Cambodja 

Cambodja country policy

Policy established 12 November 2009

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• Private buyers: SIF facility

Country class: 6

Cambodja country facts

Atradius DSB Economic Research
Country Report last updated :  19 October 2009
Country: CAMBODIA

Political Situation
Increasingly Autocratic

Head of state
King Norodom Sihamoni; PM Hun Sen.

Form of government
Parliamentary democracy dominated by the socialist (formerly communist) Cambodian Peoples Party (CPP).
 
Member of
UN, IMF, WB, AsDB, ASEAN, WTO, Francophonie

Internal Economic Situation
Weak

General situation
Very low level of development, characterized by subsistence agriculture. Lack of infrastructure and low education level are major obstacles for development. The major growth sectors are tourism (Angkor), textiles and construction (mainly in Phnom Penh). All sectors are having difficulties due to the global downturn. In 2007 the news went that large oil wells were found offshore, however since then little has happened. In spite of structural impediments Cambodia showed double digit economic growth figures for several years on a row and Cambodia was seen by some as a new Vietnamese style “economic miracle”. However the economy will show contraction in 2009 as a result of the impact of the global recession on textiles export and tourism. A further reason for concern is the double deficit. Cambodia has a very low tax base, which leads to structural budget deficits. The Cambodian currency (riel) is significantly overvalued thereby hurting the export sectors. Currently external demand for cloths and a dramatic fall in tourist arrivals drive the current account into deficit. Due to a lack of democratic checks and balances the country is extremely corrupt, even for regional standards.  

External Economic Situation
Weak

Main sources of foreign exchange
Tourism and textiles

Main foreign markets
US (54%), EU (21%), Canada (6%), Vietnam (5%)

Main expenses of foreign exchange
Construction materials, fuel.

Balance of payments
Cambodia is in arrears on LT debt due to Russia and the US
South Korea is a main source of FDI (mainly in real estate), however since this country itself is in economic difficulties this is not expected to continue in ST
External economic situation
Bad due to large falls in demand for apparel and double digit fall in tourist arrivals