Phnom Penh: The World Bank says Cambodia needs to strengthen production and exports by taking advantage of its new investment law and its Free Trade Agreement with China to accelerate economic recovery.
In a new report published on Wednesday, the World Bank declared, “To accelerate economic recovery and boost job creation, it is important that Cambodia take the necessary steps to strengthen external competition to boost production and exports.”
It emphasizes that, in particular, “addressing supply-side constraints by reducing business, logistics and energy costs, while eliminating the lax implementation of key job-related regulations that hinder recovery” should ensure a strong rebound in the labour market.
The World Bank report found that although agriculture remained resilient and exports recovered, supporting better external demand, other growth drivers, especially tourism, construction and real estate, continued to be affected significantly from the ongoing spread of Covid-19. “However, investment remains resilient.”
At the same time, the World Bank report stated that “slow recovery of the economy and the reduction of food consumption as the main strategies to deal with the risk will affect the ability to recover from epidemics that can impair progress of poverty reduction that Cambodia has achieved over the years.”
Secretary General of the Council for the Development of Cambodia, Sok Chenda Sophea, says the new investment law was in line with the Free Trade Agreement to open up the Cambodian market and attract more investment.
He says “The new investment law is attractive, and will attract more investors and encourage more local investors to participate. It has many points that help the local industry by attracting investment and creating jobs.”
The Cambodia-China Free Trade Agreement will enter into force in early 2022. Cambodia will further benefit from the Cambodia-China Free Trade Agreement on what Cambodia is gaining from the Chinese side in boosting trade volume between the two countries and Cambodia's exports. When it comes into force, Cambodia can export more than 300 items to China without paying taxes.
