Government Pushes ‘Aid-for-Trade’ With Donors

The government called on donors to offer up to $30 million as part of its “Aid-for-Trade” strategy to bolster Cambodia’s competitiveness in international markets, and in turn enhance economic development, officials said on Thursday.

Commerce Ministry officials met with donors on Thursday morning to seek financing for the government’s medium-term “Aid-for-Trade” strategy, which it intends to implement by the end of 2020.

Pan Sorasak, a secretary of state at the ministry who is set to become its minister this month, said the strategy, which it intends to implement by 2020, aimed to increase exports by supporting integration into global and regional trade systems.

“Exports have increased, trade costs have reduced and there is industrial development,” Mr. Sorasak said of recent progress. “The Ministry of Commerce is requesting more funds for technical assistance…as trade is an engine for growth and development.”

The proposed programs, which are estimated to require $24 million to $30 million in funding, include making trade standards and regulations more compliant with international trade systems, improving marketing for Cambodian products and diversifying exports to higher-value added industries, such as light manufacturing and agro-processing.

Cambodia’s exports of goods are projected to grow at around 10 percent for the next two years, according to an Asian Development Bank report released in October. However, the country’s exports base remains narrow—with garments accounting for almost 70 percent of Cambodia’s exports last year, according to Commerce Ministry data from February.

George Edgar, E.U. ambassador to Cambodia, said the initiatives would help support sustainable economic growth in the country but added that ensuring the effectiveness of aid was of paramount importance.

“Integration into the Asean Economic Community and Cambodia’s ambition to become a middle income country poses a new challenge to Cambodia’s export competitiveness,” Mr. Edgar said.

“Dealing with issues of regional connectivity and trade facilitation is demanding on resources which may require new forms of aid,” he added.

“An increased role of domestic public investment and loans will be inevitable…and increased transparency and monitoring will be critical.”

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