Cambodia’s newly appointed minister of commerce said Thursday that he plans to reform the country’s economy ahead of Cambodia’s entrance into the Asean Economic Community (AEC) 2015, though he and other officials did not say how they plan to accomplish that goal.
Speaking to reporters on the first day of a two-day seminar about strengthening Cambodia’s competitiveness for regional economic integration, Minister of Commerce Sun Chanthol said Cambodia is “committed” to its role in AEC.
“Cambodia is very committed to fulfill its role and responsibility to create the AEC by 2015. We will prepare, through various reforms, to ensure that we will be a solid partner,” he said.
The AEC will create a single market among the 10 Asean nations by 2015 that is competitive enough for the global economy. While economically advanced regional nations such as Indonesia and Singapore will have no problems integrating, they may be dragged down by the burden of the lackluster economic appeal of countries such as Cambodia.
But Mr. Chanthol insisted that would change.
“We will improve infrastructure. We will improve the institution. We will improve people’s connectivity. We will improve on education. We’re going to have more vocational training for people and we will also continue to attract more foreign direct investment to our country. We will make it more competitive for investors to come and do business through quick reform,” he said.
Mr. Chanthol’s comments come on the heels of the World Bank’s Doing Business 2014 report released this week, in which Cambodia has dropped to 137 out of 189 countries, meaning it is becoming more difficult to conduct business in the country.
“That may be just one blip…but I am taking it hard…. We’re going to analyze what makes us worse off, and we won’t ignore that ranking,” the minister said.
Mr. Chanthol, however, did not detail how the government plans to move Cambodia’s economy toward a smooth regional integration, leaving the task to the more than a dozen speakers at Thursday’s seminar.
One speaker, Ros Seilava, undersecretary of state at the Ministry of Economy and Finance, said that Cambodia’s economic development could be improved by maintaining economic growth of 7 percent per year—as predicted by the World Bank—increasing exports of rice and rubber and training the country’s youth in skilled work.
“Normally, our skill is at a low level, but we will have to hire highly-skill people when we begin to develop industry,” he said. “Our people can perform low-skill jobs, but if a position calls for a manager or someone with technology skills or other sophisticated knowledge, they would have to hire from other countries.”
Last month, both the World Bank and the Asian Development Bank (ADB) predicted growth in Cambodia’s economy, primarily because of the country’s robust exports and strong agriculture, construction and tourism sectors.
The ADB, however, predicted a stronger growth rate of 7.2 percent this year and 7.5 percent in 2014.
Jayant Menon, a lead economist at the ADB, said Thursday that there are at least six key areas of reform for Cambodia before integration.
“In order to make growth more inclusive, Cambodia needs to invest more in education and health, and to institute land reform. Apart from directly reducing social and asset inequities, this will produce a workforce more able to actively participate in the growth process and adapt to structural change,” he said in an email.
Other areas of focus, Mr. Menon said, include investments, trade and transportation.