Tourism drives Cambodia’s growth

 Growth in tourism is the key driver that is pushing up the value of Cambodia’s service sector, according to the Asian Development Bank report released last week.

But to reach its full potential the country still needs to harness resources and tackle the problems that are hindering growth.

Tourist arrivals have increased 19% to reach 2.1 million during the first six months of 2013.

The bank identified substantial tourist arrivals as the key factor building business for hotels and restaurants and supporting transport and other related industries.

Cambodia’s service sector as a whole is projected to expand by 7% in 2013 to help achieve gross domestic product growth of 7.2% for the year.

Services account for around 40% of the country’s GDP, lagging behind other countries in the region with similar income levels. Yet, the sector is anticipated to increasingly contribute to GDP growth.

But the report said: “Services remain hampered by inadequate transport infrastructure in particular in rural areas, high costs of electricity as well as logistics and transportation costs.”

“There are inadequate implementation of legal and regulations, tax and governance issues, and shortages of skilled workforce and of institutional capacity.”

For the tourism industry, more efforts are needed to diversify and strengthen value chains, including within the Greater Mekong Sub-region and ASEAN networks, to enable the industry to fully tap into regional markets and raise its competitiveness, it said.

Sourced: ttrweekly