presented by chan sophal cambodian economic ......chinese or ethnic chinese overseas. • need to...
TRANSCRIPT
Cambodia's Industrial Development
Presented by Chan Sophal Cambodian Economic Association
Helsinki, Finland 24-25 June 2013 1
2
Evolution of Industry in Cambodia
• 1960s and early 1970s Strong growth driven by manufacturing New factories built mostly by foreign aid
and run by state, thus inefficient
• 1975-1979 Manufacturing was destroyed People were evacuated to work in rice field
3
• 1980s Socialism backed by Vietnam and Soviet Union A little manufacturing was resumed with
assistance from Vietnam and Soviet Union All factories were owned by the state Industrial products were produced for local
consumption or traded with the communist bloc
Evolution of Industry in Cambodia
4
Late 1980s Cambodia freed its economy, initially with
Thailand and other neighbouring countries Joined ASEAN in 1999 Joined WTO in 2003
Evolution of Industry in Cambodia
5
Cambodia’s economic growth since 1993
4.1%
9.1%
6.4%5.9%
4.0%
4.7%
12.7%
10.7%
7.4%
6.6%
8.5%
10.3%
13.3%
10.8%10.2%
6.7%
0.1%
5.5%6.0%
0%
2%
4%
6%
8%
10%
12%
14%
1993 1995 1997 1999 2001 2003 2005 2007 2009e 2011p
Economic Growth Rate: 1993 - 2011
Source: Hang (2011)
6
Per capita GDP since 1993
7
Percentage Share of GDP
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
49.3
46.4
47.6
49.6
46.5
46.3
46.3
43.5
37.9
36.7
32.9
33.6
31.2
32.4
31.7
31.9
32.5
13.6
13.0
14.4
14.8
15.7
17.1
17.4
19.1
23.0
23.6
25.6
26.3
27.2
26.4
27.6
26.8
22.4
37.1
40.6
38.0
35.5
37.7
36.6
36.3
37.5
39.1
39.7
41.5
40.1
41.7
41.2
40.8
41.3
45.1
Services Industry Agriculture
Source: ADB
8
Share of employment by sector
9
72% 77% 68% 72% 67% 65%
5% 4%
9% 9%
11% 11%
23% 18% 23% 19% 22% 24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1993 1998 2004 2008 2009 2010
Agriculture Industry Services
Share of main industries
Manufacturing : 72.8% Construction : 23.7% Electricity, gas, and water : 2% Mining : 1.5%
10
Structure of manufacturing sector 1993-2009 by output
0%
20%
40%
60%
80%
100%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Manufacturing 1993-2009
Food, Beverages & Tobacco Textile,Wearing Apparel & Footwear Wood, Paper & Publishing
Rubber Manufacturing Other Manufacturing
Source: MEF (2010)
11
Export by commodities, predominantly garments
0
500
1000
1500
2000
2500
3000
3500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Textile and Textile Articles Agricultural product Others
Source: Ministry of Commerce
12
Garment Export and its share
Food price soaring lead to more agriculture export.
13
Ownership of Garment Factories in Cambodia
Hong Kong 19%
Taiwan 24%
Malaysia 5%
China, PRC 16%
Korea 11%
Singapore 4%
Cambodia 9%
Other 12%
Country of Ownership
Source: MEF
14
77,048 Industrial Establishments only 1.5% are medium or large, sharing 36% of industrial employment (Economic Census 2011)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Number of industrial establishments
Other
Textile, Wearing appareland Footware (TWF)Food, Beverages andTobacco (FBT)
15
77,048 Industrial Establishments only 1.5% are medium or large, sharing 36% of industrial employment (Economic Census 2011)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Number of industrial establishments
Other
Textile, Wearing appareland Footware (TWF)Food, Beverages andTobacco (FBT)
16
Distribution of employment by 77,048 industrial establishments
15
68
Distribution (%)
Food, Beverages andTobaccoTextile, Wearing Appareland FootwareOther
17
Distribution of 77,048 Industrial Establishments by their Age
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% firms
20+ years11-20 years6-10 years0-5 years
18
Spatial distribution of 32,257 FBT establishments
19
Banteay Meanchaey
2%
Battambang 10%
Kamong Cham 14%
Kampong Chnang
2%
Kampong Speu 3%
Kampot 2%
Kandal 9%
Koh Kong 1%
Phnom Penh 40%
Prey Veng 2%
Siem Reap 7%
Sihanuk Vill 6%
Svay Rieng 1%
Takeo 1%
Spatial distribution of 25,156 TWA establishments
20
Banteay Meanchaey
2% Battambang
1% Kamong
Cham 2%
Kampong Chnang
2% Kampong Speu 2%
Kampong Thom 1%
Kampot 1%
Kandal 20%
Phnom Penh 61%
Prey Veng 1%
Pursat 0%
Siem Reap 2%
Sihanuk Vill 1%
Svay Rieng 1% Takeo
3%
Sunrise and Sunset Industries (Average growth of value added)
21
1993-1997 1998-2004 2005-2007 2008-Present Sunrise (Average share growth rate >0.05%)
Textile, Wearing Apparel & Footwear Wood, Paper & Publishing Rubber Manufacturing Electricity, Gas & Water
Textile, Wearing Apparel & Footwear Mining Construction
Mining Textile, Wearing Apparel & Footwear Non-Metallic Manufacturing Construction
Mining Textile, Wearing Apparel & Footwear Food, Beverages & Tobacco Non-Metallic Manufacturing Electricity, Gas & Water
Sunset (Average share growth rate <-0.05%)
Mining Food, Beverages & Tobacco Non-Metallic Manufacturing Basic Metal and Metal Products Construction
Food, Beverages & Tobacco Wood, Paper & Publishing Rubber Manufacturing
Food, Beverages & Tobacco Rubber Manufacturing Wood, Paper & Publishing
Wood, Paper & Publishing Construction
Major Issues: • FDI projects received very generous tax exemptions.
It yields little revenue for government. • SMEs face high tax regimes, thus most stay informal
and as a result face constraints to growth capital. • Little backward and forward linkages within the
country. Most garment factories are just sites of Chinese or ethnic Chinese overseas.
• Need to diversify industrial base. • => Industrial development policy is being prepared
22
Conclusion 1. Political stability, location of the country and openness to
FDI allowed cheap labor and global market access to be well exploited, contributing to high economic growth in the past 20 years (about 8% per annum).
2. The next stage of high growth will soon depend more on efficiency from both domestically free and fair competition and international competitiveness.
3. Regional integration and globalization provide Cambodia with opportunities for constructive engagement and learning to compete.
4. Given the turbulent history in the past century, it is difficult to expect more. Cautious optimism for the future!
23
THANK FOR YOUR ATTENTION!
24