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Economy of Cambodia

From Academic Kids

Economy - overview: In spite of recent progress, the Cambodian economy continues to suffer from the legacy of decades of war and internal strife. Per capita income, although rapidly increasing, is low compared with most neighbouring countries. The main domestic activity on which most rural households depend is agriculture and its related sub-sectors. Manufacturing output is varied but is not very extensive and is mostly conducted on a small-scale and informal basis. The service sector is heavily concentrated in trading activities and catering-related services.

During 1995, the government implemented firm stabilization policies under difficult circumstances. Overall, macroeconomic performance was good. Growth in 1995 was estimated at 7% because of improved agricultural production (rice in particular). Strong growth in construction and services continued. Inflation dropped from 26% in 1994 to only 6% in 1995. Imports increased as a result of the availability of external financing. Exports also increased, due to an increase in log exports. With regard to the budget, both the current and overall deficits were lower than originally targeted.

After four years of solid macroeconomic performance, Cambodia's economy slowed dramatically in 1997-98 due to the regional economic crisis, civil violence, and political infighting. Foreign investment and tourism fell off. Also, in 1998 the main harvest was hit by drought. But in 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 4%. The long-term development of the economy after decades of war remains a daunting challenge. The population lacks education and productive skills, particularly in the poverty-ridden countryside, which suffers from an almost total lack of basic infrastructure. Recurring political instability and corruption within government discourage foreign investment and delay foreign aid. On the brighter side, the government is addressing these issues with assistance from bilateral and multilateral donors. So long as political stability lasts, the Cambodian economy is likely to grow at a respectable pace.

Cambodia's emerging democracy has received strong international support. Under the mandate carried out by the United Nations Transitional Authority in Cambodia (UNTAC), $1.72 billion (1.72 G$) was spent in an effort to bring basic security, stability and democratic rule to the country. Regarding economic assistance, official donors had pledged $880 million at the Ministerial Conference on the Rehabilitation of Cambodia (MCRRC) in Tokyo in June 1992, to which pledges of $119 million were added in September 1993 at the meeting of the International Committee on the Reconstruction of Cambodia (ICORC) in Paris, and $643 million at the March 1994 ICORC meeting in Tokyo. To date, therefore, the total amount pledged for Cambodia's rehabilitation is approximately 1.6 G$.

GDP: purchasing power parity - 8.2 G$ (1999 est.)

GDP - real growth rate: 4% (1999 est.)

GDP - per capita: purchasing power parity - $710 (1999 est.)

GDP - composition by sector:
agriculture: 43%
industry: 20%
services: 37% (1998 est.)

Population below poverty line: 36% (1997 est.)

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 4.5% (1999 est.)

Labour force: 6 million (1998 est.)

Labour force - by occupation: agriculture 80% (1999 est.)

Unemployment rate: 2.8% (1999 est.)

Budget:
revenues: 327 M$
expenditures: 393 M$, including capital expenditures of $NA (1999 est.)

Industries: garments, rice milling, fishing, wood and wood products, rubber, cement, gem mining, textiles

Industrial production growth rate: NA%

Electricity - production: 210 GWh (1998)

Electricity - production by source:
fossil fuel: 59.52%
hydro: 40.48%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 195 GWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: rice, rubber, corn, vegetables

Exports: 821 M$ (f.o.b., 1999 est.)

Exports - commodities: timber, garments, rubber, rice, fish

Exports - partners: US, Singapore, Japan, Thailand, Hong Kong, Indonesia, Malaysia, US

Imports: 1.2 G$ (f.o.b., 1999 est.)

Imports - commodities: cigarettes, gold, construction materials, petroleum products, machinery, motor vehicles

Imports - partners: Singapore, Vietnam, Japan, Australia, Hong Kong, Indonesia, Thailand

Debt - external: 829 M$ (1999 est.)

Economic aid - recipient: 470 M$ pledged in grants and concessional loans for 2000 by international donors

Currency: 1 new riel (CR) = 100 sen

Exchange rates: new riels (CR) per US$1 - 3,786.0 (January 2000), 3,807.8 (1999), 3,744.4 (1998), 2,946.3 (1997), 2,624.1 (1996), 2,450.8 (1995)

Fiscal year: calendar year

See also

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