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Asia and Oceania
Cambodia |
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Last reviewed: 2 May 2008 |
Country information
ECONOMY
Basic Economic Facts
GDP: US$ 8.3bn (2007)
GDP per head: US$585 (2007)
GDP (PPP) per head: US$3,806 (2007)
Annual Growth: 10.1% per annum (2007)
Inflation: 5.9% (2007)
Major Industries: Agriculture, fishing and forestry, mining, construction, garment manufacture
Major trading partners: United States, Germany, United Kingdom, Singapore, Japan, Thailand, China, Hong Kong, Vietnam, Canada and Taiwan
Exchange Rate: £1=7,849.80 Riel (April 2008)
The government has made good progress in stabilising the economy and reducing poverty levels. In 2005 the government developed a comprehensive reform agenda set out in the National Strategic Development Plan, which has solid support from foreign donors. Cambodia remains largely agrarian with 1 in 3 Cambodians living below the poverty line. Inequality has grown over the last decade, particularly during the years 1994-1997. Less than 54% of Cambodians are economically productive. The infrastructure is rudimentary and the country remains dependent on external donor funding for over a third of its expenditure. Cambodia has seen impressive growth rates at almost 10% since 2000. However, growth has been narrowly based (primarily in Phnom Penh, Siem Reap and Sihanoukville, and in the garment, construction and tourism sectors) with modest linkages to the rest of the economy and this pattern has resulted in limited benefits to the 84% of the population who live in rural areas. To produce more sustainable, faster and broader growth Cambodia must tackle core governance issues and improve the climate for investment, especially in agriculture.
Following the recent 2007 Article IV consultations with the government, the International Monetary Fund (IMF) commended the Cambodian administration on its policy performance. The first Cambodian Development Co-operation Forum meeting was held in June 2007. Foreign donors have promised to provide US$689m in aid for 2007. This reported figure is higher than the US$601m pledged for 2006, reflecting a larger number of donors formally pledging, rather than a significant increase in aid. Whilst there has been very good progress in the social sectors, and in improving public financial management, international donors remain concerned about the lack of demonstrable progress against important governance reforms. Failure to tackle corruption, improve the independence of the judiciary and to secure land rights for poor people, will impede further progress. The 10 years in draft anti-corruption legislation remains under review and it is not yet known when this legislature will be debated or implemented in full. The problems of revenue collection, systemic corruption and smuggling remain. The government has made some progress on pushing through new and amended legislation to fulfil its World Trade Organisation (WTO) membership commitments (Cambodia was the first LDC to become a member of WTO). Oil and gas deposits have been identified in the Cambodian territorial waters but quantities have not yet made public. Limited progress has been made with Thailand over the territorial rights to the disputed oil and gas fields in the Gulf of Thailand. International donors are encouraging the Government to endorse the Extractive Industries Transparency Initiative (EITI) and are providing support for this process through the public financial management reform programme. This will be important to ensure that the country enjoys the full benefits from the potential resources boom.