Cambodia-Indonesia goods trade balloons by 48% in 2022
Cambodia-Indonesia goods trade balloons by 48% in 2022
The merchandise trade volume between Cambodia and Indonesia totalled $948.533 million in 2022, surging by 48.27 per cent over a year earlier, with Cambodian imports constituting a 96.12 per cent share, inching up by 1.08 percentage points on a yearly basis, according to the General Department of Customs and Excise (GDCE).
In 2022, Cambodian goods exports to and imports from Indonesia amounted to $36.839 million and $911.694 million, respectively, up 15.9 per cent and 49.96 per cent year-on-year, expanding the Kingdom’s trade deficit with the archipelago nation by 51.84 per cent to $874.854 million, from $576.167 million in 2021.
Last month alone, the Cambodian-Indonesian merchandise trade volume was to the tune of $118.29 million, up 63.8 per cent from $72.20 million in December 2021 and up 102.9 per cent from $58.30 million in November 2022.
The Kingdom’s exports accounted for just over $3.5 million, up 33 per cent year-on-year but down 12 per cent month-on-month, while imports came to nearly $114.8 million, up 65.0 per cent year-on-year and up 111.3 per cent month-on-month.
December was the best month for both two-way trade and Cambodian exports to Indonesia last year, with May in second-place recording $96.20 million and $94.60 million, while the top two for imports were September and July at $5.19 million and $4.16 million, GDCE statistics indicate.
The Kingdom’s free trade agreements (FTA) have become a big draw for Indonesian and other foreign investors, particularly the bilateral deals with China and South Korea, as well as the Regional Comprehensive Economic Partnership (RCEP), Cambodia Chamber of Commerce vice-president Lim Heng told the Post on January 19.
He assured that trade deficits are not necessarily bad news, reasoning in Cambodia’s case that, as a developing country with limited resources, the Kingdom requires raw materials and equipment to be brought in from abroad to fulfil local demand, including for the production and processing of export goods.
“It’s important to look at export markets, as the prospects for Cambodia’s overseas sales are brighter than ever,” Heng opined.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia (RAC), was not so quick to dismiss the Kingdom’s trade deficit with Indonesia as of little consequence.
The local export community must take a hard look and identify the Kingdom’s most valuable commodities, should it seek to notably ratchet up exports, he suggested, arguing for the merit of penetrating the Indonesian market with as many Cambodian goods as possible.
According to Trading Economics, out of Cambodia’s $31.78 million worth of goods exports to Indonesia in 2021, “knitted or crocheted fabrics” accounted for the most at $6.40 million, followed by “glass and glassware” ($5.97 million), “articles of apparel and clothing accessories, knitted or crocheted” ($5.13 million), and “Footwear, gaiters and the like” ($3.58 million).
The next four items were: “articles of apparel and clothing accessories, not knitted or crocheted” ($3.22 million), “printed books, newspapers, pictures” ($1.29 million), “miscellaneous articles of base metal” ($1.23 million) and “electrical, electronic equipment” ($1.13 million).
For reference, the eight categories respectively correspond to chapters 60, 70, 61, 64, 62, 49, 83 and 85 of the harmonised tariff schedule.
The RAC’s Vanak pointed out that Indonesia is ASEAN’s most populous nation and largest economy as well as a member of the Group of 20 (G20) – an intergovernmental forum made up of 19 countries and the EU, representing most of the world's largest economies.
“Delving into the demand as well as the production of goods befitting the Indonesian market is an opportunity to bridge the bilateral trade gap,” he said, underscoring that a decisive uptick in Indonesian investors within the local ecosystem could secure an appreciable improvement in exports.
Interestingly, the Ministry of Tourism tallied an all-time record of 75,653 Indonesian visitors to Cambodia last year, of which the majority had their purpose of visit marked “business”, at 55,107, followed by “holiday”(20,328) and “others” (218) – compared to second-place 2019’s 66,804 (26,410 business; 38,530 holiday; 1,864 others).
The increase in Indonesian business travellers could be attributed to the establishment of the Indonesian Chamber of Commerce in Cambodia (IndoCham) on September 23, 2021, as well as a number of key business-related events that have paved the way for partnerships between public and private organisations of both countries.
Sok Chenda Sophea, secretary-general of the Council for the Development of Cambodia (CDC), the government's highest decision-making body for large-scale investments, was particularly confident in the fruits that the February 22, 2022 Indonesia-Cambodia Investment Dialogue would yield.
Chenda Sophea said he expected that, as a result of the dialogue, the Indonesian business community could gain a clearer and deeper understanding of the new Law on Investment, and thereby help persuade more investors from the archipelago nation to bet on the Kingdom.
At the event, Indonesian ambassador Sudirman Haseng vowed that his embassy would work with IndoCham to promote trade between the two Southeast Asian countries and attract investment to the Kingdom.
The embassy and IndoCham “will work with relevant Cambodian ministries and institutions to bolster Indonesian investment in Cambodia further”, he affirmed.
The dialogue was held at the CDC, and organised in collaboration with the embassy and IndoCham.
On the occasion, the CDC’s Chenda Sophea commented that, historically, Indonesian investors active in Cambodia have been significant contributors to the Kingdom’s economic growth.
He also shared an optimistic outlook on prospects for investment from Indonesia, voicing hope that more Indonesian investors would enter the Cambodian market, drawn in by the huge benefits offered by the Kingdom’s FTAs.
