Cambodia, Vietnam Seek To Stem Fall-Off in Trade Falling Trade

With trade between Cambodia and Vietnam slipping by over a quarter for the first six months of this year, government officials from the two countries announced yesterday that two local border crossings would be upgraded to international checkpoints this week, a process that will see the frontier corridors equipped with better road access and more customs and immigration staff to process an increased flow of goods and people.

Speaking at a news conference in Phnom Penh, Lam Minh Chieu, People’s Committee chairman for Vietnam’s An Giang province, said the two new international border crossings will be located inside a so-called border economic zone that is situated along the Vietnamese frontier with Takeo and Kandal provinces.

The checkpoints—one of which is based in Takeo province’s Kiri Vong district and the other in Kandal province’s Koh Thom district—will be officially opened on Saturday and will coincide with a two-day duty-free trade exhibition at both border crossings, where Cambodian and Vietnamese businesses will gather to show off their wares.

Mr Minh Chieu said the new border crossing would provide business opportunities for Cam­bodian and Vietnamese companies, as there will be tax breaks on the export and import of agricultural products and construction-based materials that cross the border at the new gates.

“I believe that exporting goods to Cambodia is becoming easier when compared to other countries,” Mr Minh Chieu said at the news conference. “Cambodians are now interested in Vietnamese products…. Many Vietnamese products will be shipped to Cambodia.”

According to figures from the Cambodian Ministry of Com­merce, bilateral trade between Vietnam and Cambodia stood at $427 million in 2007. In 2008 that figure had jumped to a whopping $1.62 billion. Le Bien Cuong, an economic adviser for the Viet­nam­ese Embassy in Phnom Penh, said that trade between the two countries is estimated to increase to $2 billion in 2010.

However, Mr Bien Cuong said, Vietnamese exports to Cambodia for the first 6 months of this year stood at $543 million, which was a drop of 28 percent compared to the same period last year. Cambodian exports to Vietnam for the first six months of this year hit a paltry $94 million, which is a 29 percent drop compared to the same period in 2008. The fall off in trade, he said, was due to the side effects spawning from the global economic crisis.

Mao Thora, secretary of state at the Ministry of Commerce, said by telephone that the upgraded border crossings would heighten commercial exchanges between the two counties.

“From 2000 until now, I noticed that [Vietnam] has lots of big companies and they are starting to invest in Cambodia,” he said by telephone.

“Prior to the year 2000, the two economies were in the process of developing. There wasn’t a sufficient amount of capital or companies with an international profile,” he said.

Improvements in Cambodia’s infrastructure, mainly roads, and the easing of some cross border transport procedures, have been some of they key reasons that have encouraged more Vietnamese in­vestors and visitors in Cambodia, said Chantha Kim, spokesperson for the Asian Development Bank in Phnom Penh.

“Vietnamese investment will help boost the tourism and agro-in­dustry in Cambodia,” he said in an e-mail. “By easing border crossing procedures…Cambodia [has] become more accessible and af­fordable for the Vietnam’s growing middle class to visit.”

There are now more Vietnam­ese people visiting Cambodia as tourists than any other foreign nationality, having this year usurped South Koreans from the top number of visitors slot.

(Additional reporting by Simon Marks)


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