CamEd Open Access Repository

Nick Beresford
United Nations Development Programme, Cambodia

International Research Symposium
2021, pp. 3 – 13

DOI:  https://doi.org/10.62458/CamEd/OAR/Symposium/2021/3-13

INTRODUCTION

COVID-19 has taken immense tolls on societies and economies around the world, including through dramatic global impacts on trade, production and other economic activities. The World Bank, International Monetary Fund, Asian Development Bank and United Nations system have all estimated the high costs of COVID-19, but mainly at the regional level, such as for ASEAN (the Association of Southeast Asian Nations). The UN Secretary General Report in April estimated a regional contraction of —0.1 percent in gross domestic product (GDP) for 2020 in South-East Asia, contrasting to the predicted 4.5 percent growth before the pandemic. UNDP Cambodia has undertaken a costing of socioeconomic  impacts specific to Cambodia.

Crucially, the crisis operates through both demand and supply channels. Cambodia is highly exposed as it relies on a narrow cconomic base built from garments, tourism, agriculture and construction. It has a highly open economy, where exports and imports are around 62 percent and 63 percent of GDP, respecively. Foreign direct investment is 11 percent of GDP. On the supply side, Cambodia is highly reliant on China for raw materials for its garment industry and as a source of tourists. On the demand side, China is an important export destination for agricultural products. Capital inflows from China are key to sectors such as construction. Cambodia’s higher value-added exports go mainly to Europe. COVID-19 effects will exacerbate the pre-existing loss of trade preferences from the partial suspension of the European Union’s Everything But Arms programme, starting in August 2020.

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