In a significant stride towards strengthening economic ties, Malaysia has risen to become Cambodia’s 15th largest trade ally, as revealed by data from the General Department of Customs and Excise (GDCE). The bilateral trade between these nations witnessed a remarkable increase of over 35% in January, highlighting a thriving partnership within the ASEAN framework.
The trade volume between Cambodia and Malaysia soared to $46.41 million in the first month of 2024, marking a substantial 35.2% increase from the $34.32 million recorded in January of the previous year. The detailed statistics show Malaysian exports to Cambodia at $35.32 million, up by 25.6%, while Cambodian exports to Malaysia reached $10.49 million, showcasing an impressive 83.1% growth.
Despite this growth, Cambodia’s trade deficit with Malaysia widened to approximately $25.43 million in January, from $22.86 million the same month the previous year. This disparity underscores the varying economic scales and production capacities of the two countries.
Hong Vanak, from the Royal Academy of Cambodia, noted the active trade engagements between the two ASEAN members, highlighting Malaysia’s extensive manufacturing sector, which goes beyond agricultural products to include electronics, machinery, and various consumer goods. He underscored the potential for trade expansion under the umbrella of the Regional Comprehensive Economic Partnership (RCEP), emphasizing the mutual benefits of increased production and demand.
Keo Mom, a prominent figure in Cambodia’s food processing industry, pointed out Malaysia’s vital role as a key regional market. She advocated for Cambodia to leverage this opportunity, especially for exporting agricultural products, aligning with governmental policies aimed at agricultural development.
In a move to further bolster this burgeoning trade relationship, the governors of the National Bank of Cambodia (NBC) and Bank Negara Malaysia (BNM) inked a memorandum of understanding (MoU) in late February. This agreement focuses on fostering financial innovation and improving the efficiency and security of cross-border payments, incorporating QR code-based transactions. This system, allowing for seamless payments between the two countries using local currencies, is expected to facilitate trade and tourism, thus contributing to regional economic prosperity.
The NBC’s report highlighted Malaysia as the 6th largest foreign investor in Cambodia, with investments totalling $1.9 billion, accounting for 4.6% of the total market share. The year 2023 saw bilateral trade between the nations amounting to $632.44 million, a modest increase from the previous year, with Cambodian exports to Malaysia experiencing a slight decrease, while imports saw a growth.
This evolving trade landscape between Cambodia and Malaysia, supported by strategic financial collaborations like the QR MoU, is set to play a pivotal role in enhancing regional economic connectivity and fostering sustainable growth within Southeast Asia.
