Abstract/Summary

This study attempts to examine four aspects relating to the cross border economy of Cambodia:

a)      The overall regulatory regime and evolving trade policy of Cambodia, including participation in international trading arrangements;

b)     Specific policy issues or strategies for development of cross-border trade, including participation in regional trading arrangements, setting up of special zones or provision of special privileges;

c)      Actual conduct and performance constraints of cross border trade arrangements, using illustrative case studies (e.g. garments trade, trade in shoes, vegetables etc.) with both Vietnam and Thailand;

d)     The poverty impact of cross-border economies at the local level.

Findings of the study indicate that: official and unofficial costs of border clearance are rising, especially for small traders; credit default risk has also increased in the face of increasing market competition and lower margins; and personal links and trust have substituted for missing institutions.

Generally, areas along the border with Thailand were found to be much more active and to exhibit much greater impact, e.g. on employment, earnings and poverty, than areas around the Vietnamese border. A drawback of the study is that it did not explore negative or adverse impacts in any systematic manner.