PHNOM PENH, Nov. 12 (Xinhua) -- Cambodia is accelerating efforts to maximize the benefits of the Regional Comprehensive Economic Partnership (RCEP) and ASEAN as a critical buffer ahead of its scheduled graduation from Least Developed Country (LDC) status in 2029.
Speaking at a high-level policy dialogue in Phnom Penh on Thursday, Permanent Deputy Prime Minister and Minister in charge of the Office of the Council of Ministers Vongsey Vissoth said that while leaving the LDC category marks a historic milestone, it will fundamentally alter the kingdom's trade preferences across global markets.
To maintain economic momentum, Cambodia must maximize regional mega-trade pacts like RCEP while urgently enacting domestic reforms to boost competitiveness, he said.
"It is an achievement, but it will also test our competitiveness," Vissoth said. "Trade preferences will change differently across markets, so preparation cannot wait. We will continue diversifying our partners and deepen cooperation within ASEAN and RCEP."
Above all, the Southeast Asian nation needs to strengthen factors within its control, including the cost of doing business, the capability of local firms, and the effectiveness of its institutions, he added.
Vissoth said market access is important, noting that Cambodia will continue trade dialogues, leverage regional agreements, and diversify its investments.
"But negotiations cannot resolve every constraint facing our producers," he said. "High transport and energy costs, clearance delays, inconsistent requirements, and limited access to suitable inputs can weaken competitiveness even when a market is open."
Domestic reforms must address these bottlenecks, he added, stressing that today's investments must build lasting skills, local suppliers, and productive capacity for the future.
Vissoth said that over the past three decades, Cambodia has benefited from an open trading system, access to major markets, foreign investment, and an abundant workforce.
He added that these conditions helped build export industries, create jobs, and reduce poverty.
"But the basis of competition is changing. Trade and investment decisions are increasingly influenced by geopolitical tensions, protectionism, and supply-chain security," he said. "Automation and artificial intelligence are transforming production, while climate and market standards are becoming more demanding. We must remain open, but compete increasingly through productivity, skills, reliability, and stronger institutions, rather than relying mainly on trade preferences or low labor costs."
Looking ahead, Vissoth noted that the government forecasts economic growth of 4 percent in 2026.
While manufacturing exports have remained resilient, he said the economy faces headwinds from weak household demand, tighter credit conditions, a struggling tourism sector, and declining remittances as Cambodian migrant workers return home. ■
