competitiveness: which model should cambodia follow? · pdf filecompetitiveness: which model...

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COMPETITIVENESS:Which Model Should Cambodia Follow?

Mr. CHAN Vuthy

EIC’s Researcher

For Distinguished Members of the National Assembly and Senate

March 02, 2005 from 14h30 to 17h30HIMAWARI Hotel

2

Agenda

• Economic Evolutions

• Theory of National Competitiveness

• The Competitiveness of Nation (Michael E. Porter’s Theory)

• Competitiveness Challenges for Cambodia

• Conclusions

3

Classic Keynes Modern

Neo-Classic

WW I (1914-1918)

WW II (1941-1945)

Industrial Revolution

Great Depression 1930s

21th18th 20th19th

Capitalism Welfare Capitalism …?Marxism

Economic Evolutions

4

Theories of National Competitiveness

Absolute Advantage

Comparative Advantage

Comparative Advantage

Competitiveness of Nation

Adam Smith David Ricado Heckscher-Ohlin Michael E. Porter

1776 1803 1919-1933 1990

Importance of International Trade

5

Who is Michael E. Porter?

Michael E. Porter, 57Consultant, Author, Lecturer

• MBA in 1971 & PhD in Business Economics in 1973 from the Harvard Business School• Author of 16 books and over 100 articles• He is considered to be:

-The World's leading expert on strategies for competitiveness-One of the highest paid academics anywhere in the world-Usually booked six months in advance

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Source of Prosperity

Prosperity

National Productivity Competitiveness

ü Productivity is measured by the value of goods & services (price + efficiency) produced per unit of the nation’s human, capital and natural resources ü The productivity of a country is ultimately set by the productivity of all its industries.

Source: Michael E. Porter

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Determinants of a Nation’s Productivity

üMacroeconomic provide the opportunity to create wealth but do not create wealth themselves

üWealth is created at the microeconomic level of the economy

Source: Building the Microeconomic foundations of Prosperity, Michael E. Porter

8

Integration of Macro- & Microeconomic Reform

Source: Thailand’s Competitiveness: Creating the Foundations for Higher Productivity,

Michael E. Porter, May 04 2003

9

Porter’s Diamond of National Competitiveness


10

Importance of Clusters

• “Clusters” are concentrations within the same country of firms, suppliers, producers, of related products and services, and specialized institutions in a particular field.

Cotton SuppliersCotton

Suppliers

Accessory SuppliersAccessory Suppliers

Transportation

Transportation

Machine SuppliersMachine Suppliers

Garment FactoriesGarment Factories

ShoppingShopping

EntertainmentEntertainment

International transportationInternational

transportationRestaurantsRestaurants

Tour operator Tour agency

Tour operator Tour agency

HotelsHotels

Domestic transportation

Domestic transportation

Examples of Some ClustersTourism Textile

11

Business Competitiveness Index 2004-2005

1

2

37

47

79

10

23

4470

Source: Global Competitiveness Report 2004-2005

12

Competitiveness Challenges for Cambodia

• Cambodia’s pledge to join ASEAN Free Trade Area and its commitment on tariff reductions– Dramatic tariff cuts– Greater access to other ASEAN markets– Need for Cambodia firms to compete more

• Ending of the Multi-Fibre Agreement– Challenges to Cambodia’s garment sector

• Cambodia’s accession to WTO– Stricter rules on trade and investment policies

• China joining WTO

13

Comparative Economic Performance: Selected Asian Economies

-10

-5

0

5

10

1998 1999 2000 2001 2002 2003

ChinaThailandVietnamCambodiaMalaysiaSingapore

Annual Growth Rate of Real GDP

Source: IMF, WEO Database

14

• Low investment

• Insufficient job creationObstacle to growth

0%

2%

4%

6%

8%

1998 1999 2000 2001 2002 2003

Vietnam

Malaysia

Cambodia

Thailand

Comparative Foreign Investment Flow: Selected Asian Economies

FDI/GDP

Source: Asian Statistical Yearbook 2004

15

Cambodian Business Environment

- Weak cluster development

- Weak business association

- Unsophisticated local demand

- Small domestic market

- Bureaucracy & corruption

- Weak rule of law

- Barriers to entry

+ Rich of heritages, beautiful locations and some natural resources

- Low skill of labor force

- Poor physical infrastructure

- High cost of inputs (energy etc.)

- Weak financial market

- Low domestic technological capacity

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Cambodian Business Environment

- Weak cluster development

- Weak business association

- Unsophisticated local demand

- Small domestic market

- Bureaucracy & corruption

- Weak rule of law

- Barriers to entry

+ Rich of heritages, beautiful locations and some natural resources

- Low skill of labor force

- Poor physical infrastructure

- High cost of inputs (energy etc.)

- Weak financial market

- Low domestic technological capacity

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Competitiveness: Public and Private Sector Roles

Ø Objective• Economic growth• Social progress

Ø Facilitating• Efficient regulations• Fair policies• Public services• Public information & knowledge

dissemination

Ø Roles• Ensure basic infrastructure• Establish a stable & predictable

macroeconomic, legal & political environment

• Facilitate cluster development & upgrading

Public SectorØ Objectives

• Profit/ Share-holders value• Corporate governance

Ø Producing• Quality products• Low cost production• Good delivery• Meeting standards & norms

Ø Roles• Cluster participation (Greater

influence & cost sharing)• Importance of Business

Associations

Private Sector

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Conclusions

• Private sector development is the only source of growth

• Macroeconomic stability create opportunity for productivity

• Productivity is created only at firm level “microeconomic foundations of competitiveness”

• Importance of linkages throughout the key business sector institutions

1

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edayelak can; vuT§IGñkRsavRCavenAviTüasßanesdækic©km<úCa

sMrab;smaCik smaCika rdæsPa nigRBwT§sPa énRBHraCaNacRkkm<úCa

éf¶TI 02 Ex mina qñaM 2005 enAsNæaKar Himawari ( GtItsNæaKar Micasa )

KMeragKaMRTnItibBaØtþikm<úCa-kaNada

2

matikar• karvivtþn_eTA énRTwsþIesdækic©• RTwsþI PaBRbkYtRbECg énRbeTsCati• RTwsþI PaBRbkYtRbECg énRbeTsCati rbs;elak ém:eXIl ptFWr

(Michael E. Porter’s Theory)

• PaBRbQmmux énkarRbkYtRbECgrbs;km<úCa• esckþIsnñidæan

3

RTwsþIkøasIuk (Classic) RTwsþIEKn (Keynes) RTwsþITMenIb

RTwsþIenGUkøasIuk (Neo-Classic)

sRgÁamelakelIkTI1(11914-1918)

sRgÁamelakelIkTI2(1941-1945)

bdivtþn_]sSahkmµ

karFøak;cuHénesdækic©qñaM1930s

21th18th 20th19th

lT§imUlFnniym lT§imUlFnniymEdleGaytMélelIsuxmalPaBsgÁm

…?lT§im:akSniym

karvivtþn_eTAénRTwsþIesdækic©

4

RTwsþI PaBRbkYtRbECg énRbeTsCati

RTwsþIGtßRbeyaCn_ dac;xat

RTwsþIGtßRbeyaCn_ eRbobeFob

RTwsþIGtßRbeyaCn_ eRbobeFob

RTwsþIPaBRbkYtRbECgénRbeTsCati

elak Gadam sµIt(Adam Smith)

elak davIt rIkadU(David Ricado)

elak hicqW nigGUlIn(Heckscher-Ohlin)

elak ém:eXIl ptFWr(Michael E. Porter)

1776 1803 1919-1933 1990

sar³sMxan; énBaNiC¢kmµGnþrCati

5

etInrNaCa ém:eXIl ptFWr (Michael E. Porter) ?

elak ém:eXIl ptFWr/ Gayu 57qñaM/ CaTIRbwkSa/ CaGñkniBn§esovePA nigCasa®sþacarüenAsklviTüal½y Harvard

• GnubNÐitEpñkRKb;RKgBaNiC¢kmµ (MBA) enAqñaM1971 nigbNÐitEpñkesdækic©BaNiC¢kmµ enAqñaM1973 BIsklviTüal½y Harvard

• Kat;)anniBn§esovePA cMnYn16k,al nigGtßbTelIsBI100• Kat;RtUv)aneKcat;TukfaCa³

- GñkCMnajTImYyelIBiPBelakEpñkyuT§sa®sþ énPaBRbkYtRbECg- TIRbwkSaEdlsIuéføCageKbMputelIBiPBelak- CaTUeTARtUveFVIkarNat;TukCamunry³eBl6Ex

6

RbPBénPaBrugerOgPaBrugerOg

plitPaBrbs;Cati PaBRbkYtRbECg

ü plitPaBRtUv)anvas;eday tMélsrubénTMnij nigesva ¬tMél ÷ brimaN¦ Edlplit)ankñúgmYyÉkta énFnFanmnusS mUlFn nigFnFanFmµCatiü plitPaBrbs;CatimYyKWRtUv)ankMnt;edayplitPaB énRKb;vis½yrbs;RbeTsenaH

Source: Michael E. Porter

7

ktþakMnt;nUvplitPaBrbs;RbeTsmYy

ü esßrPaBm:aRkUesdækic©begáIteGayman »kassMrab;karrIkcMerInesdækic© EtvaminbegáItkarrIkcMerInesdækic©enHedayxøÜnÉgeT

ü karrIkcMerInesdækic© RtUv)anbegáIt enAkMritmIRkUesdækic© ¬enAkMritRkumh‘un¦


m:aRkUesdækic© neya)ay c,ab; nigsgÁm brikarN_énkarGPivDÆn_m:aRkUesdækic© neya)ay c,ab; nigsgÁm brikarN_énkarGPivDÆn_

kMrityuT§sa®sþ nig Rbtþibtþikarrbs;Rkumh‘unkMrityuT§sa®sþ nig

Rbtþibtþikarrbs;Rkumh‘unKuNPaBmIRkUesdækic© énbriyakasBaNiC¢kmµKuNPaBmIRkUesdækic© énbriyakasBaNiC¢kmµ

mUldæanmIRkUesdækic©sMrab;karGPivDÆn__

8

TMnak;TMngrvag m:aRkUesdækic© nigmIRkUesdækic© kñúgkarCMrujkMenInesdækic©

Source: Thailand’s Competitiveness: Creating the Foundations for Higher Productivity,

Michael E. Porter, May 04 2003

PaBl¥RbesIr énm:aRkUesdækic©EtÉgGacnwgnaMmknUvlMhUrcUlmUlFnkñúgry³eBlxøI EtminGacnaMmknUvkMeNInesdæ-kic©yUrGEgVgeT

m:aRkUesdækic©m:aRkUesdækic©

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Gackat;bnßynUvcMnayelIkarvinieyaK

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esßrPaBm:aRkUesdækic©nwgkan;EtRbesIreLIg.

tMrUvkarcaM)ac;sMrab;FananUvplitPaB

begáItnUv»kassMrab;CMrujnUvplitPaBx<s;

9

RTwsþI PaBRbkYtRbECg énRbeTsCati rbs;elak ém:eXIlptFWr (Porter’s Diamond of National Competitiveness)

ktþatMrUvkarktþatMrUvkarktþaplitkmµktþaplitkmµ

ktþa]sSahkmµ nigcegáamKaMRTktþa]sSahkmµ nigcegáamKaMRT

ktþavinieyaKnigkarRbkYtRbECgktþavinieyaK

nigkarRbkYtRbECg

- vtþman énktþaplitkmµEdlmanKuNPaBx<s; dUcCaFnFanmnusS/ mUlFn/ ehdæarcnasm<½n§sgÁm/ rdæ)alnigBt’manviTüa/ bec©kviTüa/ FnFanFmµCati

- c,ab;vinieyaK

- RbB½n§elIkTwkcitþdl;Rkumh‘un

- karRbkYtRbECgesµIrPaBkñúgRsuk

- PaBsµúKsµajéntMrUvkarkñúgRsuk

- tMrUvkarkñúgRsukEdlGacmanskþanuBlsMrab;naMecjeTATIpSarGnþrCati

- KuNPaBénkarpÁt;pÁg;kñúgRsuk

- vtþmancegáamBaNiC¢kmµ CaCagkareFVIBaNiC¢kmµdac;EtÉg

PaBeCaKC½yénkarGPivDÆn_esdækic© KWCadMeNIrkareFVIeGayRbesIreLIgnUvesdækic© EdlkñúgenaHbriyakasvinieyaKKWRtUvTak;TgeTAnwgkarKaMRT nigelIkTwkcitþdl;karRbkYtRbECgmYy d_smRsb

10

sar³sMxan; éncegáamBaNiC¢kmµ• cegáamBaNiC¢kmµ KWCakarRbmUlpþú¿enAkñúgRbeTsnUv Rkumh‘un/ GñkpÁt;pÁg;/

Gñkplit/ sßab½nCMnaj nigsßab½nEdlTak;TgenAkñúgvis½yNamYy .

RkNat;RkNat;

eRKOgbnÞab;bnSMeRKOgbnÞab;bnSM dwkCBa¢ÚndwkCBa¢Ún

eRKOgm:asIuneRKOgm:asIun

eragcRkkat;edreragcRkkat;edrlk;TMnijlk;TMnij

karkMsanþepSg²karkMsanþepSg²

esvakmµdwkCBa¢©úÚntamynþehaH

esvakmµdwkCBa¢©úÚntamynþehaH

ePaCnIydæanePaCnIydæan

Rkumh‘uneTscrN_Rkumh‘uneTscrN_sNæaKarsNæaKar

kardwkCBa¢ÚnkñúgRbeTs

kardwkCBa¢ÚnkñúgRbeTs

]TahrN_ éncegáamBaNiC¢kmµvis½ykat;edr vis½yeTscrN_

11

karvaytMélelIPaBRbkYtRbECg énRbeTsCati qñaM2004-2005

1

2

37

47

79

10

23

4470

Source: Global Competitiveness Report 2004-2005

12

PaBRbQmmux énkarRbkYtRbECgrbs;km<úCa• smaCikPaBrbs;km<úCakñúgtMbn;BaNiC¢kmµesrIGas‘an (ASEAN Free Trade Area)

– karbnßyBn§naMcUl– karebIkTUlayTIpSarkñúgGas‘an– Rkumh‘unkñúgRsukrbs;km<úCanwgRtUvRbQmmuxnwgkarRbkYtRbECg

• karbBa©b;nUvRbB½n§kUta– PaBRbQmmuxén]sSahkmµkat;edrrbs;km<úCa

• smaCikPaBrbs;km<úCakñúgGgÁkarBaNiC¢kmµBiPBelak (WTO)

– tMrUvkareKarBnUvneya)ayBaNiC¢kmµ nigvinieyaK twgrwgCagmun• smaCikPaBrbs;cinkñúgGgÁkarBaNiC¢kmµBiPBelak (WTO)

13

kareRbobeFobnUvkMenInesdækic© rvagbNþaRbeTsGas‘anmYycMnYn

-10

-5

0

5

10

1998 1999 2000 2001 2002 2003

ChinaThailandVietnamCambodiaMalaysiaSingapore

kMenInesdækic©RbcaMqñaM¬PaKry¦

Source: IMF, WEO Database

14

• karvinieyaKBIbreTs enAkm<úCaenAmankMritTab

• minGacbegáItkargarRKb;RKan;sMrab;RbCaBlrdækm<úCa]bs½KÁ sMrab;kMenInesdkic©

0%

2%

4%

6%

8%

1998 1999 2000 2001 2002 2003

Vietnam

Malaysia

Cambodia

Thailand

kareRbobeFobnUvlMhUrcUlvinieyaKbreTspÞal; rvagbNþaRbeTsGas‘anmYycMnYn

vinieyaKpÞsl;brets/ plitplkñúgRsuk

Source: Asian Statistical Yearbook 2004

15

briyakasBaNiC¢kmµkm<úCa




nigkarRbkYtRbECg

-kariyaFibetyü nigGMeBIrBukrlYy

- PaBTn;exSayénc,ab;

- r)aMgsMrab;karvinieyaKfµI²

- PaBminsµúKsµaj éntMrUvkarkñúgRsuk

- TIpSarkñúgRsUktUc

- PaBTn;exSay énkarpÁt;pÁg;kñúgRsuk

- PaBTn;exSaykñúgkarcgRkgCacegáamBaNiC¢kmµ

- PaBTn;exSay énsmaKmn_BaNiC¢kmµ

+ PaBsMbUrEbb énsm,tþivb,Fm’ nigFnFanFmµCati

- kMlaMgBlkmµKµanCMnaj

- ehdæarcnasm<½n§exSay

- ktþaplitkmµéfø ¬GKÁIsnI .l.¦

- PaBTn;exSay énTIpSarhirBaØvtßú

- PaBTn;exSay énsmtßPaBbec©kviTüa

16

briyakasBaNiC¢kmµkm<úCa




nigkarRbkYtRbECg

-kariyaFibetyü nigGMeBIrBukrlYy

- PaBTn;exSayénc,ab;

- r)aMgsMrab;karvinieyaKfµI²

- PaBminsµúKsµaj éntMrUvkarkñúgRsuk

- TIpSarkñúgRsUktUc

- PaBTn;exSay énkarpÁt;pÁg;kñúgRsuk

- PaBTn;exSaykñúgkarcgRkgCacegáamBaNiC¢kmµ

- PaBTn;exSay énsmaKmn_BaNiC¢kmµ

+ PaBsMbUrEbb énsm,tþivb,Fm’ nigFnFanFmµCati

- kMlaMgBlkmµKµanCMnaj

- ehdæarcnasm<½n§exSay

- ktþaplitkmµéfø ¬GKÁIsnI .l.¦

- PaBTn;exSay énTIpSarhirBaØvtßú

- PaBTn;exSay énsmtßPaBbec©kviTüa

rdæaPi)al

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PaBRbkYtRbECg³ tYnaTIrbs;sßab½nrdæ nigsßab½nÉkCn

Ø eKalbMng• kMenInesdækic©• karrIkcMerInEpñksgÁm

Ø sMrbsMrYl• RbB½n§c,ab;d_manRbsiT§iPaB• eKalneya)aysmRsb• esvakmµsaFarN³• B½t’mansaFarN³ nigkarpSBVpSaycMeNHdwg

Ø tYnaTI• FananUvehdæarcnasm<½n§mUldæan• FananUvesßrPaBm:aRkUesdækic© nigesßrPaBneya)ay• sMrYlkñúgkarcgRkg rWbegáItCacegáamBaNiC¢kmµ

sßab½nrdæØ eKalbMng

• R)ak;cMeNj• FananUvGPi)alkic©Rkumh‘un

Ø plit• TMnijEdlmanKuNPaBx<s;• kat;bnßynUvépøedImplitkmµ• dwkCBa©ÚnTan;eBlevla• kMritnUvsþg;dar nigc,ab;TMlab;

Ø tYrnaTI• cUlrYmkñúgcegáamBaNiC¢kmµ ¬begáIn\T§iBlcrcar nigbnßycMnay¦

• sar³sMxan;énkarbegáItCasmaKmn_BaNiC¢kmµ

sßab½nÉkCn

18

esckþIsnñidæan• esßrPaBm:aRkUesdækic©begáIt»kas CMrujnUvplitPaBEtvaminRKb;RKan;eT

• karGPivDÆn_vis½yÉkCn KWCamUldæanRKwHénkMenInesdækic©• plitPaBCatiGacekIteLIg)anEtenAfñak;Rkumh‘unb:ueNÑaH “ mUldæanRKwH énmIRkUesdækic© sMrab;PaBRbkYtRbECg ”

• sar³sMxan; énTMnak;TMng tamry³cegáamBaNiC¢kmµkñúg karCMrujPaBRbkYtRbECg

competitiveness: which model should cambodia follow? · pdf filecompetitiveness: which model...

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