The document summarizes Cambodia's economic outlook for 2013. It finds that while Cambodia has experienced strong economic growth in recent years, reaching an estimated 7.7% GDP growth in 2012, this growth has not been inclusive and has lagged in improving social indicators like education and healthcare. To sustain growth and avoid the "middle income trap", the document recommends that Cambodia focus on increasing skills training to diversify the economy, strengthening the financial sector to support SMEs, and leveraging opportunities from regional economic integration under ASEAN.
1. The consequences of high government expenditure and rising debt on Malaysian Economy.
1.1 Executive Summary
2. Discussion of topic chosen with the aid of diagram
2.1 Consequences of rising government expenditure towards Malaysia’s Economy
2.1.1 Low GDP growth rate
2.1.2 Explanation of government debt
2.1.3 Outlook government debt towards Malaysia’s economic growth
3. Identify and highlight economic concepts exhibited in the article.
3.1.1 Government Budgeting and Fiscal Policy
3.2 Aggregate Demand
3.3 Review on Aggregate Supply
3.4 Conclusion
4.0 Conclusion
1. The consequences of high government expenditure and rising debt on Malaysian Economy.
1.1 Executive Summary
2. Discussion of topic chosen with the aid of diagram
2.1 Consequences of rising government expenditure towards Malaysia’s Economy
2.1.1 Low GDP growth rate
2.1.2 Explanation of government debt
2.1.3 Outlook government debt towards Malaysia’s economic growth
3. Identify and highlight economic concepts exhibited in the article.
3.1.1 Government Budgeting and Fiscal Policy
3.2 Aggregate Demand
3.3 Review on Aggregate Supply
3.4 Conclusion
4.0 Conclusion
THE IMPACT OF TRADE LIBERALIZATION ON ECONOMIC GROWTH; THE CASE OF SUB-SAHARA...AkashSharma618775
The main aim of this research is to explore the effect of trade liberalization on economic growth in subSaharan Africa by analyzing certain macro-economic indicators using Ordinary Least Squares approach to
estimate regression equations. Many developing countries have substantially liberalized their trade regime over the
past three decades, either unilaterally or as part of multilateral initiatives. Nevertheless, trade barriers remain
high in many developing countries. One of the concerns that attributes to the reluctance of many of these countries
to liberalize their trade regime is the possible worsening of the trade balance.
This research paper is meant to give a recommendation on which macro-economic indicators sub-Saharan African
countries should pay particular attention to, implementing the necessary policies to ensure its effectiveness thereby
ensuring a step-up in those aspects of the economy in order to promote development. It considers 46 different
countries with different economic policies in sub-Saharan Africa for a 14-year period. Most papers considering
sub-Saharan African region consider a selected few countries based on certain economic reasons of their choice,
and those who consider most countries in the region have different macroeconomic indicators they employ for their
modeling. This paper considers if not all, almost all sub-Saharan African countries regardless of their economic
status.
Dr. Alejandro Diaz-Bautista, Korea Mexico Economy Presentation, University of...Economist
“Competitiveness and Economic Growth. An Analysis of Mexico and Korea.” Crecimiento Económico y Competitividad. Un Análisis de México y Corea.
Dr. Alejandro Díaz-Bautista
Professor of Economics and Researcher at
El Colegio de la Frontera Norte (COLEF)
Profesor Investigador del Colef. Miembro del SNI Conacyt.
adiazbau@hotmail.com
Prepared for the Conference at the Faculty of Economics, University of Colima, April 29-30, 2010. Colima, Colima, Mexico.
Preparado para la Conferencia en la Facultad de Economía de la Universidad de Colima, para los estudios en Cuenca del Pacífico en la Universidad de Colima, los días 29 y 30 de abril de 2010.
Launch of 2014 State of Baltic Sea Region Reportcketels
How is the Baltic Sea Region doing in terms of competitiveness and regional collaboration? Key points from the 2014 State of the Region-Report (http://www.bsr2014.eu/wp-content/uploads/BDF_SORR_2014_web.pdf). Presented at the BDF Summit in Turku, June 2014
Macroeconomics and international trade analysis of turkeyIshaan Singhal
Over the past couple of decades, Turkey has been an emerging economy with many struggles and successes. In this country analysis, we will detail how their economy fared over those decades and where we see the economy in the future. We hope to highlight their steady growth periods and their economic and financial crises during this time. We will take a look at some economic indicators and give a background of monetary and fiscal policies they have used.
THE IMPACT OF TRADE LIBERALIZATION ON ECONOMIC GROWTH; THE CASE OF SUB-SAHARA...AkashSharma618775
The main aim of this research is to explore the effect of trade liberalization on economic growth in subSaharan Africa by analyzing certain macro-economic indicators using Ordinary Least Squares approach to
estimate regression equations. Many developing countries have substantially liberalized their trade regime over the
past three decades, either unilaterally or as part of multilateral initiatives. Nevertheless, trade barriers remain
high in many developing countries. One of the concerns that attributes to the reluctance of many of these countries
to liberalize their trade regime is the possible worsening of the trade balance.
This research paper is meant to give a recommendation on which macro-economic indicators sub-Saharan African
countries should pay particular attention to, implementing the necessary policies to ensure its effectiveness thereby
ensuring a step-up in those aspects of the economy in order to promote development. It considers 46 different
countries with different economic policies in sub-Saharan Africa for a 14-year period. Most papers considering
sub-Saharan African region consider a selected few countries based on certain economic reasons of their choice,
and those who consider most countries in the region have different macroeconomic indicators they employ for their
modeling. This paper considers if not all, almost all sub-Saharan African countries regardless of their economic
status.
Dr. Alejandro Diaz-Bautista, Korea Mexico Economy Presentation, University of...Economist
“Competitiveness and Economic Growth. An Analysis of Mexico and Korea.” Crecimiento Económico y Competitividad. Un Análisis de México y Corea.
Dr. Alejandro Díaz-Bautista
Professor of Economics and Researcher at
El Colegio de la Frontera Norte (COLEF)
Profesor Investigador del Colef. Miembro del SNI Conacyt.
adiazbau@hotmail.com
Prepared for the Conference at the Faculty of Economics, University of Colima, April 29-30, 2010. Colima, Colima, Mexico.
Preparado para la Conferencia en la Facultad de Economía de la Universidad de Colima, para los estudios en Cuenca del Pacífico en la Universidad de Colima, los días 29 y 30 de abril de 2010.
Launch of 2014 State of Baltic Sea Region Reportcketels
How is the Baltic Sea Region doing in terms of competitiveness and regional collaboration? Key points from the 2014 State of the Region-Report (http://www.bsr2014.eu/wp-content/uploads/BDF_SORR_2014_web.pdf). Presented at the BDF Summit in Turku, June 2014
Macroeconomics and international trade analysis of turkeyIshaan Singhal
Over the past couple of decades, Turkey has been an emerging economy with many struggles and successes. In this country analysis, we will detail how their economy fared over those decades and where we see the economy in the future. We hope to highlight their steady growth periods and their economic and financial crises during this time. We will take a look at some economic indicators and give a background of monetary and fiscal policies they have used.
La infografía muestra cómo el blended learning no trata de sustituir los maestros con las nuevas tecnologías, sino que faculta con nuevas capacidades, es decir: empodera y crea nuevas oportunidades. Vía Digital learning now.
Picking up from the previous budget, Budget 2013/14 will play a big role in laying a firm foundation to usher in the devolved system of government. The environment for budget formulation and prudent financial management at the national and county government level is now set, given the passing of requisite legislation, including the Public Finance Management Act, 2012 and the launch of the second strategy for Public Finance Management Reforms in early 2013. Given this state of play one can interrogate the budget process using the PFM, Act 2012 as a benchmark. The three arms of government managed to submit their expenditure estimates to the National Assembly by 30th April. Equally commendable is the fact that for the very first time, the National Government adopted Programme based budgeting (PBB) to present its expenditure estimates in line with PFM reforms.
Five years after the onset of the global financial crisis the world economy remains in a state of disarray. Strong expansionary monetary policies in the major developed economies have not succeeded in fostering credit creation and strengthening aggregate demand. Fiscal austerity and wage compression in many developed countries are further darkening the outlook, not only for the short term, but also for the medium term. The burden of adjustment of the global imbalances that contributed to the outbreak of the financial crisis remains with the deficit countries, thus strengthening deflationary forces in the world economy. The dominance of finance over real economic activities persists, and may even have increased further. Yet financial reforms at the national level have been timid at best, advancing very slowly, if at all. In 2008 and 2009, policymakers of several economically powerful countries had called for urgent reforms of the international monetary and financial system. However, since then, the momentum in pushing for reform has all but disappeared from the international agenda. Consequently, the outlook for the world economy and for the global environment for development continues to be highly uncertain. Some developing and transition economies have been able to mitigate the impact of the financial and economic crises in the developed countries by means of expansionary macroeconomic policies. But with the effects of such a response petering out and the external economic environment showing few signs of improvement, these economies are struggling to regain their growth momentum. Prior to the Great Recession, exports from developing and transition economies grew rapidly owing to buoyant consumer demand in the developed countries, mainly the United States.
OVERVIEW Five years after the onset of the global financial crisis the world economy remains in a state of disarray. Strong expansionary monetary policies in the major developed economies have not succeeded in fostering credit creation and strengthening aggregate demand. Fiscal austerity and wage compression in many developed countries are further darkening the outlook, not only for the short term, but also for the medium term. The burden of adjustment of the global imbalances that contributed to the outbreak of the financial crisis remains with the deficit countries, thus strengthening deflationary forces in the world economy. The dominance of finance over real economic activities persists, and may even have increased further. Yet financial reforms at the national level have been timid at best, advancing very slowly, if at all. In 2008 and 2009, policymakers of several economically powerful countries had called for urgent reforms of the international monetary and financial system. However, since then, the momentum in pushing for reform has all but disappeared from the international agenda. Consequently, the outlook for the world economy and for the global environment for development continues to be highly uncertain. Some developing and transition economies have been able to mitigate the impact of the financial and economic crises in the developed countries by means of expansionary macroeconomic policies. But with the effects of such a response petering out and the external economic environment showing few signs of improvement, these economies are struggling to regain their growth momentum. Prior to the Great Recession, exports from developing and transition economies grew rapidly owing to buoyant consumer demand in the developed countries, mainly the United States.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
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MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
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Cambodia's outlook brief for 2013 possibilities and policy priorities for sustainable and inclusive growth
1. Cambodia Outlook Brief*Cambodia Outlook Brief*
CDRI – Cambodia’s leading independent
development policy research institute
2013, No
01
Cambodia’s Economic Outlook for 2013: Possibilities and
Policy Priorities for Sustainable and Inclusive Growth1
“
We are now at a critical point in Cambodia’s socio-economic development as we build on our past
successes and move steadily towards graduation from least developed country status to lower middle
income country by 2015-16.”
Samdech Akka Moha Sena Padei Techo HUN SEN
Prime Minister, Kingdom of Cambodia
* A PRODUCT OF THE 2013 Cambodia Outlook Conference:
A Partnership of CDRI and ANZ Royal.
The Global Economy in 2013: Implications for
Cambodia
The global economy appears to have regained some
momentum and a degree of stability. The risk of extreme
financial events occurring in advanced economies is
declining, manufacturing is showing signs of recovery,
and the threat of European sovereign default has
subsided. Despite these encouraging signs, a robust
recovery is still a long way off and the general outlook
is gloomy: low growth seems set to remain a stubborn
trait of advanced economies.
Across Asia, economies are enjoying high and
stabilising growth rates. The notable exception is Japan,
where drastic structural reforms are needed to jump-
start its economy from perpetual stall. External demand
is regaining some stability on an aggregate level, while
increasing capital inflows from bonds and financial
market transactions reflect renewed confidence in
growthpotential.Butthereisnoroomforcomplacency:
policy makers must be vigilant against asset bubbles,
inflation risks and spillovers from the on-going
downturn in Europe.
Emerging markets in Asia, led by China, have
become the key driver of global growth, offering new
opportunities to policy makers in the region. Most
notable are those afforded by the ascendency of China
as an economic and geopolitical superpower.
China’s regional presence has increased dramatically
in recent years: it is now at the heart of production
networks,effectivelylinkingthedifferentcomponentsof
regionalmanufacturingprocesses,facilitatingthesupply
of goods to global markets, and providing a core source
of FDI. So integrated are Asian economies, the Greater
Mekong Sub-Region (GMS) countries in particular,
that even slight changes in China’s GDP growth have
major implications for national economies.
If China’s economy continues to grow and its
society becomes more affluent, large markets will
emerge for a variety of GMS products. Already,
there has been strong growth in domestic demand
for durable goods and agricultural products as the
Chinese population’s consumption patterns change.
Sustained and diversified industrial development
means Chinese industry will require vast quantities of
raw materials, minerals and energy. The GMS is well
placed – geographically, economically and politically –
to satiate this demand.
As Chinese labour costs rise, industry will migrate
to sites of lower-cost production. With low labour costs
and a high level of assimilation into regional production
networks, the GMS is well poised to take the mantle of
global manufacturing hub.
For Cambodian policy makers, the challenge will be
to restructure the economy to realise the opportunities
1
This is a summary of the 2013 Cambodia Outlook
Conference presentations by H.E. Dr Hang Chuon
Naron, Secretary of State, Ministry of Economy
and Finance, Permanent Vice Chairman, Supreme
National Economic Council,; Mr Faisal Ahmad, IMF
Representative,IMF,Cambodia;DrSrinivasaMadhur,
Director of Research, CDRI; and Mr Mike Smith, Chief
Executive Officer, Australia and New Zealand Banking
Group Limited (ANZ).
2. offered by a growing China. Used effectively, policy tools
can take advantage of changing patterns of intra-regional
capital flows to increase employment, raise labour
productivity, transfer technology, move production up
the value chain, and, ultimately, enable sustained high
GDP growth.
Strong and Diversifying: Cambodia’s Economic
Growth
Cambodia’s growth, recently revised to 7.7 percent,
remained strong in 2012. Gains were made across the
board, with all three core sectors posting strong results:
agriculture4.3percent,industry9.2percentandservices
(which includes tourism and construction) 8.1 percent.
There are nascent signs of diversification within these
sectors to producing higher value-added products and
into new sectors such as mining and oil.
This trend of high and diversifying growth is
attributable to a number of factors. Key among them
are deepening regional integration, promulgation of
effective national and sectoral policy frameworks, and
favourable changes in external trade conditions.
Agriculture has benefitted from the EU’s tariff-
eliminating “Everything but Arms” trade initiative, and
thegovernment’sdrivetocommercialiserubberandrice
production. As a result, rice exports reached 180,000
tonnes in 2011 and 207,168 tonnes in 2012, more than
80 percent of which was exported to the EU. Rubber
exports increased by 30 percent, from 46,168 tonnes
in 2011 to 60,032 tonnes in 2012. The overall value of
rubber exports, however, decreased by 10.6 percent in
2012 due to falling global rubber prices, vindicating the
government’s strong focus on diversification.
There is encouraging evidence that some
agricultural diversification is occurring. For example,
fishery lot reforms resulted in 6.7 percent growth in
output in 2012.
The manufacturing industry, specifically garments
and footwear, remained the dominant contributor to
export earnings. Exports of clothing, shoes and other
textileproducts,whichaccountformorethan90percent
of all exports, have increased by an average of 18.1
percent annually between 2000 and 2012, excluding
the 14.3 percent decline amid the 2009 crisis. In 2012
garment exports to the EU increased from 23 percent to
30 percent of total, also resultant of the “Everything but
Arms” trade initiative.
Growth in the service sector was buoyed in 2012 by
high numbers of tourist arrivals, which achieved a year-
on-year increase of 24.4 percent, reaching a total of over
3.5 million visitors. Tourism directly employs 350,000
people and supplements the incomes of many more. It
brought about USD2 billion into Cambodia’s economy
in 2012. There are signs that tourism is diversifying to
include beach and eco tourism, with the development
of Cambodia’s Islands opening up new opportunities
in the sector and drawing more high-end tourists to the
Kingdom. Construction also continued its resurgence
following sharp contraction during the financial crisis,
with indications of a strong performance in 2012,
though concrete figures are not yet available.
Sectoral growth has been built on the solid
foundations laid by sound macroeconomic management.
Despite high growth, inflation in 2012 was contained at
2.7 percent decreasing from the hike of 19.5 percent in
2008; the inflation rate forecast for 2013 is 3 percent.
Other key indicators also suggest healthy macroeconomic
conditions for 2012 and a stable outlook for 2013: the
exchange rate held steady, the budget surplus ran at 1.9
percent of GDP, the current account deficit narrowed,
the overall balance of payments ran a surplus, and
Table 1: Key Macroeconomic Indicators
(% of GDP, if not indicated otherwise) 2009 2010 2011 2012p
GDP nominal (in $ m) 10400 11634 12937 14231
Real GDP (%, growth) 0.1 6.0 7.1 7.3
- Agriculture (share) 33.5 33.9 34.6 36.8
- Industry (share) 21.7 21.9 22.1 21.9
- Services (share) 38.8 38.3 37.5 35.9
GDP per capita ($) 753 830 911 990
Inflation (%) -0.6 4.0 5.5 2.9
National savings (% of GDP) 21.1 24.7 24.4 23.7
Domestic revenue 11.9 13.2 13.2 13.7
Budget expenditure 20.5 21.3 20.7 19.0
Overall deficit -6.4 -8.7 -7.3 -5.3
Investment expenditure 9.1 10.3 9.3 7.3
Domestic investment 13.4 14.1 13.7 13.3
Private investment 16.6 18.2 16.8 16.7
Source: Dr Hang Chuon Naron, Cambodia Outlook Conference
3. international reserves rose to USD3.4 billion (Table 1).
This stability resulted in increased FDI, which is back to
pre-crisislevels,andenabledthegovernmenttowithdraw
its stimulus package.
Revenue collection is making huge strides for the
better as the government seeks to increase resources
for health, education and infrastructure. Tax revenue is
expected to increase from 10.9 percent of GDP in 2011
to 11.4 percent of GDP in 2012. Revenue collection
by the General Department of Taxation is estimated to
increase by 27 percent to KHR2501 billion (USD625
m) in 2012.
Cambodia’s banking sector is becoming increasingly
sophisticated: 32 commercial banks, 7 specialised
banks and 34 licensed microfinance institutions were
operating by 2012-end. Deposits increased by 26.2
percent from USD4.9 billion in 2011 to USD6.2 billion
in 2012 and credit to the private sector in 2012 increased
by 35.4 percent to USD5.9 billion from a year earlier.
Microfinance deposits also increased more than two
fold to USD273.9 million in 2012, while the total loan
portfolio grew by 37.9 percent to USD885.8 million.
Fast but not Inclusive Growth
Cambodia’s progress in improving inclusive development
indicators has lagged behind its impressive economic
performance. Recent research suggests that Cambodia
is moderately pro-poor on consumption (income)
indicators but is making slow progress on ensuring
inclusiveness in non-consumption (non-income)
dimensions, especially education and healthcare.
In education there has been mixed progress. Primary
education has significantly improved, but secondary
and tertiary education remains
problematic. The first issue
is access: many, especially
poor families, cannot afford
the costs of secondary school
and university. Second, higher
education institutions (HEIs)
are poorly regulated and many
provide low-quality teaching
and worthless qualifications,
often at high costs to households.
Third, the current structure of
Cambodia’s tertiary education
does not provide the labour
force with the skills necessary
to find employment. For
example, the sector is weighted
towards providing white-collar
qualifications, such as IT and
business management, despite there being far more jobs
in manufacturing.
Cambodia’s healthcare system, which fails to
adequately cover poor households, is a constraint to
inclusive social and economic development. Countries
with good social service provision commonly
experience higher labour productivity and higher
growth because a healthy population diverts less money
from entrepreneurial activities to healthcare. This same
dynamic holds true for poorer households, which
typically have limited resources to cope with extra
expenses arising from healthcare needs. Cambodia
still lags behind other countries in the region in many
aspects of healthcare (Figure 1).
A particularly contentious issue regarding social and
economic inclusion is land management and tenure
security, especially where smallholders have come into
conflict with Economic Land Concessions (ELCs).
There have been many well publicised land conflicts
of this nature. Government recognises the need for
policy that balances the economic need for ELCs in
the transition to commercial scale farming, while at the
same time protecting the assets of smallholders in a way
that fosters socially inclusive development.
Recently, the government ordered reviews into the
ELC allocation process – many ELCs were found to be
in violation of the terms of contract and were cancelled.
Government must ensure that ELCs are socially and
environmentally sustainable, especially for communities
affected by their activities. The ruling about conducting
thorough Environmental Impact Assessments (EIA)
and monitoring and evaluation (M&E) plans has to be
strictly applied before ELC projects are licensed.
Figure 1: Comparison of Cambodia’s Health Indicators with Comparator Countries’
0.00
10.00
Life expectancy at birth
(2010) 62.54 (Vietnam 74.83)
Child mortality rate
per 1000 live births
(2010) 51 (Thailand12.1)
Maternal mortality
per 100,000 live births
(2008) 290 (Thailand 48)
Prevalence of undernourishment
% population
(2006-2008) 25 (Vietnam 11)
Prevalence of HIV,
% population ages 15-49
(2009) 0.5 (Bangladesh 0.1)
Incidence of tuberculosis
per 100,000 people
(2010) 437 (Laos 90)
Source: Dr Srinivasa Madhur, Cambodia Outlook Conference
4. CDRI – Cambodia’s leading independent development policy research institute
F 56 Street 315, Tuol Kork * PO Box 622, Phnom Penh, Cambodia
' (855 23) 881 384/881 701/881 916/883 603 6 (855 23) 880 734
E-mail: cdri@cdri.org.kh, Website: www.cdri.org.kh
The national land titling programme also aims to
increase household tenure security across the country.
At the prime minister’s behest, the programme has been
expanded to speed up the issuance of land titles to rural
smallholders, thereby increasing their tenure security.
These efforts need to be sustained if universal tenure
security – a foundation of inclusive growth – is to be
achieved.
Failure to respond to underlying issues of
socioeconomic inclusion risks jeopardising the hard-
wongainsCambodiahasmadeoverthelasttwodecades.
There is a consensus that persistent high inequality in
income and especially opportunities imperils sustainable
growth. Worse, inequality can undo social cohesion and
potentially ignite unrest. Thus, while enjoying the fruits
of high growth, Cambodia has to be ever vigilant of the
levelofsocialinequalitytoensurethatgrowthprosperity
is equitably distributed to all segments of society.
Moving towards Middle-Income Status
The structure of Cambodia’s economy is changing as it
moves towards middle-income status. Looming is the
so-called“middle-incomecountrytrap”,aprecedentthat
suggests economic development stalls as rising per capita
GDP diminishes the effect of comparative advantages
that fuelled past high growth. If not countered now, this
effect could spell the end of Cambodia’s remarkable
growth surge.
Policy makers recognise that Cambodia’s comparative
advantage will change as its economy develops. At
present, a major advantage that has attracted investment
and made exports competitive is low-cost labour, but
this advantage will be lost as per capita GDP grows. It is
essential, therefore, that the labour force is appropriately
skilled to diversify economic activity into more complex,
more value-added industrial, agricultural and service
industries.
The government has been promoting Technical
Vocational Education and Training (TVET) programmes
to up-skill the labour force. It is now imperative that
such programmes be expanded, both to prepare for the
ASEAN Economic Community in 2015 and to avoid
the middle-income trap. This requires an institutional
mechanism that brings together government, higher
education institutions and the private sector to develop
curriculums that are dynamic and flexible to keep up
with rapidly changing economic conditions.
Strong government efforts are also needed
to strengthen the financial sector to encourage
entrepreneurialism and diversification. Like other
countries at a similar stage of development, Cambodian
banks tend to provide credit to big companies but not to
smallormedium-sizedenterprises(SMEs).Creditneeds
to be extended to these future drivers of growth, but
must be well regulated to reduce risk. Credit extension
should form part of a broader strategy to formalise the
economy, which will increase both investment and
revenue collection. In the longer-term, de-dollarising
the economy is crucial to deepen the financial system
and further develop the financial sector.
Policy makers must also act to take advantage of
China’s position as a key driver of global economic
growth. Regional trade and investment is increasingly
providing new opportunities for growth in traditional
sectors as well as in new areas such as mining, hydropower,
cash crops and oil. To seize the opportunities offered
by a growing China, Cambodia will have to develop the
needed hard and soft infrastructure, and, against the
current global background of green and inclusive growth,
it will be expected to do so in an environmentally and
socially responsible manner.
A strong ASEAN will increase Cambodia’s
negotiating power and enable the economy to benefit
from favourable trade agreements with China and other
emerging Asian economies. Cambodia, as Chair of
ASEAN in 2012, encouraged member states to integrate
the requisite reforms to promote inclusion into the
ASEAN Economic Community 2015. There is a danger,
however, that Cambodia’s policy space may be reduced
by commitments to ASEAN. This is an important issue
for Cambodia, which is lagging behind its neighbours
in a number of areas and where decisive policy action
is needed.
It is also crucial that policy frameworks are receptive
to the increasing intra-regional flows of foreign
investment. A prerequisite to this is improvement
in the country’s business environment. The biggest
constraint to creating a climate conducive to setting up
and running a business is corruption, especially when it
comes to conflict resolution and contract enforcement.
Long-term, diversified foreign investment demands an
institutional environment that promotes strong property
rights and even distribution of market information. The
capacity of existing institutions can be re-oriented to
satisfy this need.