Cambodia will recover from the world financial crisis at a slower pace than other countries in the Mekong sub-region according to predictions included in a World Bank report on economic growth in the developing world.
Released yesterday, the report on economic policy in the developing world surveyed the post-economic crisis recoveries of economies in the developing world and said Southeast Asia was posed to make a strong comeback due to growth in manufacturing.
“In Cambodia, value-added industry almost tripled over the past two decades, albeit from a low base, and so did the number of workers,” the report said.
But the report predicted the Cambodian economy would likely grow by just four percent in 2010, a slower recovery than any other country in the region except Thailand. However growth was forecast to continue at six percent in 2011, as developing countries in East Asia, not including China, average just 5.2 percent growth.
According to the report’s authors, this growth will depend largely on Cambodia’s ability to integrate its industries into regional production networks.
Chan Sophal, president of the Cambodia Economic Association, said yesterday that regional integration in service of production efficiency was an important goal but one that eluded some industries.
“Cambodia still does not have adequate processing capacity for many of the country’s crops. So transporting them across the border to places where they can be processed should be made easier,” Mr Sophal said.
Mr Sophal said another concern raised in the World Bank report–that a lack of human capital could stymie Cambodia’s economic growth unless job training became a national priority–was also legitimate.
“The government knows that capacity is an issue,” said Mr Sophal. “Whether or not they are making enough of an effort, I don’t think we know yet.”