Trade Liberlization Cambodia

Cambodia has worked very hard since the year of 2000 with its development partners, Ministry of Commerce, United National Development (UNDP) and other stakeholder, to better understand the potential impacts of trade reforms on the poor, and to develop mechanisms, which truly support pro-poor growth. Therefore, government studies suggest that economic growth has helped reduce poverty, but that the proportional benefits to the rich have been greater than the benefits to the poor (Royal Government of Cambodia, 2002a). Moreover, Cambodia is one of a least developed country (LDC) where 40% of population still live in poverty situation. Thus, trade priority areas of action need to be reflected in poverty reduction and national development plans and strategies in Cambodia.

Introduction

Cambodia is located in Southeast Asia where has the border with the Gulf of Thailand, Vietnam, Laos, and Thailand. Since Cambodia was transformed from an economics planning to a free-market economy in 1993, the government has promoted the investment from private sectors and encouraged foreign direct investment (FDI) with several institutional and economic reforms. Moreover, Cambodia also participated in Asian Free Trade Area (AFTA) in 1999 and joined the World Trade Organization (WTO) in 2003, which offered substantial potential for its integration with Southeast Asian and globalized economies. Given such development, the economy has been improving with increased foreign trades (Narak Hout & Kakinaka, 2007). Moreover, there are many studies have researched about the linkage between trade and poverty in Cambodia (Lord, 2001; Narak Hout & Kakinaka, 2007; Neak Samsen & Sokha, 2006; Royal Government of Cambodia, 2002a) and the result of trade liberalization was found to reduce poverty.

Furthermore, thee objective of this paper is to investigate the impact of trade liberalization on poverty by taking Cambodian's experience