Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.
World Bank wants Ďtask forceí to fix Cambodia logisticsFriday, September 05, 2014 > 10:17:32
(Journal of Commerce)
Weak logistics have stood in the way of Cambodia’s trade progress for years with its export costs at least 30 percent higher than those of Southeast Asian neighbours Thailand and Vietnam.
Getting the goods from farmers to markets remains difficult, and exporters struggle to supply overseas companies, integrate into regional networks and link with ASEAN partners, according to a World Bank report.
But Cambodia is making progress as it streamlines customs and transit procedures, rising 46 places in the World Bank’s Logistics Performance Index between 2010 and 2014. To continue these positive efforts, World Bank experts said this week that the government should establish a logistics task force to study and improve Cambodia’s logistics business and beef up the transportation network.
“It’s really important to have a dedicated group of people that is representing all these various stakeholders that can look at logistics from a holistic perspective,” Ruth Banomyong, international logistics expert for the World Bank, told a workshop in Phnom Penh.
Ruth said Malaysia and Indonesia had both established — to great effect — bodies specifically to tackle the issue of logistics, according to The Cambodia Daily.
“Because currently, what you have [in Cambodia] is always people complaining, but you don’t have real facts. When you have the real facts, then you can see how to move forward,” he said.
The aim of the task force, comprising experts from both the private and public sectors, would be to identify logistical impediments to the flow of goods and services throughout the country.
To streamline the export process, the World Bank has worked with the Royal Government of Cambodia to identify and categorize over 120 laws, royal decrees, sub-decrees, and regulations containing formal non-tariff measures, including import/export-related permits, licenses and approvals, the World Bank said in its report.
This has been paying dividends, with customs clearance now taking an average of 1.4 days, down from almost six days four years ago. That is still a lengthy delay by international standards but a massive improvement for Cambodia.
Other measures implemented are the elimination of procedures for issuing and applying Certificates of Origin (COs) when unnecessary and, when needed, simplification of such procedures through an automated system. The automated customs solution has been rolled out in 21 border checkpoints.
But of equally critical importance to Cambodia’s trade is the upgrading of its seaport. Despite being Cambodia’s primary gateway, Sihanoukville Port in Preah Sihanouk province has a draft that restricts larger ships from calling. That cuts down on the economies of scale and increases the cost of transporting goods through the port.
“Cambodia sits in a dynamic region, sandwiched between the economies of Thailand and Vietnam, and its best hope for improving livelihoods is to integrate further into the dynamic ASEAN region,” the World Bank report said.
Enrique Aldaz-Carroll, senior country economist at the World Bank, said at the workshop that the cost of transporting rice on rural roads was another area in which improved logistics was much needed, according to The Cambodia Daily.
The cost of transporting rice ranges from $10 to $13 per ton per 100 km, compared to $5 in Vietnam and $7 in Thailand.