Economy of Cambodia

According to cheeroutdoor, Cambodia as a whole remains an underdeveloped agrarian state. This country, along with Laos and Myanmar, is one of the three most underdeveloped countries in Southeast Asia. Cambodia also stands out with an extremely low percentage of the budget for investment – only 4% (the lowest in Southeast Asia). Throughout the 1990s. the economy remained heavily dependent on foreign aid and investment, which declined sharply between 1996 and 1998. GDP growth in 1999 – 4.3% (3.34 billion US dollars), in 2000 – 5.5%, in 2001 – 6.25%, in 2002 – St. 5%. 36% of the population lives below the poverty line. Unemployment 2.8% of the population.

The government declares the maintenance of macroeconomic stability and the implementation of economic reforms as the main goal in the economic sphere. The planned program includes measures to streamline the policy in the field of taxation and in the field of public expenditure management, as well as the restructuring of banks, new policy principles in the field of logging.

Cambodia is an agricultural country. 13-16% of the entire territory is cultivated, and St. 1/2 of the arable land is used to grow rice, the staple food for most of the population. Agriculture employs 80-85% of the able-bodied population. Agricultural production accounts for 45% of GDP. The agrarian law adopted in 1992 provides for the following forms of land ownership: private ownership for a land plot with a house, ownership of agricultural land up to 5 hectares in size with inheritance permission, concession for large agricultural plots without the right to inherit, lease and sell. Rice production is, according to some sources, 15% of GDP. The yield remains very low – approx. 1.64 tons per 1 ha (for comparison: Thailand – 2.1, Philippines – 2.7 and Vietnam – 3.2 tons).

The second most important agricultural product is rubber. His plantations are located in the red soils of the provinces of Kampong Cham, where they cover 61,000 hectares. In recent years, the area occupied by hevea has increased significantly (according to various estimates, from 100 to 150 thousand hectares, sometimes the figure is 330 thousand hectares). The main consumers of rubber: Malaysia, Singapore, Indonesia, Thailand.

Other crops grown in Cambodia include sugar cane, cassava, bananas, corn, coconut and other palms, citrus fruits, sweet potatoes, mangoes, cottonseed (ceiba five-starred), jute, olives, and spices.

Fishing (fish is the main source of animal protein) is carried out in the waters of the Gulf of Thailand and Lake Tonle Sap. In recent years, Phnom Penh’s industrial runoff has led to an environmental crisis in the fishing areas of Tonle Sap Lake and the Mekong River. The unique ecological complex of the lake and the Tonle Sap River is under serious threat due to: a) deforestation along the banks, which leads to land sliding into the lake, sharply increases the level of sediments; 2) an increase in the number of settlements along the shores of the lake. Animal husbandry includes cattle, pigs, buffaloes.

Approximately 3/4 of the area of Cambodia is covered with forests, which are still little exploited legally, especially in remote mountainous areas with poorly developed infrastructure. The logging and sale of roundwood in Thailand is one of the main elements of the criminal business in the country. The Cambodian state is unable to stop this business. In order to somehow reduce forest loss, the government is taking original measures to increase the country’s forest resources: the National Assembly adopted an addition to the forest law, according to which, in order to obtain a wedding permit, newlyweds must plant two trees.

Most of the industrial enterprises of Cambodia are engaged in the processing of agricultural products and the manufacture of various kinds of consumer goods: cotton yarn, bicycle tires, rubber shoes, soap, cigarettes, soft drinks. As a result of hostilities and socio-economic upheavals in the 1970s-90s. The country’s economy suffered enormous damage. There are (but not always operating at full capacity) auto and tractor assembly, metalworking, ship repair, cement, chemical, pharmaceutical, textile, timber and paper enterprises.

The total length of motor roads is 15,000 km, but only 1/5 has an asphalt surface. Two railway lines with a total length of approx. 650 km connect Phnom Penh with Poipet on the border with Thailand and with the city of Kampong Saom on the south coast.

Before the construction of a new port in Kampongsaom (formerly Sihanoukville), which provided Cambodia with access to the ocean through the Gulf of Thailand, Phnom Penh remained the main port center of the country. Large seagoing vessels can only ascend to Phnom Penh on the Mekong River during high water periods.

Exports: rubber, timber, soybeans, rice, corn, sesame, fruits, black pepper, fish. Imports: petroleum products, equipment, tractors, trucks, cement, consumer goods. Cambodia is completely dependent on imported oil and petroleum products. Main foreign trade partners: Singapore, Malaysia, Vietnam, Japan, Australia, Indonesia, France, Germany, USA. In the 1990s the trade deficit was gradually reduced. The volume of foreign trade in 1997 amounted to approx. $1.8 billion ($852 million import, $425 million export, $523 million re-export).

In 2003, the government hoped to increase state revenues as a result of the resumption of tourist visits to the largest temple complex of Angkor, but due to the outbreak of SARS, the positive results of the tourism business may be called into question. In March 2002, 29 tourist points were opened with information about the crimes of the Khmer Rouge regime.

Poor infrastructure development also hinders tourism. One of the steps towards overcoming these difficulties was the decision to build a new terminal for Sim Reap airport near Angkor. The Cambodian government signed a 20-year deal with a French consortium to fund it.

Economy of Cambodia