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Economy and business in Cambodia

Since the UN peace plan on Cambodia was signed in 1991, both government policy and bilateral and multilateral development assistance have contributed to economic growth. From 2000 to 2010, the country's gross domestic product (GDP) increased by an average of eight per cent per year. In 2017, the country's GDP increased by 6.9 per cent, compared with seven per cent in both 2015 and 2016.

Business and Economy of Cambodia

According to countryaah, Cambodia is still among the world's poorest countries. Cambodia is in 160th place on the list of countries' gross national income (GNI) per capita. Of the nine other ASEAN countries, only Myanmar has a lower ranking (2017).

Agriculture

Agriculture contributes 25.3 per cent of the country's GDP and employs 48.7 per cent of the working population. After many years of collective farming, private land ownership was reinstated with the new Constitution of 1989. Agriculture is hampered by poor infrastructure and poor access to fertilizers. Furthermore, it is subject to frequent drying and flooding.

89 per cent of the arable land is cultivated. Rice is by far the most important product from agriculture. Total production was 7.4 million tonnes in 2018, when production increased by 3.5 per cent. The most important rice areas are in the Siem Reap province around Lake Tonlé-Sap and in the province of Battambang. In addition to rice grown including maize, sugar cane, Cashew, manioc and bananas. Silk is also produced. Rubber is produced on plantations built by the French in the 1920s, and is an important export product.

Forestry

Timber is traditionally an important export product. Vietnam is the main importer of timber. In the countryside, firewood is largely used. However, the logging has been out of control. The government's policy and illegal logging led to the country's forest-covered area was reduced from 60 per cent in 2010 to 45 per cent in 2016.

Fishing

Fish is an important component of the diet. Lake Tônlé-Sap is one of the world's richest areas for freshwater fishing, which also takes place in the Mekong and Tonlé-Sap rivers. In 2016 this fishing amounted to 509 300 tonnes. Cambodia then had the world's fourth largest freshwater fishery for China, India and Bangladesh. In addition, fish farming takes place, which in 2016 amounted to approximately 200,000 tonnes. Offshore 435 kilometers long coast, sea fishing is conducted. The main ports for supplying the catch are Sihanoukville and Koh Kong.

Industry, mining and energy

The industry contributes 32.8 per cent of the country's GDP and employs 19.9 per cent of the working population. The main industrial activity is the production of clothing and footwear. In addition, the industrial sector includes the processing of agricultural products, including rice, and the production of cement. In Phnom Penh there is extensive construction activity, especially as a result of investments from China, Hong Kong, the US and the Netherlands. Since 1979, three quarters of industrial investment has been made in Phnom Penh.

Cambodia has limited mineral resources, and only phosphate and gemstones are mined.

Most of the energy has traditionally come from wood, but after 2011 there has been a strong upswing in domestic energy production. Cambodia has great hydropower potential, and after extensive power development, hydropower production increased from 51 GWh in 2011 to 2,000 GWh in 2015. Several new coal-fired power plants were also built, which in 2015 produced 2,376 GWh. Despite increased self-production of electrical energy, the country is still dependent on imports. In 2016, the country imported 1.6 TWh of a total energy supply of 7.2 TWh.

Tourism

Tourism has grown strongly since 2008, when 2.1 million foreign tourists visited the country. Five years later, that number had doubled. From 2013 to 2018, the number of foreign tourists increased from 4.2 to 6.2 million. Most tourists came in 2018 from China (1.2 million), Vietnam (800,000), Laos (460,000), Thailand (382,000), South Korea (302,000) and the United States (250,000). 1.9 million foreign tourists arrived at Siem Rap International Airport, which is the nearest airport to the country's main tourist center Angkor. 1.9 million foreign tourists arrived at Phnom Penh International Airport.

Transport and Communications

Most of Cambodia's transport system was destroyed during the civil war. The country has a railway network of 612 kilometers, but only the line between Phnom Penh and Sihanoukville at 264 kilometers is operational. The road network also has its center in Phnom Penh, but is poorly maintained. In total, the road network amounts to 47,263 kilometers, of which 12,239 kilometers have a fixed tire.

Phnom Penh, Siem Reap and Sihanoukville have international airports. In practice, maritime traffic on the rivers and lake Tônlé-Sap is the most important domestic means of communication and covers a total of 3700 kilometers. Phnom Penh River Port is located 330 kilometers from the mouth of the Mekong in the South China Sea, and can be reached by vessels of a maximum of 5,000 deadweight tonnes (dwt). Sihanoukville on the Gulf of Thailand is the country's most important deepwater port with oil, container and cruise ship terminals.

Foreign Trade

Cambodia's exports amounted to USD 11.42 billion in 2017, while imports amounted to USD 14.37 billion. As a result, the country had a deficit in the foreign trade balance of USD 2.95 billion.

The five main export markets are:

  • United States (21.5 percent)
  • United Kingdom(9.0 per cent)
  • Germany(8.6 percent)
  • Japan(7.6 percent)
  • China (6.9 percent)

The main export products are clothing, footwear, timber, rice, rubber, fish and tobacco. Clothing and footwear accounted for 68 per cent of total exports in 2017.

The four main import markets are:

  • China (34.1 percent)
  • Singapore(12.8 percent)
  • Thailand (12.4 percent)
  • Vietnam (10.1 percent)

The main import products are petroleum products, raw materials for the clothing and footwear industry, building materials, electronics, motor vehicles, cigarettes and pharmaceutical products.

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