On May 31, 2023, monks walk near the central market in Phnom Penh. PhOTO AFP PHNOM PENH - Two decades after its inclusion on the list of the least developed nations, Cambodia met the graduation criteria for the first time in 2021, with plans to graduate as early as 2027.
This is a major achievement, as graduation from the least developed country status means that a country has achieved significant economic and social development goals, the report said.
The least developed country graduation also presents challenges, the report said, adding that graduation means the loss of preferential trade benefits, including duty-free status and favorable rules of origin. The report found that Cambodia is one of the few least developed countries that has significantly increased its exports to the European Union via preferential treatment and lenient rules of origin, allowing its products to enter Europe duty-free.
If not carefully managed, the loss of these preferences may hurt Cambodia's export performance, the report said. Cambodia must work to ensure that alternative market access is available after graduation and enhance its competitiveness. The report said Cambodia has benefitted from multilateral and bilateral free trade agreements such as the regional Comprehensive Economic Partnership RCEP, the Cambodia-China FTA, and the Cambodia-South Korea FTA.
In addition, the Southeast Asian nation must consider forging new trade agreements with its major partners while improving the implementation and use of existing ones, he said.
China's huge market for Cambodia is huge for other ASEAN nations, he said.
Cambodia's Minister of Commerce's Undersecretary of State and Secretary of State Penn Sovicheat said the RCEP, together with other bilateral FTAs, has not only given a boost to the country's sustainable trade growth but also become a magnet to attract more foreign direct investments.
This RCEP agreement will help Cambodia graduate from its least developed country status, likely by 2028, and to achieve its goals of becoming an upper-middle income country by 2050 and a high-income nation by 2050, Xinhua said.