Impacts of Cambodia’s tariff elimination on household welfare and labor market: a CGE approach

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As it prepares for the establishment of the ASEAN Economic Community, by the end of 2015, trade liberalization and economic integration (both regional and international) have become top policy priorities for the Royal Government of Cambodia in recent years. The objective of this team of local researchers - selected for PEP support under the first round of the PAGE initiative - is to produce reliable evidence regarding the significance and actual effects of this trend on growth, employment and poverty reduction in the country, using CGE modeling and macro-micro simulation techniques. Their results show that tariff elimination leads to an expansion in production outputs and an increase in export/import volumes. Government policy for indirect tax-led revenue compensation results in the change of structural production output, favoring the manufacturing industry - versus agriculture and service sectors. However, in general, the gains in terms of welfare at the household level are small and, for some populations living in “remote” areas, the effects are in fact negative. Find out more through the publications below:

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