed to identify barriers to and sources of market information and to
support building associations of people with similar interests in
marketing, technology and the sourcing of inputs. 278.
Fisheries sector development is hindered by intervention of
government agencies in almost every aspect of market transactions.
Building a competitive and market responsive fisheries sector will require
a change in the corporate culture in the sector to nurture market-based
transactions. Regulation of management regimes to control over fishing is
required. Technical assistance is needed in two main areas:
fisheries marketing and distribution and fisheries management. In
management, TA is needed to examine the incentives for short-term
exploitation, unregulated common property fisheries and establishing
transparency in the allocation of fisheries access. In addition, TA can
help with developing a regulatory system for exports to the US and the
EU and enabling the private and public sectors to collectively develop a
long-term strategic vision for the fisheries sector. 279.
Garment sector export growth has been spectacular over the past
several years. Some 160 000 people are reported to work in the
sector. This growth reflects a combination of limited access to the
currently highly restricted US and EU markets (set to expire in 2005), a
hospitable policy environment and competitive production costs. In the
case of the US, preferential access means that Cambodia has some access to
a tightly restricted market. While Cambodia has US market access for a
large number of duty items and quota under GSP, for the items it does
export - garments, MFN rates apply and for those garments where Cambodia
has shown itself to be especially competitive quotas now apply. For the EU,
preferential arrangements are such that Cambodia can export without duty
and quantitative limits so long as rules of origin requirements are met.
These requirements are in most cases not met given the limited development
of Cambodia’s textile sector. However substantial production from
Cambodia is sufficiently competitive to be able to sell on the UK market
without the concession. 280.
Tourism is growing at over 30 per cent annually. The challenge for
this industry is to find the appropriate roles and tasks for government
industry, private operators with respect to such things as industry
statistics, promotion, training, certification and charging for
‘unique’ attractions such as the temples of Angkor Wat. Core
technical assistance needs are: TA to collect tourism related data and to
analyze it; a careful evaluation of the net benefits of tourism to
Cambodia and its long-term potential; developing a tourism development
strategy, involving all major stakeholders, building on successful
private-public partnerships such as the Tourism Working Group; in
conjunction with the tourism development strategy, identifying those
investments necessary to encourage greater regional and domestic tourism
as well as eco-tourism – all of which would help the poor; and
establishing the appropriate role of the government in regulating,
‘charge’-setting, setting standards and collecting industry
statistics. 281.
Labor export has been an important option for reducing poverty in
several of Cambodia’s Asian neighbors, such as the Philippines, Sri
Lanka, Thailand and Vietnam. The Royal Government policy is to encourage
official labor exports to increase welfare, enhance skills, reduce
unemployment and increase state revenues. Constraints to increased exports
of workers include, low education and limited foreign language skills, an
increasingly competitive market for export labor, and complex regulatory
and administrative requirements. Developing appropriate government
policies and regulations and bilateral arrangements, which do not
prohibitively raise costs yet adequately protects the interests of export
workers poses a challenge. Technical assistance is needed in these
areas and should draw on the considerable regional experience in
developing labor markets and regulations. 282.
Information Technology has much to offer in enabling all these
sectors to move to more productive systems. Already some of Cambodia’s
many young people are embracing IT based activities. In some cases IT
systems are being used to convey market information and expedite
transactions of handicrafts produced in villages far from urban centres.
In other cases Cambodians are processing data from other countries and
thereby effectively exporting data processing services. 283. To draw maximum benefits from the ever changing global market, Cambodia needs to tackle inter-related actions at three levels: significant improvements in market access, linked to a coherent program of technical assistance and capacity building, and based on continuing domestic policy reforms and adjustments. |
|
Home | 6th CG Meeting| Agenda | Contents| List of Participants | Position Paper | DCR | Partnership | Government | Donors | Download | Map | Photo |