Cambodia is losing about $200 million in benefits that the flow of visitors should produce each year, a senior tourism official said Wednesday.
“We take in a lot of revenue but we leak out a lot also,” said Thong Khon, secretary of state for the Ministry of Tourism. “If we talk about poverty reduction in Cambodia, we have to talk about leakage of revenues.”
Tourism, which is Cambodia’s second leading economic sector after the garment industry, has brought the country between $700 million and $800 million in annual revenues in recent years.
This should directly and indirectly benefit an array of people supplying hotels and restaurants and subcontracting services—from produce and poultry farmers to uniform tailors, furniture makers and computer maintenance technicians. But those benefits are lost when goods and services are brought in from outside the country, officials said.
“You see that every tourist comes here to drink Coca-Cola—not local coconut juice,” Thong Khon said. “We have to produce more domestic goods instead of importing foreign goods.”
International companies doing business in Cambodia also compound the leakage effect by transferring their revenue to corporate headquarters abroad, officials said.
“We learned that revenues for the tourism industry has a leakage rate of 35 percent, which means more than $200 million out of the total revenues,” Thong Khon said.
Chris Ho, president of the Cambodia Hotel Association, said hotels would like to support locally manufactured products, but they can’t find suppliers.
Five tons of vegetables are needed each day in high season to supply the 68 hotels in Siem Reap, he said.
“We should set up a vegetable bank where one village produces one product in Siem Reap,” he said. “If we start up a large-scale program now, in the next few years, Cambodia will be able to replace imported goods with its own vegetables, fruits and other goods.”
The income generated would go directly to local people instead of getting funneled out of the country, as is the case today, Ho said.