Tourism is important to the Cambodia economy.
However, while tourism looks set to increase and bring in even more money, there are many other successful industries in Cambodia that also contribute to the wealth of the nation.
Recent history of the Cambodia economy
The 1990s were a period of rebuilding and regeneration in Cambodia, and the economy was no exception. During this period the Cambodia economy grew strongly, as did the economies of other Southeast Asian countries like Thailand, Malaysia and Indonesia.
The boom times that Cambodia experienced in the 1990s ended in 1997 due to the well-known Asian Financial Crisis, and also because of civil violence and political infighting. Things like foreign investment and tourism drastically declined around this time.
After 1999 however, the economy again grew, this time more steadily. There were big gains particularly in the tourism sector. Gross domestic product grew at 5% (or thereabouts) per year until 2004. Between 2004 and 2007 the economy went through another boom, growing at a massive 10% per year. There were big expansions in sectors like textiles, construction, agriculture, and (again) tourism.
Industries of the Cambodia economy
The economy in Cambodia produces goods such as rice, rubber, corn, vegetables, cashews, tapioca and silk. Its two most important industries are tourism and the garment industry, and these are Cambodia’s two biggest sources of hard currency. Also significant are the construction, rice milling, fishing, and gem mining industries.
The garment industry currently employs more than 350,000 people in over 300 factories. It contributes more than 80% of Cambodia’s foreign exchange earnings.
Current state of the Cambodia economy
Income per person in Cambodia is increasing, but it’s still low compared with other Southeast Asian countries. In terms of gross domestic product, Cambodia is ranked #109 (out of 228) in the world according to current figures, which is ahead of its neighbor, Laos (ranked #135), but well behind both Thailand and Vietnam (#25 and #46 respectively).
Cambodian has been affected by the global financial crisis just like everywhere else. For tourism it will mean fewer tourists from far-away places like Europe, but the early evidence seems to indicate that they will be replaced in number by tourists from places closer to home, such as Vietnam and Laos. On the other hand, these tourists might not spend as much money on their holiday as Europeans.
The financial crisis also means less demand for products of the economy (such as rubber and garments), and less construction due to a shortage of credit and foreign investment.
Cambodia has a very young population, with more than 50% of the population under 21 years old, but unfortunately a lot of these young people lack a good education and economically useful skills. These sorts of problems are much worse away from the larger cities, where people are typically very poor and there’s an almost total lack of basic infrastructure.
A big development for the economy was the discovery of exploitable oil deposits in Cambodia’s territorial waters in the Gulf of Thailand in 2005. The total quantity of oil is thought to be six million barrels, which is small by the standards of the oil-rich nations but would be very significant for a country as poor as Cambodia. Commercial extraction of the oil hasn’t begun yet, but there are hopes that it could begin by 2012.
So in short…
Cambodia has come a long way in the few decades since the fall of theKhmer Rouge in 1979. Cambodia tourism has grown in leaps and bounds, and other industries such as garment-making have also done very well. The biggest challenge for the future of the Cambodia economy is managing potential oil wealth in the face of corruption, and ensuring that the very young population get the opportunity to learn useful skills.
Where would you like to go next?
95% of the people are Buddhist, while the temples are Hindu. Read on to find out when and why the ‘switch’ happened.
Education in Cambodia
A look in the education system that is currently in place. NGOs play a big part in educating the children.
Here’s a quick read for what’s appropriate and not while in you’re visiting the country. Since the concept of face and respect is still highly followed, it’s good to know that you don’t offend the locals while you’re there. They won’t hold you to the same standard as the locals, but still knowing a little bit can make your trip much friendlier and pleasanter.
What do the local folks wear? What should you wear? Here’s a quick look into the Khmer’s traditional dresses and also a simple dress code for travelers.
The locals are a big fan of karaoke. But apart from the pop songs, there are other kinds too. The classical Cambodian music is deeply valued by the people.
In downtown Siem Reap, you’ll see restaurants offering free traditional dance with your meal. Here’s you’ll find out more about those dances and other kinds as well.