World Bank: Diversification needed to sustain Cambodian economic growth
- From: "Chim" <ChimS1@xxxxxxx>
- Date: 31 Mar 2006 03:32:35 -0800
World Updates
Thursday March 30, 2006
World Bank: Diversification needed to sustain Cambodian economic growth
PHNOM PENH, Cambodia (AP): Despite healthy growth in 2005, Cambodia's
economy gives cause for concern because of its narrow base, the World
Bank said Thursday.
"Cambodia's economy showed unexpected strength in 2005 with initial
estimates of GDP growth at 7 percent,'' said the bank's latest report
on the Asian region's economic development.
The new figure is almost a full point higher than the last projection,
of 6.1 percent, that the bank had made in November for 2005 growth.
The bank said the increased growth was due to a "surging agricultural
sector,'' with crop production -- especially rice -- and fishery yields
significantly higher than in 2004. Expansion of international trade
also was a contributor.
Although last year's growth was "impressive,'' diversifying the economy
is necessary to keep it expanding, Rob Taliercio, a World Bank senior
country economist, said at a news conference discussing the findings.
"The Cambodian agricultural sector seems to be characterized by a boom
and bust cycle,'' he said, noting that growth in the sector was
negative in 2002 and 2004, but positive in 2003 and 2005.
The fluctuation in the agricultural growth rates "creates a lot of
vulnerability for poor people,'' commented Nisha Agrawal, the bank's
country manager, calling for the government to implement a better
irrigation policy and investment program to sustain the sector's
growth.
Garment exports, Cambodia's main dollar earner, grew 10.6 percent last
year to US$2.2 billion (euro1.8 billion) largely because of the
restrictions imposed by the United States and the European Union on
Chinese garment imports, the bank said.
About 71 percent of Cambodian garments were exported to the U.S. and 23
percent to EU markets, it said.
An increase in tourist arrivals and stable fiscal and monetary
performance also boosted growth.
Cambodia received more 1.4 million visitors and produced nearly 6
million tons of rice last year, according to government statistics.
Prime Minister Hun Sen said Wednesday that Cambodia has a surplus of
more than 2 million tons of rice above that needed for domestic
consumption that can be exported.
.
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