How much do you about Cambodian Economy?
Most people know Cambodia as the poorest country amongst those in Southeast Asia. When people talk about “CAMBODIA”, poverty, HIV, drugs and so on have come through their mine. But at least, they know Angkor Wat because it is the most attractive tourist destination in the world. Well, almost everyone knows Angkor Wat, needless to say. However, maybe they haven’t known enough about this poor little country.
Well, this article should be about ECONOMY, right? According to the World Bank, Cambodia has gone through significant transition of its economy fluctuation over the past decades. In 2015, Cambodia reached the lower middle-income status and the authorities aspire to attain upper middle-income status by 2030. Is it possible for Cambodia to jump at this point while the politic instability triggers the growth phenomena? In between 1995 and 2018, the growth rate hit an average accounting for 7.7%, making it the fastest growing economy in Southeast Asia. In 2018, the growth was at 7.5%, compared to 7% in 2017 and expected to remain growing in 2019.
World Bank also stated that poverty in Cambodia continues to fall. An official estimation on the poverty rate in 2014 was 13.5% compared to 47.8%. So, it is clearly seen the huge success of poverty reduction in Cambodia. The same source mentioned that the preliminary estimated for Cambodia show real growth achieved a four-year high of the economy in between that. The economy performed better than expected, driven primarily by rapid expansion of exports and robust internal demand, as well as a surge in Foreign Direct Investment. The growth factors can be:
- Direct Investment
How the past can draw comparison?
The serious economy slowed down in between 1997 and 1998 due to the region economic crisis, the civil unrest, and the instability of politics; therefore, the foreign investment declined during this period. Plus, one of the main sources of economy which is agriculture was hit by drought, resulted in low crop exports in 1998. However, the first full year of relative peace in 30 years made on the progress of economic reforms and the growth resumed by 4% in 1999. Currently, Cambodia’s foreign policy focuses on establishing friendly borders with its neighbors (such as Thailand and Vietnam), as well as integrating itself into regional (ASEAN) and global (WTO) trading systems. Some of the obstacles
faced by this emerging economy are the need for a better education system and the lack of a skilled workforce; particularly in the poverty-ridden countryside, which struggles with inadequate basic infrastructure. Nonetheless, Cambodia continues to attract investors because of its low wages, plentiful labor, proximity to Asian raw materials, and favorable tax treatment (Wikipedia, Aug 01, 2019).
Note: This article may not be able strongly served as a reference for any academic research. For more understanding, please go to the hyperlink above.