Transcript Trade and Poverty Reduction

Trade and Poverty
Experiences from Cambodia
CUTS Conference on
“Trade, Development and Poverty Linkages:
Lessons and Future Directions”
June 23, 2009, Jaipur, India
Content
1. Overview on Cambodia Economy
2. Overview on Cambodia Trade
3. Linkage between Trade and Poverty
–
Experiences from Cambodia garment trade
–
Experiences from Cambodia tourism trade
–
Experiences from Cambodia agricultural trade
4. Challenges ahead
1.1. Overview on Cambodian Economy
• Double digit growth during last 4 years (2004-2007)
– Fast growing sectors: Garment export, Tourism trade services,
Construction
– Other sectors grew at a moderate rate
• 2008 GDP growth = 5.2 percent
• 2008 GDP = US$10.3 billion
• 2008 GDP per capita = US$703
1.2. Cambodian Economic Growth
2004
2005
2006
2007
2008e
Agriculture
-1.0%
15.5%
5.5%
5.1%
4.8%
Paddy
-12.2%
43.7%
4.3%
7.5%
3.6%
17.0%
12.9%
18.4%
8.4%
3.1%
Garments
24.9%
9.2%
20.4%
10.0%
2.0%
Construction
13.2%
22.1%
20.0%
6.7%
3.0%
13.2%
13.1%
10.1%
10.2%
6.7%
23.4%
22.3%
13.7%
10.3%
5.7%
10.3%
13.3%
10.8%
10.2%
5.2%
15.8%
12.3%
13.0%
12.2%
5.4%
Industry
Services
Tourism
Total GDP
Non Agriculture GDP
Source: NIS and EIC
1.3. Cambodia’s Economic Growth 2008
(Selected Sectors)
20%
15%
10%
5%
0%
Crops
Textile
Tourism
Real Estate
GDP
-5%
-10%
-15%
-20%
QM2008
QJ2008
QS2008
QD2008
Source: EIC data compiled from NIS
1.4. Economic Growth for 2009
2.0%
Total GDP
2009
5.2%
2008
Hotel & Restaurants
Construction
Textile & Garment
Agriculture
-15%
-10%
-5%
0%
5%
10%
Source: Data compiled from NIS and EIC
2.1. Trade and Economy
80%
60%
40%
20%
0%
1990
1993
1996
Exports of Goods (% GDP)
1999
2002
2005
2008
Imports of Goods (% GDP)
Source: NIS and EIC
2.2. Export Share by Sector
Others
Animal and
vegetable 13%
Textiles 73%
Source: NBC
Total exports reached US$4.7 billion in 2008.
2.3. Export Share by Country
Others
UK 5%
Germany 8%
US 63%
Source: MOC
2.4. Import Share by Sector
Garment 25%
Others
Petroleum
25%
Construction
Material
Vehicles and
Motor
Source: NBC
Total imports reached US$6.5 billion in 2008.
2.5. Import Share by Country
Others
Hong Kong
18%
China 18%
Vietnam 9%
Taiwan 13%
Thailand
14%
Source: MOC
2.6. FDI Share by Sector
Others
Garment 21%
Tourism 12%
Telecom 10%
Beverage 4%
Wood
Product 8%
Agriculture
9%
Source: NBC
FDI reached US$3.8 billion
in the first quarter of 2008.
2.7. FDI Share by Country
China 16%
Others
Malaysia 14%
Vietnam 5%
Thailand 10%
Source: NBC
Singapore 7%
Korea 7%
Taiwan 9%
US$806 million FDI flew into Cambodia in 2008.
3.1. Trade and Poverty
Trade
Trade volume increase by 10-20 percent per year
Incomes and Employments
Poverty Rate
Poverty rate reduced by 1 percent a year
It was about 35 Percent in 2004
3.2. Garment trade
• Export-Oriented Industry
• High labor standard compliance required before exporting
(Key linkage between trade and poverty)
• Generates direct incomes and employments to more than
320 000 workers
• About 1 million people indirectly are deriving their income
from garment industry:
– Business around the factory such as food, housing, transportation, etc
– Remittance: Families who have daughters/sons working in the
garment sector are seen as better than those who are not.
• Garment trade helped to push poverty reduction pace
3.3. Tourism trade
• Siemreap province is the most popular tourist site in
Cambodia.
• Siemreap is still among the poorest province in the
country
– Income and employment for tourist activities concentrate mostly in the
Siemreap town
• Tourism trade has limited contribution to poverty
reduction pace. Missing linkages are:
– Lack of infrastructure that connects towns to rural areas
– Lack of human resources
3.4. Agricultural trade
• Agriculture is the most important sector to Cambodia as 60-70
percent of Cambodians are farmers
• Agricultural export represents about 20 percent of total good
exports, but mostly done through informal channels
• However, the poorest people are mostly found among
farmers.
– Lack of market news and marketing skills among farmers, thus price is
manipulated by external traders
– Farmers lack knowledge on procedure/standards of export products
– Lack of adequate infrastructure and irrigation system.
4. Challenges ahead
• During current global crisis:
– Current decline in Garment exports in 2009
– Lower tourists in Cambodia in 2009
– Current decline in FDI in 2009
• How to promote agricultural trade?
Thank You