Economy of Cambodia
| Gross domestic product (GDP in U.S.$) | $6.2 billion (2005) |
| GDP per capita (U.S.$) | $439.70 (2005) |
| Monetary unit | 1 riel (CR), consisting of 100 sen |
| Number of workers | 6,817,566 (2005) |
| Unemployment rate | 1.8 percent (2001) |
Cambodia is one of the world’s poorest nations. In 2006 its total gross domestic product (GDP) was $7.3 billion, yielding a per capita GDP of just $511.30, among the lowest in the world.
Even before being plunged into civil conflict in the 1970s, Cambodia lacked significant industrial development, with most of the labor force engaged in agriculture. The country was self-sufficient in food and produced exportable surpluses of its principal crops of rice and corn. In spite of relatively low yields and a single harvest per year, Cambodia annually exported hundreds of thousands of tons of rice.
The civil war from 1970 to 1975, the Khmer Rouge regime from 1975 to 1979, and the Cambodia-Vietnam War from 1978 to 1979 virtually destroyed Cambodia’s economy. By 1974, under wartime conditions, rice had to be imported, and production of Cambodia’s most profitable export crop, rubber, fell off sharply. The civil unrest also disrupted Cambodia’s fledgling manufacturing industry and severely damaged road and rail networks.
In 1975 the newly installed Khmer Rouge government nationalized all means of production in Cambodia. Money and private property were abolished, and agriculture was collectivized (ownership was transferred to the people as a group, represented by the state). The Khmer Rouge Four-Year Plan, a utopian document drafted in 1976, envisaged multiple plantings of rice and a vastly expanded irrigation system. The plan aimed to increase income from exports of rice and other products and to use this income to buy machinery with which to industrialize the country. The Four-Year Plan was poorly thought out, brutally enforced, and unsuccessful. Rice production rose slightly, but between 1976 and 1978, hundreds of thousands of people died from malnutrition, overwork, and mistreated or misdiagnosed diseases. The Khmer Rouge executed hundreds of thousands more people whom they judged to be enemies of the regime. The atrocities of the Khmer Rouge period decimated Cambodia’s labor force.
After the Khmer Rouge were overthrown in early 1979, the government’s grip on agricultural production loosened, and millions of Cambodians attempted to resume their lives as subsistence farmers. By the mid-1990s Cambodia once again achieved self-sufficiency in rice production and began to export small quantities of rice. The country’s infrastructure improved gradually in the 1990s, largely due to massive infusions of foreign assistance. Other sectors of the economy were less fortunate, however. By 1995 the country’s economy as a whole was performing at only 40 to 50 percent of its pre-1970 capacity. For many visitors to the country, Cambodia’s poverty is masked by the apparent prosperity of sections of Phnom Penh.
A. Labor
In 2006 Cambodia had a labor force of 6.9 million. Agriculture was the largest employer, engaging 60 percent of the workers. It is followed by services (27 percent) and industry (13 percent). Underemployment in urban areas is high, and working conditions in developing industries, such as clothing manufacturing, are poor. Efforts to unionize factory workers have encountered significant opposition from factory owners.
B. Agriculture and Fishing
Agriculture is the largest sector of Cambodia’s economy, contributing 30 percent of the GDP in 2006. Rice is Cambodia’s most important crop and the staple food of the Khmer diet. More than one-half of cultivated land—much of it of poor quality—is planted in rice. Rubber, Cambodia’s other important export crop, is grown in plantations in the eastern part of the country. Corn, cassava, soybeans, palm sugar, and pepper are also grown commercially, while cucumbers and fruits, including mangoes, bananas, watermelons, and pineapples, are raised for local consumption. Chicken and pigs are widely domesticated, while cattle and water buffalo are used for agricultural work.
Freshwater fish are an important ingredient of the typical Cambodian diet. Most of the annual catch is consumed locally. Important types of fish caught include perch, carp, lungfish, and smelt. The Tônlé Sap is the most concentrated source of freshwater fish in Southeast Asia. Commercial fishing in the Gulf of Thailand, on the other hand, is relatively undeveloped.
C. Mining and Manufacturing
In 2006 industry, primarily manufacturing, contributed 26 percent of Cambodia’s GDP. Although mining is not a major industry, Cambodia produces limited quantities of zircons, sapphires, and rubies, and exploits commercial deposits of salt, manganese, and phosphate. In the early 1990s Cambodia began exploring for petroleum in the Gulf of Thailand, but Thailand and Vietnam, who claim offshore areas of the gulf, have contested the exploration projects.
Cambodia’s manufacturing base was severely damaged in the civil war of the 1970s and was later mismanaged under the Khmer Rouge. Manufacturing activity recovered slowly in the 1980s and 1990s but still represents a relatively minor sector of the national economy. Manufactured products include bricks, tile, cement, processed rubber, textiles, clothing, and furniture.
D. Services
Services, especially small-scale commercial activities, account for 44 percent of Cambodia’s GDP. Since the late 1980s Cambodia has encouraged tourism as an important source of foreign exchange, and the annual number of visitors rose from less than 1,000 in 1987 to 1,700,000 in 2006. Tourist spending in 2006 was 963 million U.S dollars. Most tourists are from Asian countries, and popular destinations are Phnom Penh and the ruins of Angkor.
Before the civil war, Cambodia’s principal exports were rice, rubber, and corn. In 1971 these were valued at $60 million. Exports fell sharply under wartime conditions and later under the Khmer Rouge. Cambodia’s export economy recovered slowly in the 1980s and more rapidly in the 1990s, when the major exports were rubber, timber, and soybeans. Trade in forest products continued after the government ban on logging in 1995, but by 1997 the value of forest product exports dropped by one-half. Total exports in 2004 were valued at $2,798 million. Vietnam, Thailand, the United States, Singapore, and China purchase most of Cambodia’s exports.
Cambodia’s primary imports have always been manufactured goods, such as textiles, motor vehicles, machinery, and processed foods. In 1996 imports were valued at $2.1 billion. Thailand, Singapore, Vietnam, and Japan supply most of the goods that Cambodia imports.
F. Currency and Banking
Cambodia’s unit of currency is the riel, consisting of 100 sen. The value of the riel shrank from 700 riels per U.S.$1 in 1991 to an average of 4,103 riels per U.S.$1 in 2006. Currency is issued by the National Bank of Kâmpŭchéa, established in 1980. There are relatively few private banks in Cambodia. Most of them are foreign-owned banks operating in Phnom Penh and other cities.
G. Transportation
Cambodia has a relatively undeveloped road system. In 2004 the country had 38,257 km (23,772 mi) of roads, of which only 6 percent were paved. A modern highway links Phnom Penh with the deepwater port of Kâmpóng Saôm. Foreign nations, especially Japan, have donated money to help repair roads connecting other Cambodian cities. In the mid-1990s the entire railroad system extended about 600 km (about 370 mi). A rail line runs between Phnom Penh and Bãtdâmbâng and extends to the Thai border. Another line connects the capital with Kâmpóng Saôm. The Mekong River, which is navigable in central and southern Cambodia, serves as another transportation artery. In early 1999 construction began on a bridge over the Mekong. The bridge, located to the northeast of Phnom Penh, is scheduled for completion in 2002. The country’s main international airport is in Phnom Penh. The national airline is Royal Air Cambodge.
H. Communications
The government controls all electronic communications in Cambodia. Telephone service is barely adequate in the capital and almost nonexistent elsewhere. In 2000 only 8.3 television sets existed for every 1,000 people. Radios are more common, totaling 128 for every 1,000 people. About 20 newspapers are published in Cambodia, most of them not widely available outside of Phnom Penh. The Cambodia Daily is published in a combination of English and Khmer. The most important Khmer-language daily is Reaksmei Kâmpŭchéa (Light of Cambodia). The Phnom Penh Post is published biweekly in English.
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