PHNOM PENH: Prime Minister Hun Sen expects Cambodia to elevate from the UN’s list of “least developed countries” by 2027, which could mean the end of preferential trade benefits such as the European Union’s Everything But Arms (EBA) tax exemptions. He believes that the perseverance of the Cambodian export market is strong enough to do without the benefits, however, which are being replaced by other free trade agreements.
His estimate is backed up by a recent report of the Asian Development Bank, which stated, “This is a major achievement, as graduation from the least developed country status means that a country has achieved significant economic and social development goals."
During a meeting with more than 16,000 workers in Kampong Speu province on the morning of June 4, the PM noted that after the EBA withdrew preferential tax exemptions to about 20% of Cambodian exports due to human rights concerns in 2020, Cambodia’s export numbers have remained high, proving the resiliency of the market. "We export the same whether we pay tax on it or not. It only means less profit,” he said.
The Prime Minister championed Cambodia’s economic goals the next morning to a crowd of nearly 6,000 graduates of the Royal University of Law and Economics. He noted that the current rate of economic growth provides many opportunities and has persevered in the face of climate change, epidemics and geopolitical uncertainty.
Cambodia plans to end its status as a “least developed country” by 2027, achieve “high middle-income” status by 2030 and “high-income” by 2050 by expanding overseas markets. Free trade agreements have already been signed, including the Regional Comprehensive Economic Partnership (RCEP), the Cambodia-China FTA, and the Cambodia-South Korea FTA. Cambodian Ministry of Commerce's undersecretary of state Penn Sovicheat said these agreements have not only given a boost to the kingdom's sustainable trade growth, but have also become a magnet to attract more foreign investment. Prime Minister Hun Sen stressed that this goal can only be reached with the participation of all stakeholders and citizens in maintaining peace and political stability.
