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Home » Economy of the World » Cambodia
 

Cambodia Economy
Formerly known as Kampuchea, The Kingdom of Cambodia, is a country in southeast Asia. Phnom Penh is its capital. Cambodia is the successor state of the once powerful hindu and buddhist Khmer empire. Despite it srecent progress, Cambodia Economy continues to suffer because of the legacy of war and internal conflicts. Although the per capital income of the country, although rapidly increasing but when compared with the neighboring countries comes low. The main domestic activity on which most rural households depend is agriculture and its related sub-sectors. Manufacturing turnout, although varied but is not very copious and is mostly conducted on a small-scale and that also on informal basis.

The service sector of Cambodia Economy is intemperately engaged in trading activities and catering-related services. Reuters has reported that oil and natural gas reserves have been found in off-shore Cambodia. Production of oil could potentially have a great effect on the future of the economy of Cambodia.

During the difficult circumstances of 1995, the government implemented firm stabilization policies that result in good overall macroeconomic performance. Growth in Cambodia Economy in the year 1995 was estimated as 7 per cent because of improved agricultural production, particularly in the production of rice. Stready growth in construction and services continued. Ostentation dropped from 26 per cent in 1994 to only 6 per cent in 1995. Due to the availability of external financing imports increased. Exports also increased, due to an increase in log exports. In regard to the budget, both the current and overall deficits were lower than originally targeted. After four years of maintaing steady macroeconomic performance, Cambodia's economy decelerated dramatically in 1997-98 because of the regional economic crisis, political infighting and civil violence.



Foreign investment and tourism also declared during this time. Again, the main harvest of 1998 was hit by drought. But in 1999, the first full year of peace in 30 years, progress was made on economic reforms and Cambodia Economy increased by about 4 per cent. The long-term development of the Cambodia Economy after decades of war remains a intimidating challenge. Most of the people lacks education and productive skills, particularly in the poverty-ridden countryside, which suffers from an almost total lack of basic infrastructure. Recurring political instability and corruption within government deter foreign investment and detain foreign aid. So long as political stability lasts, the Cambodian economy is likely to grow at a considerable stride.

The emerging economy of Cambodia has received strong international support. Cambodia's economy has been based primarily on agriculture. About 85 per cent of the cultivated area is dedicated to the production of rice. Cattle breeding is anaother important source of income of Cambodia.