Exports from Special Economic Zones (SEZs) are projected to reach about $1.2 billion this year, up more than 80 percent over last year, according to figures from the Commerce Ministry.
Exports from SEZs totaled $672 million last year.
So Socheat, director of the ministry’s Europe, Middle East and Africa department, said the surge was due to economic growth and the government’s attractive investment policies. “Our economy is growing around 7 percent annually and our policies encourage investment, so this is attracting investors,” he said, adding that the SEZs provide everything an investor needs, from documents to factories.
Mr. Socheat also said more exports are going to Europe. “In general, the export destination has changed its direction a bit to the European market over the last few years,” he said, adding that the US market had been the major destination for Cambodian goods such as garments and footwear. Duty- and quota-free access to the European Union under its “everything but arms” trade treaty is the major driver of rising exports to the EU, Mr. Socheat said.
Garments and footwear are the major exports to the EU, but rice, Kampot pepper and bicycles are also being exported to the world’s largest market, he added.
Economist Srey Chanthy said SEZs benefit the country. “They can make Cambodia very competitive and as a result attract more investment, create jobs and grow the economy,” he said.
“A SEZ is like a one-stop center for exporters. Services and manufacturing activities are located in one area where they can benefit from each other and achieve economies of scale,” Mr. Chanthy said. “SEZs are attractive and beneficial if they are properly implemented, and if the government’s administrative services are provided effectively and efficiently,” he said, stressing that they are primarily for exporters.
Mr. Chanthy said improving economies in export markets like the EU and US were boosting demand for Cambodian products, while labor relations have been improving and political stability has been achieved since the disputed 2013 elections. Demand for Cambodian products was also rising in new importing countries like Japan, while the dispute in the South China Sea could give Cambodian exports an edge over those from Vietnam, Philippines, he added.
Sok Chenda Sophea, secretary-general of the Council for the Development of Cambodia (CDC), said that SEZs will play a key role in job creation and diversification.
“Thanks to SEZs, we were able to first create additional jobs, but most importantly we created jobs not far from the villages workers live in,” he said. SEZs have brought almost 70,000 new jobs to the country, according to an October report from the Asian Development Bank.
One of the problems facing SEZs is that skilled workers are becoming more difficult to find. Instead of being flooded with cheap labor like other labor-intensive production industries, the report said many factories in SEZs are struggling to find workers who can read, write and do basic math.
With a shortage of workers with basic literacy, some factory managers have to send recruiters across the country to locate skilled workers. “They have to go to a lot of trouble to recruit people, especially in the Phnom Penh zone,” said Peter Warr, a professor at Australian National University and one of ADB report’s co-authors. “We have an impression of abundant labor in Cambodia, but it is not of the kinds these firms require,” he said.
Some factories provide voluntary education for workers. Mr. Sophea said a new law on foreign investment and the SEZs being drafted by the CDC will push to make this sort of education mandatory. “It is my intention in both laws to have provisions dealing with the obligation of investors to continue to prioritize training and human resource development,” he said.
Cambodia exported products with a total value of some US$4.5 billion in 2015, increasing 25 percent from $3.6 billion last year, according to figures from the Ministry of Commerce.
From Khmer Times
