PM announces Cambodia ready to exit from LDC status
PM announces Cambodia ready to exit from LDC status
Prime Minister Hun Manet said that the Royal Government of Cambodia (RGC) is preparing a strategy to exit the least developed country (LDC) status by 2029.
Presiding over the celebration of the 20th Anniversary of Cambodia’s Accession to the World Trade Organisation (WTO) at Sokha Phnom Penh Hotel in the capital, yesterday, Mr Hun Manet said Cambodia needs to implement measures to ensure sustainable development post-exit from the least developed country status in 2029.
Cambodia has received the evaluation of the Committee for Development Policy (CDP) to pass the three-year review so that the Kingdom can leave the least developed country status.
Harping on the salient scenarios in the post-exit, Mr Hun Manet said, “We are ready to leave least developed country status, but when we leave what will we face? We have to lose some of our favourable financial principles. So, we have to be self-reliant and independent.”
Cham Nimul, Minister of Commerce (MoC), said that while Cambodia leaves the least developed country status in 2029, it will face the loss of preferential tariffs and stricter rules of origin for goods, which could affect Cambodia’s competitiveness in key markets.
“Cambodia must turn these challenges into opportunities by enhancing competitiveness, engaging in regional and global supply chains, diversifying markets, expanding production, adding value, strengthening trade facilitation and attracting investment in new industries to support sustainable and resilient growth,” Nimul said.
“These tasks are set out in the environmental section of the Pentagonal Strategy I, which the Ministry of Commerce and relevant ministries are actively implementing.”
Nimul went on to add that to address challenges and promote trade in this new context, the Ministry of Commerce is developing and executing strategies to maximize the benefits of free trade agreements, including the ASEAN Free Trade Agreement, the ASEAN Plus One Free Trade Agreement and bilateral agreements such as those with Cambodia-China, Cambodia-South Korea and Cambodia-United Arab Emirates.
The ministry will continue to negotiate to establish new free trade agreements with potential partners to expand markets and strengthen Cambodia’s exports, ensuring resilience and adaptability to emerging challenges in advanced free trade agreements.
Strengthening private sector governance and fostering a conducive environment for business, investment and trade through improved trade facilitation and faster, more efficient services via automation, quality, efficiency and transparency.
“The RGC continues to prepare and strengthen the implementation of laws, policies and regulations related to trade and collaborate with development partners to implement a detailed study project on the impact on Cambodia’s trade and strategy for a smooth exit from the least developed country status,” Nimul emphasised.
Duch Darin, an economist and professor at the Royal School of Administration, told Khmer Times that Cambodia’s transition from a least developed country in the future is not only a testament to its economic achievements but also a strategic shift toward sustainable development and continuing to strengthen its own economic independence as well.
He said that the effective implementation of government policies along with the benefits of strengthening greater economic independence will ensure that this change is a positive step for the Cambodian people and the country’s future in competing in the global economy.
“Cambodia’s readiness to transition from the LDC reflects Cambodia’s economic progress over the past two decades, as evidenced by the fact that in 2004 gross domestic product (GDP) was estimated at $5.34 billion, increased to $31.77 billion compared to 2023,” said Darin.
“This economic growth is proof that Cambodia has built a strong economy that can sustain itself. On the other hand, through its membership in the World Trade Organization (WTO), Cambodia benefits from its integration into the world economy by entering international markets. Cambodia’s exports have diversified from textiles and garments to other agricultural production, reducing the impact of external vulnerabilities.”
Socio-economic analyst Chey Tech told Khmer Times that when Cambodia exits the least developed country status, it will lose three benefits: first, trade preferential for export to international markets, second is loss of aid, especially grants, but Cambodia will continue to get concession loans, and the last one is the Kingdom will face more competition due to the loss of trade preferential.
“What Cambodia will benefit from post-LDC status is that it will be popular in the region as well as in the world in terms of its status — economic and social development,” Tech said.
He stressed that Cambodia will also gain the trust of investors who will invest in Cambodia. The Kingdom can also capture the international market by exporting to more regional and global markets. The joint ventures will be able to receive additional concession loans to develop the economy and infrastructure in Cambodia.
“Overall, leaving the LDC will bring more advantages to Cambodia. I do not think we should wait any longer as the Royal Government’s Pentagonal Strategy will help the Kingdom become a high-middle-income country by 2030 and a high-income country by 2050.”
