November 14, 2017
On November 14, the Japan International Cooperation Agency (JICA) signed a Record of Discussions with the Royal Government of Cambodia (RGC) for the Project for Improving the Logistics System of Cambodia, a technical cooperation project.
The RGC aims at transforming the industrial structure by attracting and promoting advanced industry, though inefficiencies in the logistics system of Cambodia are a major hurdle in doing so. The project will contribute to improvements in the costs, stability and reliability of the logistics system through formulation and implementation of the Logistics Master Plan.
Located in the heart of the Greater Mekong Sub-region, Cambodia is achieving steady economic growth through horizontal industrial specialization with neighboring countries taking advantage of their geographical potential and diligent labor forces with comparatively low wages. As the global supply chain expands, the RGC has been developing transportation infrastructure, such as the Southern Economic Corridor* and Sihanoukville Port, which will strengthen connectivity for the sub-region. However, the quality and costs of logistics services fall short of international standards and remain challenges due to delays in modernization and optimization.
In March 2015, the RGC formulated the Industrial Development Policy (IDP) 2015–2025 toward further economic growth, and set the goal of transforming and modernizing the industrial structure from the labor-intensive industry that supports the current economic growth to a skill-based industry by 2025. In order to attract and promote foreign private investment in advanced industry to change the industrial structure, the logistics system must be cost-effective, stable and reliable. The formulation and implementation of a logistics master plan is one of the IDP’s priorities.
The project will support improvements to the logistics system with public-private partnerships under the strong leadership of the RGC. Specifically, the project will formulate the Logistics Master Plan that includes a vision for mid- and long-term logistics improvements, as well as establish a framework to implement and facilitate priority project and to evaluate and monitor progress. By comprehensively improving the logistics system on the basis of inter-ministerial/organizational coordination and close public-private partnerships, it is expected that the business environment will be improved, attracting and promoting advanced industry, which will bring about strong industrial competitiveness. These measures will also improve regional connectivity through transportation means such as the Southern Economic Corridor.
JICA has provided technical cooperation and financial support for improvement of the Southern Economic Corridor and Sihanoukville Port, and will continue working with the RGC for sustainable economic growth in Cambodia and the sub-region.
|Country||Kingdom of Cambodia|
|Project title||The Project for Improving the Logistics System of Cambodia|
|Planned implementation period||March 2018 to February 2023|
|Executing agency||General Department of Logistics, Ministry of Public Works and Transport of Cambodia|
|Target region, facilities||The whole of Cambodia|
|Specific project details (provisional)||Formulation of a logistics master plan, establishment of an institutional framework for implementation, implementation of priority projects and creation of an evaluation and monitoring system|
* The Southern Economic Corridor connects Ho Chi Minh City, Phnom Penh, Bangkok and Dawei in Myanmar, across the Mekong Basin.