The Southeast Asia Country Series: Kingdom of Cambodia

In 2018, the Pakistan Business Council (PBC) as part of its initiative to encourage Pakistan’s trade with its non-traditional trading partners has covered ‘6’ Southeast Asia Country Series. This is the last publication of the Southeast Asia Country Profiles which concentrates on the economic prospects of the Kingdom of Cambodia.

The Kingdom of Cambodia has a strategic location in Southeastern Asia and it is bordered by Laos, Thailand and Vietnam. Cambodia is home to a number of tourist sites such as Angkor Wat Temple and Preah Vihear. Around 97% of the total population follows Buddhism and Khmer is the official language of the country. The present Prime Minister is Hun Sen and King Norodom Sihamoni is the head of the state.

Economic Indicators Cambodia Pakistan
GDP (USD Billions) 22.16 304.95
GDP Growth Rate (%) 6.81 5.70
Population (Millions) 16.01 197.02
FDI Net Inflow (USD Billions) 2.78 2.82
Total Exports (USD Billions) 17.21 21.88
Current Account Balance (USD Billions) -1.90 -15.80

Being regarded as a lower-middle income country, Cambodia has emerged as the 6th fastest growing economy in the world and its inward FDI rose to $2.78 billion in 2017. The table shows a brief economic outlook of both Cambodia & Pakistan in 2017. The textile industry of Cambodia has grown to be the major source of foreign exchange earnings. The industry operates in the downstream sector and accounts for 65% of the total exports, which is mostly dominated by product category of HS-61 and HS-62. In 2017, 643 garment factories were registered; employing more than 70% of the total workforce. The largest textile markets for Cambodia were the USA, Germany & UK. As per the Doing Business Index, Cambodia ranked 135th in the world as of 2018.

Cambodia over the years has been facing a constant Balance of Trade deficit; this equaled $0.94 billion in 2017. The major import origins were Thailand, China and Singapore. However, the topmost export destinations were the USA, Germany and the UK. Cambodia mostly imported items such as; gold, knitted fabrics, mineral oils and motor vehicles, while its exports mainly composed of knitted and not knitted apparel, footwear and bicycles. The pie charts represent the breakup of textile exports made by Pakistan & Cambodia during 2017. Trade deficit with China stood at $3.78 billion and on the other hand, trade with India also resulted in a deficit of $72.19 million in 2017. Moreover, Cambodia has signed six trade agreements under ASEAN, which have been implemented.

Cambodia's Bilateral Trade with PakistanThe indicative trade potential between Pakistan & Cambodia for the top 25 products at HS-06 level showed that the actual trade of these products lagged far behind. Pakistan had the potential to export $1.02 billion worth of goods to Cambodia. Similarly, Cambodia’s export potential to Pakistan was $0.59 billion. Trade between the two countries has been in favor of Pakistan, resulting in a trade deficit of $27.52 million for Cambodia. Knitted and not knitted apparel constituted 69% of Cambodia’s exports to Pakistan, while cotton, raw hides and medicaments were the most imported items from Pakistan.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 78) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk

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