Cambodia has been part of the Integrated Framework (IF) since 2001, putting in place a Pro-poor trade strategy and one of the first pilot countries to complete a Diagnostic Trade Integration Study (DTIS). The IF helped support Cambodia's engagement and accession to the WTO, building political commitment for reforms, a strong institutional set-up and a full trade needs assessment in order to kick-start the implementation of reforms and trade and development projects on the ground. There has since been an important roll-out of a new business and trade-friendly legal framework.
Description of the projects (objectives and interventions)
Cambodia's EIF Tier 1 Project, "Strengthening Institutional Mechanisms for Formulating, Implementing, Managing and Monitoring Cambodia's Trade Integration Strategy" has been under implementation since May 2010 by the Department of International Cooperation (D/ICO). The Tier 1 Project takes into consideration Cambodia's updated 2007 Diagnostic Trade Integration Study (DTIS), the National Strategic Development Plan (NSDP), the Trade Sector Wide Approach (SWAp) and Trade SWAp pillar roadmap. Its main objective is to enhance Cambodia's national capacity to formulate, implement, manage and monitor a pro-poor trade policy that is consistent with and supportive of the country's NSDP and its Millennium Development Goals (MDGs).
Cambodia's Tier 2 on "Export Diversification and Expansion Program I" (CEDEP I)supporting sectors such as milled rice, high value silk and also in program monitoring was approved by the EIF Board in August 2012 and is under implementation. A 2nd Tier 2 proposal was submitted and is being considered by the EIF ES. It will support export of marine fish products, cassava and the hospitality industry (Royal Academy of Culinary Arts).
Under the Integrated Framework (IF), Cambodia has benefited from two Window II Projects including "Capacity-building for pro-poor trade reform" and "Trade-related assistance for development and equity".
Main progresses to date
Overall, the EIF Tier 1 project has become a program and a platform for better mainstreaming of trade into national development plans through the DTIS Update and contribution to the Government Rectangular Strategy and National Strategic Development Plan 2014-2018. It contributes to the improved coordination and dialogue with Development Partners (DPs) on the country's trade development vision, the Aid for Trade (AfT) mid‑term strategy and the results framework leading to an increase in AfT resources managed under the SWAp. The EIF programme also makes an effective contribution to reinforce the institutional set-up for the Trade SWAp or the NIAs.
The Trade SWAp was launched in 2008 based on the DTIS 2007 and serves as a national trade sector development plan. Various SWAp Pillar Working Groups and an Implementation Committee (IC) were set up and held regular meetings with support from the NIU to support the SWAp implementation both at technical and policy levels. A Trade SWAp Pillar Roadmap was validated in 2012 as a Medium‑term Programme (MTP) and framework for donor coordination as well as a Monitoring & Evaluation (M&E) Framework for the Trade SWAp.
A trade chapter was included in the National Strategic Development Plan III (NSDP III) 2009-2013. Three out of five priorities of the NSDP III are directly linked to trade.
The new DTIS Update, to be fed into the National Strategic Development Plan IV (NSDP IV) 2013‑2018 and Rectangular Strategy (2013-2018), has been prepared.
A trade mainstreaming agenda is developed in 2012 through rolling out an EIF trade mainstreaming module with support from the UNDP. This agenda focuses on integrated trade, competitiveness, sectorial strategies and regional integration. Furthermore, a SWAp communications strategy is developed and under implementation by the NIU.
The Tier 2 project, Cambodia Export Diversification and Expansion Program (CEDEP) Part I: Milled Rice, High Value Silk and Program Monitoring, was approved and has been under implementation since October 2012.
The Tier 2 project on CEDEP II on Fishery, Cassavas, Tourism and M&E is under preparation. The Trade Development Support Program (TDSP), or Multi-Donor Trust Fund for Trade Related Assistance in Cambodia (MDTF TRAC), was extended until 2015. The Asian Development Bank (ADB) took over the role of Donor Facilitator (DF) from UNDP from October 2012.
A Government-Private Sector Forum was established and chaired by the Prime Minister. Under the auspices of the Cambodian Chamber of Commerce, eight thematic working groups were established to facilitate the engagement of the private sector in trade policy related issues.
The Tier 1 project extension for 2 years was approved on July 17, 2013.
The implementation of the Tier 1 Phase 2 will focus on several items. First, strengthening the NIU sustainability and capacities to implement TRTA programmes and to effectively formulate projects for increased economic diversification. Second, maintaining a network of SWAp focal points in line Ministries working as an extended NIU, Third, servicing regular meetings of the SWAp Pillar Working Groups, Implementation Committee. Fourth, mainstreaming of trade in the policy dialogue and formulation and trade awareness‑raising. Fifth, supporting the implementation of Tier 2 projects. Sixth, developing a communications plan and EIF awareness‑raising. Seventh, sharing experience with other LDCs. Finally an M&E of the SWAp and TRTA project will be completed.
Cambodia is continuing to work on its 2nd DTIS update launched in the first quarter of 2013. It is expected that this DTIS be validated by the end of 2013. The elaboration of strategies for sustainability of NIU and Trade SWAp as well as for AfT resources mobilization is a key feature of the updated SWAP Road Maps.
|Outcome 1: Sufficient Institutional and management capacity built in EIF countries to formulate and implement Trade related strategies & implementation plans|
|O1.1 Tier 1 ' Support to NIAs' project completed or under implementation||No||Yes|
|O1.2 EIF Country with complete, up-to-date validated DTIS Action Matrices||Yes||Yes|
|O1.3 Level of capacity of NIU to perform fiduciary programme management for Tier 1 project||4||2|
|O1.4 Country with up-to date trade strategies||Yes||Yes|
|O1.5 Country with quality trade strategy||3||2|
|O1.6 Country with quality trade strategy implemented||4||2|
|Outcome 2: EIF countries mainstream trade into their national development strategies and plans|
|O2.1 Trade in PRSP and/or National development strategies||2||2|
|O2.2 Existence of productive sector strategies integrating the trade dimension||Yes||Yes|
|O2.3 Functioning public/private consultation mechanism||1||1|
|Outcome 3: Coordinated delivery of trade related resources (funding, TA etc.) by donors & implementing agencies to implement country priorities following adoption of DTIS Action Matrix|
|O3.1 Availability of an annual rolling implementation overview integrating all trade-related government & donor-supported activities (including gender & environment)||Yes||Yes|
|O3.2 Frequency of government and donor consultations on trade-related matters||1||1|
|O3.3 UN CEB Cluster activities based on DTIS Matrix priorities in EIF Countries||Yes||Yes|
|O3.4 Country with joint donor initiatives in the trade area (such as need assessment; strategy formulations; programming; pooled funding; M&E; etc.)||Yes||Yes|
|Outcome 4: EIF Countries secure resources in support of initiatives that address DTIS Action Matrix priorities|
|O4.1 Country with implementation plan integrating DTIS/Action Matrix priorities and indicating financing needs to be met through ODA||2||2|
|O4.2 Country where a Government budget exists for implementation of its trade strategy||No||Yes|
|O4.4 Number of projects funded by donors related to the DTIS Action Matrix||1||25|
|O4.4.1 Amount of projects funded by donors related to the DTIS Action Matrix (Million USD)||18.35||14.9|
Computerization of customs operations using ASYCUDA, management of standards to help exporters plus legal and regulatory reforms bringing customs into compliance with WTO obligations have had a significant impact on clearance of containers at the border, cutting the number of days required by over half between 2007 and 2010. This has also reduced the time to export from an average of 37 days in 2007 to 22 days in 2012 and the time to import from an average of 45 days in 2007 to 26 days in 2012 according to the World Bank's Doing Business Survey. Cambodia has since positively advanced 17 places in the "Ease of Doing Business" ranking from 150 in 2007 to 133 in 2013.
With EIF support, the Ministry of Commerce has championed raising awareness on the importance of trade facilitation, which has helped stakeholders including the customs officials, Camcontrol, the port officials and private sector to understand their role in facilitating trade. At the Sihanoukville Autonomous Port, this has led to an increase in productivity from operating 10 containers for each ship per hour to operating 30 containers per hour.
NIA Support (T1 Phase 1 and 2)
Cambodia Export Diversification and Expansion Program (CEDEP) II - Evaluation Component
Cambodia Export Diversification and Expansion Program (CEDEP) I - Silk Component
Cambodia Export Diversification and Expansion Program (CEDEP) I - Rice Component
Cambodia Export Diversification and Expansion Program (CEDEP) I - Evaluation Component
Cambodia Export Diversification and Expansion Program (CEDEP) II - Cassava Component
Cambodia Export Diversification and Expansion Program (CEDEP) II - Marine Fishery Component
Cambodia Export Diversification and Expansion Program (CEDEP) II - Academy of Culinary Arts of Cambodia (ACAC) Component
Cambodia has been using the EIF programme to take advantage of trade opportunities following WTO accession, including building a strong political commitment for inclusive reforms and a new business and trade-friendly legal framework. The EIF has been supporting programmes in Cambodia that essentially target the well-being not only of businesses but that also impact on grassroots population, particularly women.
Now with plans to graduate from the Least Developed Country (LDC) status, Cambodia is taking a more inclusive and sustainable approach supporting a vibrant entrepreneurial industry and a dynamic private sector. The EIF has been instrumental in creating the right backdrop for partners' support for Aid for Trade and in developing sectors, such as silk, that are supportive of women's economic empowerment.
In Cambodia, silk weaving is often regarded as a parallel activity to farming, which allows women to generate additional income and brings about positive social impacts by helping to stem migration flows and keeping the family unit intact. Silk is also an important source of employment, with the number of weavers estimated to be between 18,000 and 20,000, of which 98% are women. Women also make up two-thirds of Cambodia's silk workforce. Together with ITC as the main implementing partner, the EIF has supported the move towards producing handmade high‑value silk benefitting poor women in rural areas, most of whom depend on silk production for their livelihood.
Through assisting 1,500 weavers and backing 14 women‑owned businesses in five export markets, the high‑value silk project has served the broader aim of empowering girls and women with cutting‑edge skills in silk production. As a result, the weavers' average monthly income from silk weaving increased by 100% from 2012 to 2014. The 14 women‑owned businesses created 88 new jobs, developed 127 new silk designs and increased exports of Cambodian silk products by 73% since 2012. The growth in exports resulted from the acquisition of new clients and new export markets, the adoption of fair trade practices as well as increased sales to traditional markets.
The 14 companies have received coaching and advisory services to further develop local sales channels targeting tourists, including in showrooms, hotels, restaurants, airports and shops. They have also gained considerable experience and knowledge in product design, strategic export planning, customer relations management, handling of orders and planning and managing trade fairs. Through mentorship, brand identity and product development, the companies have also upgraded their showrooms and shops, established new relationships with international buyers and prepared new product collections and catalogues.
Training courses on contemporary fashion trends, design and product development have been provided to more than 40 representatives – of which 36 were women from 20 Cambodian silk companies.
The EIF‑funded project has also helped secure markets for Cambodian silk products and has facilitated the participation of representatives from silk companies in nine trade fairs and several business study tours. This international exposure has helped Cambodian entrepreneurs to upgrade their export strategies, which have contributed to increased sales and access to new buyers in the global market. Profits of the 14 companies grew gradually from US$633,933 in 2012 to US$1,103,908 in 2015, and the profit margin of total sales increased from 46% in 2012 to 58% in 2015.
Partnerships have been central in sustaining the impacts realized in the EIF high-value silk project. Strong cooperation has been established with associations, such as the Khmer Silk Villages, to develop the organizational capacity of handling exports. Innovative approaches are being planned to facilitate marketing silk to tourists during visits to weaving communities, such as those organized by Artisans d'Angkor, as well as embarking on e-commerce. The increase in know-how and the experience of the Cambodian companies and their commitment to continue exhibiting a wide range of silk products in the trade shows reflect the longer‑term impact in strengthening Cambodia's silk sector.
Networks of silk producers and weavers have been expanded through village study tours, and silk policy support has been provided through the Silk Sector Development and Promotion Commission to ensure that the silk sector contributes to poverty reduction and women's economic empowerment. In collaboration with ITC and the Cambodia Women Entrepreneurs Association, the Cambodia National Silk Strategy has been launched, with the aim of revitalizing sericulture (the farming of silk worms) and developing a modern, inclusive and sustainable Cambodian silk sector.
Empowering women entrepreneurs in the move towards producing high-end silk is a story of Cambodia's resilience to discriminative social norms. The country is building on its heritage and resources moving beyond a legacy of poverty to bring know-how to rural areas, helping to stem migration flows to urban areas in search of better prospects, which has resulted in indecent work, social vulnerability and ultimately social instability. Working to inclusively overcome hurdles in development has meant facilitating a dynamic inclusive private sector to leverage resources for entrepreneurial and economic growth. Fostering women's confidence and entrepreneurship has paved the way to realizing the silk export dreams in Cambodia, as it embarks on the last mile to graduation and its journey in meeting the Sustainable Development Goals.
"I am very happy that my technical skills have improved and I can find new clients. My income has significantly increased and almost doubled from around US$100 in 2012 to US$188 in 2015, thanks to orders from Craft Village, which was introduced by EIF CEDEP I, high‑value silk during a weaver tour." Ms Ros Sarith, Silk Weaver
By Ratnakar Adhikari and Pan Sorasak*
This past summer, the World Bank officially upgraded Cambodia to a "lower‑middle‑income country", a move that confirms the country's upwards economic trajectory over the past 20 years.
But despite this new status, which Cambodia shares with 51 other economies, including India, Vietnam and the Philippines, the country is still mostly associated with darker images: landmines, civil war and the Khmer Rouge regime. At best, perhaps, it’s seen as a new frontier destination for investment and tourism.
For development economists, though, this reclassification comes as no surprise: Cambodia’s economic development has earned it the title "olympian of growth" in some quarters, thanks to sustained double-digit growth between the years 1998 and 2015 (with the exception of 2009 and 2010, following the international financial crisis).
This rise is impressive not only for its rate but also for its resilience. The country has been growing at a stable rate over time, making it the world's sixth-fastest‑growing economy. While some would argue that "it started at a low level, so it's normal", the uniqueness of Cambodia's growth lies in its continuity over 20 years. Since 1950, only 13 economies in the world have grown at a rate above 7% per year for a quarter of a century or longer, and Cambodia is not an oil‑producing country. Its growth has been mostly driven by trade and by a buoyant demand for labour‑intensive manufactures (textiles and clothing), a booming tourism industry, growth in construction and, to a lesser extent, an increase in agricultural exports. New opportunities within the South-East Asian region have also emerged, fuelled by deeper integration in the ASEAN economic bloc.
GDP per capita has increased, inflation has been kept lower than 5% and the poverty rate has declined from 53% in 2004 to 16% in 2013. Yet there’s a long way to go before Cambodia achieves its vision of becoming an upper‑middle‑income nation and meeting all the United Nations' Sustainable Development Goals by 2030 and turning into a developed country by 2050.
For this to happen, Cambodia will need to accelerate growth, diversify its relatively narrow economic base and enter regional and global supply chains. Only then will it satisfy the United Nations' triple criteria for the graduation of the Least Developed Countries (income, human assets and economic vulnerability) and join the only four countries that have managed to graduate so far: Botswana, Cabo Verde, Maldives and Samoa.
Cambodia has benefited from the strong support of development partners, both bilateral and multilateral, in jump‑starting its weak economy in the mid‑90s with the result that it is now widely perceived to be aid‑dependent. Total aid, including disbursements to NGOs, amounted to around US$12,108 billion between 1992 and 2011 in supporting sectors, such as governance, agriculture, environment, education, healthcare, energy and transport.
While the development community has been generous with Cambodia, it has also closely monitored the use of aid resources. This has meant for the Royal Government of Cambodia to adapt, initially unguided, to multiple rules, expectations and governance aspirations, always ensuring that resources flow to the most important and promising sectors.
A new trade route
Trade has been a big recipient of development support for the role it plays in achieving sustained growth and economic development. Cambodia has benefited from preferential market access offered by its main trading partners, such as China, the European Union, Japan, the US and the ASEAN partners, but also from a steady and strong partnership with the Enhanced Integrated Framework (EIF), the only Aid for Trade programme exclusively dedicated to the Least Developed Countries (LDCs).
Since 2001, the EIF has been a close companion on Cambodia's journey towards economic growth and poverty reduction through trade. It has contributed to build the national capacity to design and manage Aid for Trade programmes, notably through the establishment of the sector-wide Approach on Trade, a key mechanism for coordination among the Royal Government of Cambodia and development partners and for channeling Aid for Trade resources. It has also sponsored several far‑reaching trade diagnostics and helped Cambodia to diversify its economy and to move up the value chains in high export potential sectors, such as high‑value silk, milled rice, marine fish products and cassava products, as well as in the hospitality industry.
Graduation from LDC status can be a double-edged sword for a country, for it entails the loss of preferential market access and a possible reduction of development aid. Like for the other recently graduated countries, the EIF will help Cambodia to ensure a smooth graduation, supporting the preparation and continuing its assistance for five years afterwards.
In the long run, the success of the Cambodian economy will be driven by the nation's entrepreneurs and the private sector and not by more international assistance, as reliance on aid is neither sustainable nor desirable in the long term. The recent reforms aimed at reducing the cost of trade, increasing competitiveness and implementing an industrial development policy are to be considered steps in the right direction.
For its vision to be realized, the Cambodian government is conscious that far‑reaching reforms are needed in order to make economic growth work for all. Only then can the perception of Cambodia change for good.
* Ratnakar Adhikari is the Executive Director of the Enhanced Integrated Framework. H.E. Pan Sorasak is Minister of Commerce of the Royal Kingdom of Cambodia. This blog was originally posted on the Word Economic Forum Agenda on the opening day of the World Economic Forum Mekong summit in Hanoi .
Geneva, 28 September 2016
A strong all-female panel engaged in lively discussions on how to enhance women's economic empowerment through trade and how to bring women's work from the margins to the mainstream in an event organized by the Enhanced Integrated Framework (EIF) at the WTO Public Forum.
Opening the session and setting the stage for the discussions, Mr Ratnakar Adhikari, the Executive Director of the Executive Secretariat for the EIF, highlighted some of the many challenges that women face while trading and elaborated on the meaning of women's empowerment as reflected in the recently published Report of the UN Secretary-General's High‑Level Panel on Women's Economic Empowerment entitled "Leave No One behind: A call to action for gender equality and women's economic empowerment".
"Expanding women's economic opportunities is central to the 2030 Agenda for Sustainable Development. For far too long, women have not been recognized as major economic actors," Mr Adhikari said, adding that "in most of the Least Developed Countries (LDCs), they have been excluded from taking advantage of the vast economic opportunities, of seizing the chance to support themselves through work enterprises and from shaping and controlling their own future and having their own voice."
Taking over the session, the moderator, H.E. Mrs Yvette Stevens, Ambassador and Permanent Representative of the Republic of Sierra Leone in Geneva, also highlighted the challenges that women face in the LDCs and invited the panel to tackle and address the challenges and look into ways to accelerate progress and to mobilize the global community to expand women's economic opportunities. "Today, we will see how the EIF programme – a programme dedicated to building trade‑related capacity in all of the LDCs – is aiming at expanding women's economic opportunities in the LDCs in a bid to achieve inclusive trade," she said.
H.E. Ms Aya Thiam Diallo, Ambassador and Permanent Representative of Mali in Geneva, made a presentation on behalf of Ms Coulibaly Aïssata Touré, a mango exporter and manager of the Société de Valorisation des Fruits (SOVAFY) and President of the Network of Women Economic Operators (RFOE) of Mali. H.E. Ms Diallo highlighted that women in West Africa were now active in the trade and processing sectors through support received from capacity building and training, which were vital elements for enhancing women's skills. "Through the support of the EIF programme, women in Cooperatives have been equipped with skills, processing mangoes into mango jam that is now exported to Europe and the United States of America," she said while displaying a pot of mango jam. "Now it is important to ensure that the results achieved will produce long-term lasting impact and that the revenue is being sustained. In this respect, public-private partnerships foster this principle," she concluded.
Mrs SENG Takakneary, the Founder of SentosaSilk and the President of the Cambodian Women Entrepreneurs Association, spoke on behalf of the 14 women-owned businesses supported by the EIF working with weavers in rural areas, of which 86% are women, to improve their technical and marketing skills. "Because of the project, SentoSaSilk expanded the number of contracted weavers from 9 in 2012 to 20 in 2015. Two weavers entered formal contracts to deliver exclusive designs to SentoSaSilk. The company plans to have formal contracts with more weavers to ensure consistent supplies, while providing more confidence to contracted weavers."
On the other hand, Ms Kuvien Para, a Co-owner and Manager of the Dolphin View Beach business in Solomon Islands and one of the three local female tourism operators receiving EIF support, highlighted how the grant had benefitted her community. "Tourism plays a vital role in the lives of the people of the Solomon Islands. With the support of the EIF, we could make improvements to our small facility, which prompted an increase in room occupancy at the Dolphin View Beach from only two to seven per week. This helps to employ more women in the resort as well as purchase more food crops from women engaged in subsistence farming," Ms Para said, also calling on additional support to improve marketing and investment opportunities of the tourism sector.
Representing Ms Louise Kayonga, Secretary of the Women's Cooperative Twagure Amarembo, Mr Edouard Bizumuremyi from the Permanent Mission of the Republic of Rwanda in Geneva, highlighted the EIF support to the national cross-border trade strategy. "In Rwanda, gender equality is woven into the national trade and development vision of the country. However, some challenges persist, notably the harassment indulged in informal cross‑border trade, the lack of warehouses and the lack of business skills," he said.
On the development partners' side, H.E. Ms Terhi Hakala, Ambassador and Permanent Representative of Finland in Geneva, highlighted how gender equality made economic sense, adding that the "EIF as a global partnership is uniquely placed to empower women in the poorest countries".
H.E. Ms Elsbeth Akkerman, Deputy Permanent Representative of the Kingdom of the Netherlands in Geneva, highlighted how gender equality helped to make countries more stable. Ms Susan Barton, Senior Trade Policy Adviser, Department for International Trade, United Kingdom, added that there was an incentive to empower women, since this led to growth and had been identified in different sectors of the analytical studies. However, she also noted the need for gender-disaggregated data.
On the International Partner Agencies side, Ms Arancha González, Executive Director of the International Trade Centre, said, "The EIF is good, because it is focused, it is effective and it is catalytic. Our projects funded through the EIF in Benin, Lesotho and Nepal help women to overcome specific constraints." Mr Paul Brenton, Lead Economist of the World Bank, highlighted how the World Bank had incorporated the gender component in the key analytical studies that they had undertaken, for instance in Mauritania and Zambia.
Summing up the discussions, Ambassador Stevens noted how the session had demonstrated the ways in which the EIF was supporting women's economic empowerment, in enhancing women's capacity to trade and creating equal opportunities, as well as by providing a level playing field for both men and women. "We have seen that women's economic empowerment is possible if governments take the lead by implementing gender-conducive policies to promote inclusive growth and women's economic empowerment, for instance in Rwanda. And that focusing on successful sectoral examples and good practice also provides a promising path to lift women out of poverty, such as the example of Mali," she said, adding that, "from the presentations, it is evident that the business sector can lead by changing the business culture and practices, especially through the promotion and visibility of women‑owned enterprises. This has been highlighted in the Cambodian presentation."
"Platforms such as the EIF, Development Partners and International Organizations can play a critical role in supporting reforms and investments, as is the case of the eco-tourism grants provided to female tourism operators in the Solomon Islands," Ambassador Stevens said, concluding that the gender collective voice was critical, especially from women's groups to advocate, represent and hold decision-makers accountable. "Each of our voices today can be a driver of change in achieving women's economic empowerment," she said.
Cambodia: Silk Road to poverty reduction
Weaving and wearing silk are strong expressions of the deeply rooted cultural and social traditions of Cambodia. Renowned for producing high‑quality silk, often branded as "Golden Silk" by international reviews, Cambodia's silk‑road drive to poverty reduction has been supported by the Enhanced Integrated Framework (EIF) Programme with implementation support from the International Trade Centre (ITC).
The silk industry was identified in the 2001 and 2007 Diagnostic Trade Integration Studies by the Government of Cambodia as a strategic sector to contribute to poverty reduction through job creation, particularly for rural communities, through earlier EIF programme support. In Cambodia, farmers and producers living in rural areas make up 85% of its population, and in the silk-weaving industry, women make up the vast majority of the 20,000-strong workforce.
The EIF has helped to bring about a stronger institutional and policy framework on trade in Cambodia at the same time as supporting agricultural sectors to promote trade with equity. Already between 2003 and 2007, under the earlier EIF programme – the Integrated Framework (IF) – support was provided to develop silk as a viable sector providing a pathway to higher standards of living for many poor rural silk weavers, and in particular, for women. Earlier ITC and IF support together with the New Zealand Aid Programme, Switzerland and UNDP helped set up 30 weaving groups in 21 villages across 11 communes, 5 districts and 3 provinces. Additionally, with the support, silk yarn production increased from 2 kg per year to 4 kg per month, and weavers’ income increased by 39% and silk products by 43% per month.
Building on earlier IF backing, the EIF is now helping to organize the sector through a Silk Sector Strategy and Action Plan with a National Silk Board that brings together public and private sector stakeholders to help in delivery. Together with ITC as the main partner, the high‑value silk project is backing increases in the sales of handmade high-end silk, which benefits poor women in rural areas, for most of whom livelihood depend on production. One of the targets is to increase silk weavers’ income by 200%, which will deliver significant development benefits.
Through supporting 1,500 weavers and backing 14 exporters in up to five markets, the high‑value silk project serves the broader aim of empowering girls and women with cutting-edge skills in silk production. The 14 silk‑exporting companies are women-owned businesses working with silk weavers in rural areas. These companies have gained considerable experience and knowledge in product design, strategic export planning, customer relations management, handling of orders and planning and managing trade fairs. They have also upgraded their showrooms and shops, developed new relationships with international buyers and prepared new product collections and catalogues.
With project backing, the Cambodian silk companies have participated in nine trade fairs and have so far made contacts with 100 prospective buyers in Europe, 130 in the United States of America and 100 in Japan. Four companies have been able to increase their sales by 40% to 50% amounting to US$142,000 at the end of the fairs. Likewise, during the Ambiante Fairs in February 2014, four companies received orders amounting to US$110,000 from 30 new and potential buyers – of which several placed orders on the spot – and initiated partnerships with leading European Fairtrade wholesalers. During the trade fairs in August 2014 in New York, seven companies received orders for the amount of US$14,209.
Individual companies such as VillageWorks, a women-owned Fairtrade handicraft company registered with the World Fair Trade Organization, has now developed a three-year company export plan, improved its marketing skills, created a brand identity and increased product sales. Moreover, their sales have increased by 40% and the number of buyers by 85% since their participation in the project.
The EIF programme with ITC is continuing to support Cambodia to keep its silk heritage in the spotlight. To ensure sustainability, the EIF‑funded project provides trade opportunities from the grassroots up – from the village-based silk weavers to Government line ministries involved in the silk industry to the silk business sector serving the international market.
Through improving technical skills of rural weaving communities, enabling weavers and exporters to develop new products and designs that meet buyer requirements as well as helping them to establish new marketing channels, the project contributes to the economic empowerment of women whilst helping to preserve Cambodia's rich cultural heritage. Now new product lines, such as silk scarves, fashionable accessories and trends, as well as lifestyle and home decoration products, are on the market (see the 2013 and the 2014 Cambodian Silk Artisans Catalogues). With increased profits from the project, additional income received by the silk weavers has been invested in their families' welfare, children's education, and training and development of small social businesses.
In today's globalized world, silk products are ageless, and their popularity on the international market and in the fashion industry is unlikely to diminish. Giving value to Cambodia's traditional ancestral weaving legacy provides for both cultural and economic growth of the country. Now with Aid for Trade and the EIF's ongoing support backed by a deeper partner engagement, women's prospects are likely to rise higher with greater productivity in silk. Women's self-confidence in weaving techniques and products has also increased through community building and rural engagement, which has meant bigger returns to the silk‑weaving rural communities and to the people of Cambodia.
Cambodia: Prime Minister launches first EIF 3rd generation trade study
On 18 February 2014, His Excellency, Prime Minister Hun Sen launched the update to Cambodia’s Diagnostic Trade Integration Study (DTIS), referred to as Cambodia Trade Integration Strategy 2014-2018 (CTIS 2014-2018). The Strategy aims at assisting the country to effectively integrate into the global trading system and to use trade as the main engine of economic development.
The CTIS 2014-2018 is Cambodia’s third generation of DTIS and provides robust recommendations to ensure that Cambodia integrates in the ASEAN economic bloc and fully benefits from the ASEAN Economic Community (AEC). It captures key areas for reform and progress to support the development of Cambodia’s trade sector with recommendations in the areas of trade competitiveness, regional integration, bridging skill-gaps in technical vocational education and training. It also highlights recommendations in mainstreaming trade into the National Strategic Development Plan IV (NSDP IV) and the Rectangular Strategy III in the next five years.
In his keynote address, the Prime Minister said Cambodia regards trade as a priority sector since it is instrumental in promoting economic growth. He noted that Cambodia’s export of goods and services increased by more than twofold in the last seven years from US$4.5 billion in 2007 to US$9.4 billion in 2013. He attributed the growth of the economy to the increase and improvement in the export base, foreign direct investment, diversification of manufacturing activities and the enhancement of the tourism sector, among others. On this basis, he emphasized the need for trade integration to create a well-organized system to broaden the base of the country’s economy.
"This integration strategy will sharpen Cambodia's ability to contribute to ASEAN community 2015," H.E. Mr Hun Sen said. "It will help enhance the outcome of trade development and reflects the firm and unwavering commitment of the Government to achieving the socio-economic development vision."
H.E. Mr Sun Chanthol, Minister of Commerce, said that the aim of the third strategy was to identify where the country's export sector stood at present and what was needed to go forward and enhance trade sector competitiveness, create new and better jobs, increase incomes and reduce poverty.
"The strategy will help us mobilize donors' technical assistance to focus on priority issues," H.E. Mr Chanthol said. "This updated strategy will provide our Government with useful insights and ideas on how we want to move forward in implementing some of our needed reforms, particularly in the trade area in the coming years."
The third CTIS was approved by the EIF Board on 23 January 2013 with a total funding provision of US$199,983. The study is a reflection of the progress that Cambodia has made in building up capacity and trade development as well as trade integration, with the study being led by the Cambodian Government. It also reflects the Government’s capacity to elaborate a clear Trade Sector Wide Approach (SWAp) Roadmap and in shaping the country’s vision towards regional integration, economic diversification and skills development.
In his address, the Executive Director of the Executive Secretariat for the EIF, Mr Ratnakar Adhikari, while referring to the CTIS 2014-2018, noted that work was still needed to harness the true potential of Cambodia as a trading nation. He mentioned that EIF funding was catalytic to enable a country to leverage more resources from development partners and from the Government, and for the Government to handle issues in a holistic manner and sustain results achieved.
“The CTIS is supposed to be a living reference document for in-country trade development support,” Mr Adhikari noted. “We strongly encourage the country to periodically take stock of the implementation and review progress made. We also call upon all partners to use the CTIS as the entry point for Aid for Trade and in-country trade-related assistance.”
The CTIS 2014-2018 was developed and adopted by the Government of Cambodia through funding support from the EIF and technical support from the Asian Development Bank, UNDP and the World Bank. The Study forms part of Cambodia’s Tier 1 project supporting trade institutional foundations in Cambodia since 29 September 2009.
Cambodia: Growing results with milled rice
The EIF in Cambodia is working to deliver pro-poor change on the ground and leverage additional finance for high-impact poverty reduction projects through a nationally owned Trade Sector-Wide Approach (SWAp). The Trade SWAp is a tool used for trade mainstreaming as well as an effective mechanism available to donors for aid delivery. Through the EIF Tier 1 project, projects supporting trade facilitation, tourism and the export of milled rice and high-value silk, as well as cassava and fisheries are being implemented.
Speaking at the launch of Cambodia’s Diagnostic Trade Integration Study Update (DTIS Update) on 18 February 2014, the Executive Director of the Executive Secretariat for the EIF, Mr Ratnakar Adhikari made reference to the two approved Tier 2 projects with a total funding close to US$5.7 million. “These Tier 2 projects aim at supporting five out of ten prioritized sectors in the Trade SWAp Roadmap, which include: high value silk, milled rice, cassava, marine fishery products and tourism,” he said. “The high value silk and rice project called CEDEP I has yielded concrete results in bringing Cambodian silk and rice brands to international markets within one year of its implementation.”
The Cambodia Export Diversification and Expansion Programme I (CEDEP I) is the first Tier 2 project in Cambodia, aiming to strengthen and expand the exports in key sectors including, milled rice and high value silk. CEDEP I also supports hands-on participation of government staff through enhancing their skills in Monitoring and Evaluation. This project supports the Government’s Rice Policy adopted in July 2010 to move up the value chain from paddy rice to high-value milled rice with a target of 1 million metric tonnes (MT) of milled rice exports by 2015.
To advance the Government’s ambition to have 1 million MT of milled rice for export by 2015, the EIF is supporting the rice sector to be more competitive in the global market, with assistance from other development partners such as the European Union, the International Finance Corporation (IFC) and the Agence Française de Développement (AFD). This includes diversifying exports and adding value to paddy rice, which would in turn lead to bigger profits for everyone along the rice chain – and a boost for rice farmers.
An important step was setting up the Federation of Cambodian Rice Exporters in June 2012, alongside a growing focus on strengthening the Government-private sector dialogue with greater market opportunities opening up for rice millers by adopting SPS standards. At the same time, partnering with civil society organizations such as Cambodia Agricultural Development and Research Centre (CEDAC) to mobilize communities has been vital going forward to help link up the sector from fields to ports.
As of 2013, with support from various development partners, the Cambodian rice export industry grew rapidly raising expectations around achieving the Government’s objective of exporting 1 million MT of milled rice by 2015. The increase in rice exports supports the CEDEP I project objective to increase exports of milled rice by 100% from the 2011 baseline volume of approximately 140,000 MT. In 2013, the EIF rice project directly facilitated 44,671 MT of rice exports, which adds up to US$30,520,768 of rice exports, and the export of fragrant rice accounted for more than half of the facilitated exports, higher than the national average.
In growing results in the rice sector, quality has also been fundamental with milling machines taking paddy rice to the next level, increasing profits for farmers and producers. A Rice Production and Milled Rice Export Policy is in place to support the value chain process. Cambodian rice now complies with international quality standards; with major rice export markets including the European Union, Malaysia, Russia and the United States of America.
As a result, Cambodian rice has been showcased in many different international fora. On 19 November 2014 at the Sixth World Rice Conference in Phnom Penh, Cambodia was named as the country with the World's Best Rice for 2014 along with Thailand. This is an accolade that Cambodia has received for the past three years. Previously, during the global rice tasting competition in 2013, Cambodian Premium Fragrant Rice was awarded the ‘World’s Best Rice’ Award at the World Rice Conference (WRC), for the second straight year in a row. The EIF project provided technical support and facilitation to 43 rice exporters from 26 exporting companies to attend the WRC, which was organized by The Rice Trader (TRT) in Hong Kong, China, from 19 to 21 November 2013. These awards have attracted significant media coverage, and in return, the backing of the Cambodian Government to the rice project initiative taken forward by the programme supported by the EU, the EIF and the IFC. Likewise, in 2012, Cambodian Premium Jasmine Rice ‘Phka Malis’ was awarded the ‘World’s Best Rice’ title and was showcased at the Fourth Global Review of Aid for Trade at the WTO in July 2013.
In Cambodia, there are 2.8 million hectares of cultivated land out of which 84% (2.4 million hectares) is used for rice farming, with the rice sector employing over 2.9 million people. The EIF rice project implemented by IFC looks at addressing the existing challenges in the rice sector and supporting the private sector to meet the Government’s target, identifying new major export markets, and in securing export contracts with premium prices for quality rice.
Trading Stories, the Book, accompanies the film series to show just how trade is about acting local to go global in eight of the poorest countries worldwide.
Trading Stories, the Book, accompanies the film series to show just how trade is about acting local to go global in eight of the poorest countries worldwide. It’s a journey that tracks how, with the support of the Enhanced Integrated Framework (EIF) and Aid for Trade, realities are changing on the ground. Stronger trade roadmaps are being developed, partners are coming together to build the trade agenda and projects to overcome trade barriers are being rolled out. Now, it’s over to you to share the stories, get engaged in the debate and be part of the next chapter that’s still to be written on our global trade connections.
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Written by Elena Immambocus and Justine Namara
Photographs © Elena Immambocus and Justine Namara