Thailand
Cambodia: OECD calls for end to monopolies to make transportation more competitive
The OECD says a lack of competition in Cambodia’s transportation sector could hurt the Kingdom’s economic growth. It warns the costs of logistics in terms of product sales are double the global average, and higher than the Kingdom’s neighbours.
ASEAN asked it to look into freight transport by road, rail and water, freight forwarding, warehousing, small package delivery and value-added logistics in the ten member nations.
Transportation and logistics accounted for 7.8 percent of Cambodia’s economy in 2019 but the sector has been hit hard in the past two years by the spread of the Coronavirus. As many as 15 percent of logistics providers were heading for bankruptcy as of June 2020, according to the Cambodia Freight Forwarders Association.
Cambodia’s roads carry 90 percent of freight and passengers according to the ADB. The OECD is advising the Cambodian government to ease rules on cross border trade with Thailand and Vietnam which limit the number of trucks allowed to make the trip.
“You should either do a general licensing regime which, as long as you comply with certain road safety regulations, you will be able to provide that service cross border,” said Ruben Maximiano, Regional Manager at the OECD. “If you decide to have a quota system then you need to make sure that’s being updated, reviewed and analysed.”
Sea transportation is growing in importance, helped by higher demand at the country’s two state-owned international ports in Phnom Penh and Sihanoukville. The OECD recommends the government considers allowing private companies to take over some services It also expressed concern about the Transport Ministry’s apparent lack of impartiality.
“For vessel registration the ministry has the discretion to waive certain requirements for certain applicants,” said Leni Papa, a policy researcher at the OECD. “Sometimes the ministry can refuse registration without reason or cancel a certificate of registry in the interests of the public. We found that this could lead to legal uncertainty and legal uncertainty could lead to higher costs for competitors in the market,” she said.
Source: https://www.khmertimeskh.com/50903261/oecd-calls-for-end-to-monopolies-to-make-transportation-more-competitive/