Cambodia saw a rise in gross domestic product of more than 6 percent per year between 2010 and 2012, but to this day it remains one of poorest countries in Asia and long-term economic development remains a challenge.
Since 2004, garments, construction, agriculture and tourism have driven Cambodia’s economy. The garment industry accounts for about 70 percent of Cambodia’s total exports, and currently employs more than 400,000 people while the Cambodian tourism industry has accounted for more than 2 million visitors per year since 2007; in 2012, Cambodia had over 3 million foreign arrivals.
Despite the influx of tourists, Cambodia lacks basic infrastructure, particularly in the impoverished countryside. More than 50 percent of the government budget comes from donor assistance. Economic development in Cambodia is stalled by corruption, limited educational opportunities, high income inequality and poor job prospects.
Poverty in Cambodia remains a major issue, with 37 percent of Cambodian children under the age of five live in a constant state of malnutrition. 90 percent of Cambodia’s 4.8 million poor live in rural areas. At least 12 percent of these people are landless, and though most of them depend on agriculture, productivity is low. According to the International Fund for Agricultural Development, two thirds of the country’s 1.6 million rural households face seasonal food shortages, and rice alone accounts for 30 percent of household expenses.
Women in particular have a disadvantage, as they do not have equal access to education, paid employment, land ownership or other property rights. Often, reproductive health services do not exist at all or they are inadequate.
More than 50 percent of the population in Cambodia are under the age of 25. The World Factbook said creating an economic environment “in which the private sector can create enough jobs to handle Cambodia’s demographic imbalance” will be the major economic challenge in the next decade.
In 2005, oil deposits were found in Cambodia’s territorial waters. According to the World Factbook, this represents “a potential revenue stream for the government, if commercial extraction becomes feasible.” The World Bank also said that Cambodia needs to maintain banking and financial stability through effective supervision. The World Bank also recommends that Cambodia sustain economic growth by “promoting diversification and enhancing competitiveness.” It also says further investments into agriculture will result in more sustainable agricultural growth, which will contribute to poverty reduction.
– Alycia Rock