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Little Benefit From Regional Corridors: Report

Cambodia has not benefited as much as it could have from its entry into the Greater Mekong Subregion six years ago, a report has found.

Inclusion in the region’s economic corridors was to have boosted the Cambodian economy, but a report from the Cambodia Development Resource Institute says the country has not taken advantage of the benefits.

Both the government and the private sector maintain a low awareness of the value of regional integration, while few financial or human resources have been put in place, the annual development report says.

There is little technical assistance or information sharing and weak national consultation. And authority is concentrated into too few “overstretched” ministries and agencies. Meanwhile, some institutions responsible for integrating Cambodia into the region take in informal fees and are resistant to change.

Competition in the private sector has also prevented cooperation across borders, the report says.

Ros Silva, deputy secretary general of the Ministry of Economy and Finance, said the challenges derive from Cambodia’s new participation in the Greater Mekong Subregion.

“It is new work, so our understanding of the issue is limited,” he said. “We face a shortage of knowledge and adequate information-sharing, partly because the relevant people implementing the work haven’t focused much on the GMS’s public relations work.”

Government ministries have begun solving problems in customs and administration on the border and improving the infrastructure that will allow Cambodia to benefit from the flow of trade.

With assistance from the Asian Development Bank, Mekong countries Burma, Cambodia, China, Laos, Thailand and Vietnam have agree to turn three corridors into economic hubs.

This includes among them a north-south corridor, an east-west corridor and, most important for Cambodia, a southern corridor that links the country to Laos, Thailand and Vietnam.

In the last decade, Cambodia has made progress in socio-economic development, experts say, which led it to become one of the fastest growing economies in Asia, at least through 2007.

Trade between Cambodia and other Asean countries climbed from $1.8 billion in 2007 to $2.2 billion in 2008, though much of that was through imports. Cambodian exports for the period were $121 million, giving Cambodia one of the largest trade imbalances in the region.

Ngoun Meng Tech, director general of the Cambodian Chamber of Commerce, said he hoped the southern corridor, which links 21 Cambodian provinces four provinces in Vietnam and six each in Laos and Thailand, might help.

“We can trade our products easily, tax free and over short distances,” he said. “So the cost of transportation will be reduced, which benefits us.”

Between 1992 and 2008, the ADB has provided more than $11 billion in loans to the six Mekong countries to improve infrastructure, and the each country will have to improve transportation facilities, tourism, hydropower and disease control by a deadline of 2020.

However, CDRI said different policies and regulations between the countries remain highly problematic, a situation that won’t be resolved without political will and a commitment to fair and effective cross-border trade.

Cambodia must raise awareness of the corridor deal with the government and private sector and provide cross-border trade procedures, CDRI found. And the ADB needs to play a stronger role in improving cooperation among the six countries.

The study highlight the importance of Cambodia government to raise awareness among government and private sector and provide on-time solution for cross border trade procedure and ADB has to take more roles in strengthening cooperation among GMS countries.

“The [GMS’s corridor] development doesn’t go as fast as we expected because of political differences. So when we want a smooth cooperation, we have to come across many small challenges as well as to find ways to change those differences,” said Chantha Kim, spokesman of ADB.

Ros Silva said relevant ministries have finalized strategies to push more development at southern economic corridor and those strategies will be discussed at August ‘s GMS ministerial conference in Vietnam.