Most Cambodians consider themselves to be Khmers, descendants of the Angkor Empire that extended over much of Southeast Asia and reached its zenith between the 10th and 13th centuries. Attacks by the Thai and Cham (from present-day Vietnam) weakened the empire, ushering in a long period of decline. The king placed the country under French protection in 1863, and it became part of French Indochina in 1887. Following Japanese occupation in World War II, Cambodia gained full independence from France in 1953. In April 1975, after a seven-year struggle, communist Khmer Rouge forces captured Phnom Penh and evacuated all cities and towns. At least 1.5 million Cambodians died from execution, forced hardships, or starvation during the Khmer Rouge regime under POL POT. A December 1978 Vietnamese invasion drove the Khmer Rouge into the countryside, began a 10-year Vietnamese occupation, and touched off almost 13 years of civil war.
Southeastern Asia, bordering the Gulf of Thailand, between Thailand, Vietnam, and Laos
oil and gas, timber, gemstones, iron ore, manganese, phosphates, hydropower potential, arable land
Population - distribution
population concentrated in the southeast, particularly in and around the capital of Phnom Penh; further distribution is linked closely to the Tonle Sap and Mekong Rivers
Khmer (official) 96.3%, other 3.7% (2008 est.)
PHNOM PENH (capital) 1.731 million (2015)
- Conventional long form
- Kingdom of Cambodia
- Conventional short form
- Local long form
- Preahreacheanachakr Kampuchea (phonetic transliteration)
- Local short form
parliamentary constitutional monarchy
- Phnom Penh
- Geographic coordinates
- 11 33 N, 104 55 E
- Time difference
- UTC+7 (12 hours ahead of Washington, DC, during Standard Time)
accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction
Cambodia has experienced strong economic growth over the last decade; GDP grew at an average annual rate of over 8% between 2000 and 2010 and at least 7% since 2011. The tourism, garment, construction and real estate, and agriculture sectors accounted for the bulk of growth. Around 600,000 people, the majority of whom are women, are employed in the garment and footwear sector. An additional 500,000 Cambodians are employed in the tourism sector, and a further 50,000 people in construction. Tourism has continued to grow rapidly with foreign arrivals exceeding 2 million per year since 2007 and reaching around 4.5 million visitors in 2014. Mining also is attracting some investor interest and the government has touted opportunities for mining bauxite, gold, iron and gems.
- External debt stocks
- US$ 9,318,653,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -1,656,718,571
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 13,144,698,809
- Exports of goods and services
- US$ 12,266,568,265
- Total Merchandise Trade
- FDI, net inflows
- US$ 1,700,968,602
- Commercial Service Exports
- US$ 3,713,475,289
rice, rubber, corn, vegetables, cashews, cassava (manioc, tapioca), silk
tourism, garments, construction, rice milling, fishing, wood and wood products, rubber, cement, gem mining, textiles
- clothing, timber, rubber, rice, fish, tobacco, footwear
- US 23%, UK 8.7%, Germany 8.2%, Japan 7.4%, Canada 6.7%, China 5.1%, Vietnam 5%, Thailand 4.9%, Netherlands 4% (2015)
- petroleum products, cigarettes, gold, construction materials, machinery, motor vehicles, pharmaceutical products
- Thailand 28.7%, China 22.2%, Vietnam 16.4%, Hong Kong 6.1%, Singapore 5.7% (2015)
- Country Risk Rating
- A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high.
- Business Climate Rating
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Dynamic textile industry and tourism sector with strong potential
- Potential offshore hydrocarbon reserves (oil and gas)
- Financial support from bilateral and multilateral donors
- Regional integration (ASEAN)
- Considerable share of agriculture in GDP and vulnerability to climate hazards
- Underdeveloped electricity industry and transport networks
- Lack of skilled manpower
- Dependence on Concessional finance due to weak fiscal revenues
- Significant governance shortcomings
- High poverty rate
Having edged up in 2016, growth is expected to level off at a robust pace in 2017. Cambodia's economy is set to continue benefitting from lively domestic demand, favored by rapid credit growth, moderate inflation and a rise in the minimum wage. Meanwhile, exports of textile products will continue to benefit from the country's growing integration in the world economy. The construction sector is benefiting from the booming property market and the development of tourism-related infrastructure. Tourism, in particular from Asia, is expanding rapidly. Foreign direct investments look set to remain high, especially in the textiles sector, despite steady increases in the minimum wage for the sector, which will be set at USD 153 USD per month (+9.3%) in January 2017. This renewed rise will hit the country's price competitiveness, especially in comparison with neighboring countries like Bangladesh and Myanmar, while the strong dollarization of the economy could adversely affect Cambodian exports if the dollar appreciates. Nonetheless, this increase should ensure relative social stability at a time when the country is experiencing regular episodes of political and social instability, which hamper activity.
Meanwhile, investment will remain limited by the country's infrastructure shortcomings, especially regarding energy, and by the poor education system. The agricultural sector, which employs two-thirds of the economically active population, is likely to continue to be impacted by weak commodity prices.
In 2017, the country continued to run a trade balance deficit, although this is expected to improve slightly. The value of imports of capital goods and oil products remains high, despite weak oil prices. Nonetheless, completion of a number of construction projects should help contain imports of capital goods. The high level of international aid and remittances by expatriate workers will offset the repatriation of dividends by the foreign companies with leading positions in the textile sector. FDIs are rising steadily and make it possible to fund the current account deficit. Accordingly, foreign exchange reserves are expected to continue to increase to reach almost 6 months of imports.
As regards the public accounts, the fiscal deficit should recover as the country has improved the collection of taxes. Moreover, the government has introduced a fiscal consolidation policy and the public accounts are benefiting from the dynamism of the economy. In this context, the public debt will remain stable. However, the public finances will remain highly dependent on foreign aid.
Meanwhile, credit is growing rapidly and the banking sector remains weak because of inadequate supervision. At the same time, the economy as a whole is highly dollarized and foreign currency deposits account for almost all deposits. The banks are, therefore, heavily exposed to exchange rate risks.
During the parliamentary elections of July 2013, the Cambodian People's Party (CPP) led by Prime Minister Hun Sen won a greatly reduced number of seats and the Cambodia National Rescue Party (CNRP) contested the elections and refused to sit in parliament for nearly a year. The opposition benefits from weariness with Hun Sen's reign, acute social tensions over wrongful expropriations and working conditions in the textile sector. The country has thus been affected by widespread protests, severely suppressed by the ruling powers.
In July 2014, a fragile agreement was made between the CPP and the CNRP and the opposition candidates have since sate in parliament. This agreement provided, in particular, for the position of vice-president to be awarded to a CNRP member of parliament and for a government commitment to combat endemic corruption, but the government and the opposition clash frequently. The Prime Minister decided to postpone the elections by five months, without consulting the opposition. They will now be held in June 2018. In addition, we might see renewed mass protests in view of an observed increase in political repression.
Finally the business climate is still marked by a lack of transparency, considerable legal instability and a high level of corruption.