The Effects of COVID-19 on the Export Industry and Comparative Advantage of Cambodia
The repercussions of COVID-19 resulted in global disruptions to supply and demand as well as shocks to the global production networks. This paper employs a trade analysis approach to assess the impacts of coronavirus on Cambodia’s export performance. Utilising Revealed Comparative Advantage (RCA) index, changes were analysed using data pre-and post-pandemic to explore the Kingdom’s competitiveness and dynamic export position during this time. We found evidence that COVID-19 has caused a 6 percent decline in Cambodia’s trade in 2020 and a further 7 percent decline in 2021. However, the effect varies significantly across sectors. The decline was as high as 80 percent for travel services and as low as 65 percent for transport services. Several goods, including animals, food products, textiles and clothing, footwear, and minerals, saw a decline in exports during the early stages of the COVID-19 outbreak, but their exports quickly recovered during the later stages. We also observe that exports of vegetables, transportation equipment, plastics and rubber, and certain machinery products were quite resilient to the pandemic, with export values rising in both 2020 and 2021.
Our RCA analysis indicates that the pandemic has contributed to a decline in the export competitiveness of a dozen of the leading trade products, including a few agricultural products and several textile, garment and footwear products. In addition, there is evidence of a gradual increase in competitiveness, particularly for rubber and plastic products, machinery, and electronic equipment, which not only represents the country’s growing participation in regional machinery production networks but also its modest progress in diversifying export commodities.