OECD: Cambodia’s Logistics System Needs Reform to Increase Competitiveness

• 30 July 2021
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Cambodia’s logistic system in recent years has grown significantly but is still inadequate and limited due to high costs and the complexity of laws and regulations, according to OECD’s recent report which argued that reform is required to increase competitiveness.

The report added that logistics prices in Cambodia are relatively high compared to other ASEAN countries such as Thailand and Vietnam, as well as the average global price.

In 2018, Cambodia ranked 98 out of 160 countries in the Logistics Performance Index (LPI), slipping from 73 in 2016.

Road transport is the main mode of transportation in Cambodia, representing about 90% of cargo moved. Meanwhile, water transport represents only a small proportion, while rail system is still negligible, said the report.

Given these limitations, OECD also recommended that the Cambodian government needs to undertake comprehensive reform programs to increase competitiveness.

The reforms include systematically reviewing existing regulations to ensure their efficiency and effectiveness, and reduce costs for applying for administrative documents for citizens and businesses and deploying information technology and one-stop shops for licenses, other documents and regulatory procedures.

According to the same report, the gross domestic product from the Cambodian transportation and storage sector amounted to US$2.1 billion in 2019 and has been constantly increasing. These two sectors represent 7.8% of the kingdom’s economy.

• Economy and Finance
• Road and Infrastructure