Cambodia in the Electronic and Electrical Global Value Chains
This paper maps Cambodia’s participation in Electronic and Electrical (E&E) value chains using trade statistics. It also conducts SWOT analysis based on both qualitative and quantitative data from a E&E firm survey, from which three major conclusions are drawn. This paper argues that E&E production in Cambodia has expanded rapidly with countries in different development levels featuring coordinated and complex production networks. Companies in Cambodia have joined E&E value chains since 2005; yet the scale, scope, and depth of production are so far beyond most comparable countries in East and Southeast Asia. The country’s E&E sector has yet to achieve competitive advantages but recent export trends are promising. Findings from the E&E firm survey support overall private sector perspectives, in that Cambodia is an attractive production location due to its low labour costs, generous investment incentives given by the government to investors, and proximity to vibrant manufacturing hubs. However, these location advantages are offset by structural issues such as high costs and unstable energy supply; low education; an overall lack of labour skills; poor infrastructure and transport systems; and limited capacity of domestic enterprises. The results highlight a greater emphasis on global value chains; seizing the benefits from global value chain (GVC) requires improving connectivity, reduced trade barriers, streamlined customs procedures, an improved investment climate, and investment in education and workforce skills. Building Cambodia’s vibrant E&E sector requires smart and efficient policy interventions from the government to address key structural and production obstacles, as well as the country’s engagement in regional and global trading architecture to maximise the integration in -- and benefit from -- regional E&E production networks.