QR MoU boosts Malaysian links, enhances trade
QR MoU boosts Malaysian links, enhances trade
Malaysia emerged as Cambodia’s 15th-largest trading partner as their bilateral trade surged over 35% in January, according to the General Department of Customs and Excise (GDCE).
Trade volume between the two nations reached $46.41 million in the first month of 2024, a 35.2% rise from $34.32 million in January 2023.
Malaysian exports to Cambodia accounted for $35.32 million, reflecting a 25.6% increase. Cambodian exports to Malaysia, valued at $10.49 million, grew by an impressive 83.1%.
Cambodia’s trade deficit with the predominantly Muslim nation amounted to approximately $25.43 million for the month, notably higher than the $22.86 million recorded in January 2023.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, explained to The Post on March 10 that the two ASEAN countries regularly engage in mutual export and import activities.
He attributed Malaysia’s higher export level to its status as a larger and more populous country with a long-standing production capacity. He said its manufacturing scope extends beyond agricultural goods, encompassing electronics, machinery, construction materials and various daily necessities.
Vanak emphasised that through robust cooperation, both nations, as members of the Regional Comprehensive Economic Partnership (RCEP), are poised for continued trade expansion.
“The increase in trade volume signifies the growth in demand and production capacity of each country, which are mutually beneficial. However, Cambodia’s balance sheet still shows a large deficit, necessitating greater effort in producing goods that are in high demand in Malaysia,” he stated.
Keo Mom, CEO of Ly Ly Food Industry Co Ltd, one of the Kingdom’s leading food processing enterprises, highlighted Malaysia’s significance as a major regional market.
She underscored the need for Cambodia to further tap into this market, given its abundant potential for exporting agricultural products.
“I believe that the government’s policy on agriculture and the sector’s development will play a crucial role in boosting the export of Cambodian agricultural products to Malaysia in the future,” she said.
Mom noted that products from her company have been available in Malaysia for about five years, albeit in modest quantities.
National Bank of Cambodia (NBC) governor Chea Serey and Bank Negara Malaysia (BNM) governor Abdul Rasheed Ghaffour signed a memorandum of understanding (MoU) in late February to strengthen bilateral cooperation.
The agreement between the two central banks focuses on promoting financial innovation and enhancing the efficiency and security of cross-border payments. The MoU aims to benefit the citizens and businesspeople of both countries and facilitates the implementation of QR code-based payments between Cambodia and Malaysia.
“It will simplify the process for Malaysians to make payments in Cambodia by scanning a QR code, and similarly, Cambodians can make payments in Malaysia using the [same] network. The system will employ local currencies for transactions and will be underpinned by a cooperative mechanism to ensure more efficient and safer cross-border payments. The MoU is set to boost trade and tourism activities in both countries, contributing to regional economic growth,” stated the NBC.
As of the end of 2021, the NBC reported that foreign direct investment (FDI) in Cambodia totalled $41 billion. Malaysian investors ranked 6th with an investment of $1.9 billion, constituting 4.6% of total market share, following China, South Korea, Singapore, Vietnam and Japan.
In 2023, bilateral trade between Cambodia and Malaysia reached $632.44 million, marking a 1.9% increase from 2022. Cambodian exports to Malaysia amounted to $105.05 million, a decrease of 6.1%, while imports stood at $527.38 million, an increase of 3.7%, according to the GDCE.
