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Cambodia: Rapid Growth in an Open, Post-conflict Economy

Authors


  • We thank David Greenaway for his interest in this paper and his comments, and Anna Cassandra Melendez for excellent research support. The views expressed are those of the authors alone.

Abstract

This study provides an analytical review of World Trade Organization, Trade Policy Review: Cambodia, the first such report undertaken for the country. The report highlights Cambodia's rapid economic growth after one of the world's worst cases of genocide in the second half of the twentieth century. This growth has been underpinned by open trade and investment policies, in the context of dynamic neighbourhood growth effects. The trade regime is mainly tariff-based, with modest intersectoral variations in rates. Cambodia has limited trade policy space. It is a signatory to the 10-nation ASEAN Free Trade Agreement, soon to become the ASEAN Economic Community. Moreover, given its long and porous borders with the much larger, dynamic economies of Thailand and Vietnam, any major cross-border price differences will quickly result in informal trade with these economies, and nearby China. Most of the country's trade policy challenges are to do with ‘behind–the-border’ issues, a legacy of its generation of civil war and conflict. These include weak bureaucratic capacity, high levels of corruption, poor infrastructure and limited human capital.

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