Project description

Title: Trade promotion Cambodia
Commissioned by: Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ)
Country: Cambodia
Lead executing agency: Ministry of Commerce
Overall term: April 2004 to March 2007

Context

Since the introduction of a free market economy in 1985, Cambodia has made significant progress in the area of liberalisation of its economy. The average annual rate of economic growth has been 5 percent and the gross savings ratio has increased by an average of 10 percent between 1996 and 2001.
These figures have to be qualified, of course, against a background of an extremely low per-capita income (259 USD in 2001) and a relatively high annual population growth rate (on average 2.6 percent from 1999 - 2002). Also, the impressive growth of exports, of up to 60 percent in some years,  is almost completely based upon the export of textiles.
80 percent of the population, however, still work in agriculture and can not yet profit from the development. But there are also structural and developmental problems within the agricultural sector itself: only one fifth of Cambodia's area is used for agriculture, of which in turn only 14 percent are artificially irrigated.

In spite of the stable political situation in Cambodia and, in comparison to the rest of Asia, an in part exemplary economic legislation, the practical implementation of many reform projects falls short of the requirements and possibilities of the country.

Further to the mentioned structural deficiencies in agriculture, organisational and personnel shortfalls in tax and customs administration represent, above all, an enormous obstacle for free-flowing imports and exports.

Objective

The supply of Business Development Services contributes to the promotion of employment and to the generation of income in the Cambodian private sector.
By using these services, the efficiency, in particular, of value chains and the volume of trade in wares from the product groups cashew nuts, silk and organic rice in the agricultural sector, is increased.

Approach

The project concerns itself with the Cambodian part of the worldwide programme "Trade policy and promotion / Economic reform and establishment of a free-market economy (German abbreviation "WIRAM").

It makes, in particular, the following contributions in Cambodia:

• Implementation of market analyses (actual condition and potentials) for various economic sectors;
• Development of sector-specific promotional measures, of suitable product profiles as well as of respective accompanying trade-increasing Business Development Services (BDS); in this working area the focus is on examining the product groups cashew nuts, silk and organic rice; advising extends from operational improvements to cooperation with domestic and overseas trade and investment partners;
• practical implementation and testing of promotional approaches and BDS;
• transfer of experiences and results to other sectors and product groups.