It seems Cambodia has just thrown itself into the deep end of the water by becoming a member of the World Trade Organisation, a multilateral trading system that aims to foster free and fair international trade.
               Since its emergence from war and upheaval, Cambodia has been very keen, for economic recovery, to integrate itself into the world community with internal reforms. Though the initial reforms have produced some positive results, the country is still plagued with major socio-economic problems. Its engine of growth for the past few years, the garment industry, is facing uncertainty and looking toward the WTO for solutions.
               Notwithstanding some scepticism, the WTO membership is expected to help protect and expand markets for Cambodian garment exports and other products after the removal of the US quotas from 2005, even though the Cambodian industries have not been well known for their cost effectiveness. The membership also comes with many conditions that the garment industry and the country as a whole may not be able to comply with. There are reasonable doubts if the benefits will really exceed the costs associated with the membership.
               It is, however, arguable that the conditions imposed for the WTO accession may just be what the country needs for genuine institutional and policy reforms. Cam-bodia will indeed have a steep learning curve. It is, in effect, being put to a litmus test that will make or break the country after the National Assembly ratifies the accession to the WTO...... [  For full story click here ]

Rethinking
Gasoline Pricing Policy

                The Cambodian government has maintained a high tax on fuel policy for the past 10 years. If the intention of the policy is to raise the State revenue from fuel consumption and to control the usage of motor vehicles for the sake of a greener environment, then the policy has failed. While the State has missed out on hundreds of millions in tax revenues since 1994, the increase in number of vehicles on the road has been unabated.
                An alternative fuel tax policy based on parity pri-cing with neighbouring countries would call for a drastic reduction in the fuel tax rates, especially on gasoline.Financial incentives for fuel smuggling would be removed, which would effectively divert the current smuggler windfalls to the State budget. Consumers would be better off as a significant proportion of their living expenses would be reduced. Also many sectors of the economy would become more competitive as one of their major production input costs would be cut..... [  For full story click here ]

Cambodia’s Economy
in the Election Year 2003

               The Cambodian economy in 2003 has been driven mainly by better than expected outcome of the garment export sector and better yields in the agricultural sector. The severe contraction in tourism activities due to SARS since early March has dampened the economic growth, while another major sector, the construction, remains more or less neutral. However, the growth in number of approved investment projects may reflect an optimistic view of the future. More than one third of them have been in capital intensive projects for tourism. With foreign funding, the public sector has remained active in infrastructure development.
               The overall subdued economic activities have helped keep inflation low, even though prices of some consumer items did fluctuate wildly during the first half of the year. But the financial market has been nervous, especially before the July 2003 national election, and depreciated the riel. For the first eight months, the government has experienced a budget deficit, which has been funded by cash withdrawal from the central bank, loans from private sector, and issues of short-term Treasury bills and long-term Government bonds........ [  For full story click here ]