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Kingdom of Cambodia

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8 January 2015

Cambodia is classified as a less-developed country, still trapped with poverty. The Cambodian government, therefore, places top priority to define its economic and social strategies to address the chronic poverty, and upgrade quality of life and living standards of people, especially those in the remote rural areas. The government is now embarking on the National Strategic Development Plan.

General Information
	Economic Conditions
	Economic Sectors	The Cambodian economy is mainly driven by service sector that constitutes a share of 41 percent, as followed by manufacturing of 30 percent and agriculture of 29 percent (data as of 2007).
	GDP	During 2004-2008, Cambodia registered an average GDP growth rate at 16.45 percent, i.e. In 2004, GDP valued at USD 15,217 Million. In 2005, GDP valued at USD 17,268 Million (up 13.48%). In 2006, GDP valued at USD 20,143 Million (up 16.65%). In 2007, GDP valued at USD 23,013 Million (up 14.25%). In 2008, GDP valued at USD 27,940 Million (up 21.40%).
	GDP Per Capita	During 2006-2008, GDP per capita of Cambodia averaged at USD 1,900, i.e. In 2006, GDP per capita stood at USD 1,800. In 2007, GDP per capita stood at USD 1,900 (up 5.56%). In 2008, GDP per capita stood at USD 2,000 (up 5.26%).
	Inflation	During 2005-2009, Cambodia’s inflation averaged at 8.42 percent, i.e. In 2005, inflation stood at 5.9 percent. In 2006, inflation stood at 4.7 percent. In 2007, inflation stood at 5.9 percent. In 2008, inflation stood at 5.9 percent. In 2009, inflation stood at 19.7 percent.
	FDI	During 2006-2008, foreign direct investment (FDI) to Cambodia averaged at USD 721.67 Million, i.e. In 2006, FDI stood at USD 483 Million. In 2007, FDI stood at USD 867 Million (up 79.50%). In 2008, FDI stood at USD 815 Million (down 6.00%).
	International Reserves	During 2004-2008, Cambodia registered average international reserves at USD 1,694.4 Million. In 2004, international reserves stood at USD 1,118 Million. In 2005, international reserves stood at USD 1,159 Million (up 3.67%). In 2006, international reserves stood at USD 1,411 Million (up 21.74%). In 2007, international reserves stood at USD 2,143 Million (up 51.88%). In 2008, international reserves stood at USD 2,641 Million (up 23.24%).
	External Debts	During 2004-2008, external debts of Cambodia averaged at 3,727.4 Million, i.e. In 2004, external debts stood at USD 3,439 Million. In 2005, external debts stood at USD 3,515 Million (up 2.21%). In 2006, external debts stood at USD 3,527 Million (up 0.34%). In 2007, external debts stood at USD 3,890 Million (up 10.29%). In 2008, external debts stood at USD 4,266 Million (up 9.67%).
	External Debts to GDP	During 2004-2008, external debts to GDP of Cambodia averaged at 18.62 percent, i.e. In 2004, external debts to GDP stood at 23.09%. In 2005, external debts to GDP stood at 20.35%. In 2006, external debts to GDP stood at 17.50%. In 2007, external debts to GDP stood at 16.90%. In 2008, external debts to GDP stood at 15.26%.
	Currency	Riel
	Foreign Exchange Rate	125 Riel = 1 Baht (December 2009)

	International Trade Status of Cambodia
	Trade Balance	During 2004-2008, Cambodia registered trade deficit at USD 1,229 Million on average.
	Trade Value	During 2004-2008, Cambodia registered average trade value at USD 8,267.0 Million, comprising: Average export value at USD 3,518.8 Million, and Average import value at 4,748.2 Million.
	Export	Major export items included garment, footwear and parts, rubber, processed wooden products, fish and marine food products. Principal export markets are USA, Hong Kong and EU. Export Value In 2004, export value stood at USD 2,589 Million. In 2005, export value stood at USD 2,910 Million (up 12.40%). In 2006, export value stood at USD 3,694 Million (up 26.94%). In 2007, export value stood at USD 4,089 Million (up 10.69%). In 2008, export value stood at USD 4,312 Million (up 5.45%).
	Import	Major import items were, i.e. petroleum products, food and beverages, construction materials, cement, machinery, automobiles and motorcycles. Major import sources were, i.e. Thailand, Hong Kong, Taiwan, Korea, France, Japan, Vietnam and China. Import Value In 2004, import value stood at USD 3,270 Million. In 2005, import value stood at USD 3,928 Million (up 20.12%). In 2006, import value stood at USD 4,749 Million (up 20.90%). In 2007, import value stood at USD 5,424 Million (up 14.21%). In 2008, export value stood at USD 6,370 Million (up 17.44%).
	Thai-Cambodian Trade
	Thai-Cambodian Trade Balance	During 2005-2008, Cambodia registered trade deficit with Thailand at 52,062.75 Million Baht on average.
	Thai-Cambodian Trade Value	During 2005-2008, Thai-Cambodia trade averaged at 52,062.75 Million Baht, comprising export value of 53,885.00 Million Baht and import value of 1,822.25 Million Baht.
	Thai-Cambodian Export	Major export items to Thailand included textile, fish products, wooden products, rubber, cigarette, rice, steel, metal products, processed wooden products, fishery products such as fresh fish, fermented fish paste, crispy fish, crops, such as cassava, maize, sesame and soybean, and communication devices. Export Value In 2005, export value stood at 36,802 Million Baht. In 2006, export value stood at 47,003 Million Baht (up 27.72%). In 2007, export value stood at 64,709 Million Baht (up 37.67%). In 2008, export value stood at 67,026 Million (up 3.58%).
	Thai-Cambodian Import	Major import items from Thailand included fuel and finished petroleum products, vehicles and parts, wheat products, cooked food products, ready-to-drink yogurt and yogurt, electrical equipment and appliances, and construction materials. Import Value In 2005, import value stood at 1,270 Million Baht. In 2006, import value stood at 1,323 Million Baht (up 4.17%). In 2007, import value stood at 1,689 Million Baht (up 27.66%). In 2008, import value stood at 3,007 Million (up 78.03%).
	Thai-Cambodian Border Trade Status	Border trade between Thailand and Cambodia takes place at 14 border passes. There are six permanent border passes and eight temporary border passes, at border provinces, such as Sa Kaeo, Chanthaburi, Surin, Trat, Si Sa Ket and Ubon Ratchathani. During 2005-2008, the border trade value averaged at Baht 37,325.00 Million Baht, comprising export value of Baht 35,571.75 Million Baht, and import value of 1,753.25 Million Baht, or Thailand enjoyed trade surplus with Laos of about 33,818.50 Million Baht. Major export items from Thailand included agro-industrial products, vehicles, equipment and parts, petroleum products, construction materials, beverages and energy drinks, textile, chemical products, consumer products, plastic products and electrical appliances.
		Export Value In 2005, export value stood at 28,272 Million Baht. In 2006, export value stood at 33,360 Million Baht (up 17.99%). In 2007, export value stood at 33,283 Million Baht (down 0.23%). In 2008, export value stood at 47,372 Million (up 42.33%). Major import items from Cambodia included iron, steel, processed wooden products, wooden products, farm produce, fishery and livestock products, textile, vehicles, non-electrical machines and parts, metal products, paper products and agro-industrial products. Import Value In 2005, import value stood at 1,202 Million Baht. In 2006, import value stood at 1,237 Million Baht (up 2.91%). In 2007, import value stood at 1,646 Million Baht (up 33.06%). In 2008, import value stood at 2,928 Million (up 77.88%). Trade Problems and Obstacles stemmed mainly from internal management problems of Cambodia, especially taxation, investment promotion and protection, and transparency, etc., which remained below international standards, thus resulting in higher costs and slow growth for Thai trade and investment in Cambodia, inconsistent with economic potential and status of Thailand. Realizing the above problems, the governments of both countries have agreed to expedite alleviation of those problems and to minimize obstacles in trade and investment to ensure the more concrete results. Now, there are some Thai businessmen running their private businesses in hotels, restaurants and trading business. Thailand is a major trade partner and investor in Cambodia.

	Political Situation
	Political System	Cambodia is under a constitutional monarchy system. Since the general election under 1993 Constitution, politics in Cambodia have developed continuously, with gradual progress and deepening in Cambodian society. All parties have freedom in expression and political activities, and people have been more enthusiastic to exercise their votes in both local and national elections.
	Geographic Locations
	Location	Cambodia is in the middle of Southeast Asia.

	Borders	Cambodia borders three nations: North: Thailand (Ubon Ratchathani, Si Sa Ket, Surin and Buri Ram), and Laos (Attapu and Champasak) South: Gulf of Thailand East: Vietnam (Kon Tum, Pleiku, Gla Lai, Dac Lac, ???) West: Thailand (Sa Kaeo, Chanthaburi and Trat)
	Thai-Cambodian Border	The border line between Thailand and Cambodia is 803 kilometers long, comprising: North borders Ubon Ratchathani, Si Sa Ket, Surin and Buri Ram. West borders to Sa Kaeo, Chanthaburi and Trat.
	Area	Cambodia is 500 kilometers wide and 450 kilometers long, or the total area of 181,035 square kilometers, equal to one-third of the total area of Thailand. Total land area is 176,515 square kilometers, and coastline of 4,520 kilometers. Its borderlines total 2,572 kilometers, comprising 803 kilometers bordering Thailand, 541 kilometers bordering Laos, and 1,228 kilometers bordering Vietnam.
	Geography	Much of the country’s area consists of rolling plains, especially the plains surrounding Tonle Sap and Mekong River. There are mountain ranges to the North, i.e. Dongrek, Banthat, and Annam Mountains. Most of its landscape is in a basin shape, with flat-lying basins along the lake and Mekong River, and mountains in three directions: 1. To the East is Annam Mountain along the borderline with Vietnam. 2. To the North and Northeast is Dongrek Mountain along the borderline with Thailand. 3. To the South and Southwest is Banthat Mountain bordering Thailand. Only the Southeast is a plain along the Mekong River.
	Climate	Cambodian climate is in a monsoonal tropical zone. Rainy season starts from May to November and dry season between December to April. Average temperature is 20-36 degree Celsius. The highest temperature is in April and lowest temperature is in January. The highest rainfalls are in October.
	Capital and Major Cities	Phnom Penh is the capital, and the center of manufacturing and commercial activities of the country. Other major cities are Sihanouk Ville or Kampong Som (international deep-sea port), Siem Raj (Siem Reap), Battambang, Koh Kong and Kampong Cham.
	Rivers and Lake	Main rivers and lake include: 1. The Mekong River stretches from Laos to the North of Cambodia in the total distance of 500 kilometers, and runs through Vietnam. 2. Tonle Sap River connects Tonle Sap and Mekong River, of about 130 kilometers long. 3. Bassac River joins Tonle Sap River in front of the palace in Phnom Penh of about 80 kilometers long. 4. Tonle Sap is the great lake of Cambodia, covering the total area of 3,000 kilometers.

	Society
	Population	Total population is 14.7 million, comprising: - Khmer of 90 percent of total population, - Vietnamese of 4 percent of total population, - Chinese of 3 percent of total population, and - Others of 3 percent of total population, such as Thais (Thais Koh Kong), Lao, Cham, Jarai, Rhade, Stieng,
	Population / Birth Rate	During 2004-2008, an average birth rate in Laos is 1.80. Total population is 13.7 million in 2204. In 2005, total population is 14 million (up 2.18%). In 2006, total population is 14.2 million (up 1.42%). In 2007, total population is 14.5 million (up 2.11%). In 2008, total population is 14.7 million (up 1.37%).
	Density	Population density is 80 persons per kilometer.
	Administrative Zones	Cambodia divides its administration into 20 provinces, i.e. Battambang, Banteay Meanchey, Oddar Meanchey, Preah Vihear, Stung Treng, Ratanakiri, Mondolkiri, Kratie, Kampong Cham, Svay Rieng, Prey Veng, Kandal, Takeo, Kampot, Koh Kong, Pursat, Siem Reap, Kampong Thom, Kampong Speu, and Kampong Chhnang. Each province is divided into Srok and Khum, including four municipalities, i.e. Kep, Pailin, Phnom Penh and Sihanouk Ville.

	National Economic and Social Development Plan of Cambodia Cambodia remains in a less-developed countries (LDC) group. The Cambodian government, therefore, places top priority to formulation of the national economic and social development strategies to eradicate poverty, and upgrade quality of life and living standard of people, especially those in the rural areas. The government is now implementing the National Strategic Development Plan (NSDP) (2006-2010), National Poverty Reduction Strategy (NPRS) and Cambodia’s Millennium Development Goals (CMDGs), all of which are being geared towards secure and sustainable prosperity. The current government, led by Somdech Hunsen, Prime Minister, recently announced a policy statement and “Rectangular Strategy for Growth, Employment, Equity and Efficiency in Cambodia”, after the government establishment on July 15, 2004. Main points include: 1. Principal Ingredients of the Rectangular Strategy 1.1 The forefront political agenda of Cambodia under an aim to address economic and social problems now facing Cambodia, and to upgrade the national development potentials, i.e.: (1) Promotion of economic growth (2) Employment generation (3) Implementation of the governance action plan, and thereby ensuring equity, social justice (4) Enhancement of efficiency and affectivity of the Royal Government 1.2 Accelerated implementation of broad reforms in all sectors to reduce poverty and achieve sustainable development 1.3 The Rectangular Strategy aims primarily to develop the nation in continuation from the Triangular Strategy, as developed by the previous government, under nine main objectives, as follows: (1) Reduction of poverty and starvation (2) Nine-year primary education provision (3) Promotion of equality of genders (4) Reduction of infant mortality (5) Improvement of public health system (6) Combating on deadly communicable diseases (HIV/AIDS, malaria, etc.) (7) Environmental protection (8) Enhancement of partnership in development (9) De-mining and assistance for victims These will lay down foundation for implementation of economic policies, aiming towards growth, employment generation, equality, efficiency and contribution to political reforms and systematic cooperation among coalition political parties. 2. The Structure of Rectangular Strategy 2.1 Good governance is the core of the Rectangular Strategy that focuses on four reform areas: (1) Anti-corruption (2) Legal and judicial reform (3) Public administration reform (4) Reform of the armed forces, especially demobilization 2.2 Environment for implementation of the Rectangular Strategy consists of: (1) Peace, political stability and social order (2) Partnership in development with all stakeholders, including the private sector, donor community and civil society (3) Favorable macroeconomic and financial environment (4) Integration of Cambodia into the region and the world 2.3 Four strategic growth rectangles are: (1) Enhancement of agricultural sector (2) Continued rehabilitation and construction of physical infrastructure (3) Private sector growth and employment (4) Capacity building and human resource development, especially education and health services 3. National Poverty Reduction Strategy 3.1 Strengthening peace, stability and social order by implementing concrete measures aimed at enhancing the rule of law, promoting respect for human rights and Democracy to create a political and security environment conducive to sustainable development in the long run 3.2 Ensuring sustainable, high economic growth in the long run averaging 6%-7% per annum 3.3 Ensuring equitable distribution of the gains from economic growth among the rich and the poor, between urban and rural areas, and between men and women; and 3.4 Promoting sustainable environmental management and use of natural resources. Currently, Cambodia has set eight major areas for the national economic development plan: (1) Rehabilitation of irrigation system for agriculture (2) Development of telecommunications (3) Construction of hydropower dams (4) Development of human resources (5) Development of export-oriented industries (6) Development of tourism (7) Exploration of energy and promotion of sustainable use, and (8) Development of trade Cambodia showed promising growth potential. The Asian Development Bank projected that the Cambodian economy would likely grow between 9.5% and 9% in 2007 and 2008, respectively, due to expansion in domestic economic activities, higher FDI, government spending and expansion in agricultural outputs. Continued growth was also seen for textile and garment exports, construction and tourism.
	Sources:	1. Ministry of Foreign Affairs 2. Office of the Board of Investment

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