Abstract:

Twenty-seven years after signing the Paris Peace Agreements ending civil war and a period of Vietnamese occupation, Cambodia is still in the process of transforming from a devastated war-torn nation to a market-oriented economy. The country’s economy has recovered steadily following the 2008 global recession, and GDP per capita has doubled from 630 USD to 1300 USD within the last ten years, realizing a remarkable rate of 7% growth per year. The government has pushed for economic diversification, combining the expansion of agriculture with the acceleration of industrialization driven primarily by garment production (representing the largest manufacturing sector and accounting for a majority of the country's exports), construction, and tourism (Heder, 2012). Stable macroeconomic factors, preferential export access to most developed economies, liberal trade and investment policy, the country’s location in the world’s fastest-growing region, low labour costs and a dynamic workforce are additional factors which contribute to Cambodia’s development. However, while the growth outlook in the medium term remains favourable, enhancing investments in physical infrastructure along with improving labour productivity and performance in the public sector will be crucial if Cambodia wants to remain competitive within the Southeast Asia region and chart a path of economic progress.