At the request of Cambodia's Ministry of Commerce, UNCTAD has held a sensitization workshop on issues related to the question of Cambodia's graduation from the United Nations category of Least Developed Countries (LDCs).
The Capacity-building Workshop on Policies and Strategies for Sustainable Graduation of Cambodia from LDC Status: Prospects, Opportunities and Challenges was held in Phnom Penh from 8 to 10 October 2013. Senior government officials from a range of Cambodian ministries and agencies took part in the workshop, where conceptual, methodological, statistical and substantive policy issues related to graduation from LDC status were discussed in depth.
The event was officially opened by Her Excellency Dr. Tekreth Kamrang, Secretary of State, Ministry of Commerce. Dr. Kamrang, in her opening statement, emphasized the critical importance of the workshop to Cambodian policymakers, and expressed the gratitude of the Government of Cambodia for the continued technical and capacity-building support of UNCTAD.
Following the end of the protracted conflicts in the country and in view of the resulting socio-economic difficulties, Cambodia joined the group of Least Developed Countries in 1991, after the General Assembly had endorsed the relevant recommendation made by the Committee for Development Planning.
Since then, Cambodia has been making significant socio-economic progress. In fact, with its average annual growth rate of 6.9 per cent between 2000 and 2012, Cambodia registered the second-highest economic growth rate among LDCs in the region, after Myanmar which recorded a rate of 11.22 per cent.
Additionally, the country's performance in the United Nations Human Assets Index improved significantly between 1997 and 2012, by 75 per cent.
In sum, while Cambodia may not be able to meet at least two of the graduation criteria in the near future, it will probably meet the per capita income threshold in a few years' time, if its current level of economic growth continues uninterrupted.
The concept note that was prepared by UNCTAD as a background document for the capacity-building workshop indicates that exports of garments, and foreign direct investment (FDI), have played a decisive role in Cambodia's growth and poverty reduction achievements, although the country still faces major challenges in its efforts to realize further structural progress.
It was emphasized that graduation should be viewed as the consequence of sustained economic growth and development, which implies building productive capacities, and achieving structural economic transformation - including diversification, value addition and employment creation. Hence, graduation is not an end in itself; rather, it should be the expected consequence of structural transformation. In this regard, the workshop was timely, and crucial for sensitizing and mobilizing all stakeholders involved in facilitating Cambodia's broad-based, inclusive and sustainable growth and development.
The workshop also highlighted the importance of exports and market diversification, of Cambodia's participation in regional and global value chains, and of efforts to benefit from trade and investment opportunities at subregional, regional and global levels.
It is important for Cambodia to continue efforts to improve its business climate, realign its exchange rate, and build its infrastructure further, with a view to improving export competitiveness, achieving diversification, and enjoying continued economic growth.
The recent efforts to diversify the export basket by favouring FDI on bicycle manufacturing and bicycle parts, as well as the initiative of attracting FDI to other sectors (such as the automotive sector) from ASEAN partners and the Asian region as a whole, should be pursued further.
The workshop also underscored the need for Cambodia to create a conducive domestic macroeconomic environment to enhance the role of the private sector, and to continue efforts to increase the impact of economic growth on poverty reduction.
The workshop concluded on the positive note that Cambodia is making rapid progress towards the thresholds for graduating from LDC status, although it has not, so far, met any of the three graduation criteria.
