Cambodia is a developing market economy that grew at an average rate of over seven percent in the last decade, driven largely by an expansion in the garment sector, construction, agriculture, and tourism. In 2014, the economy grew by an estimated seven percent and it is expected to continue to grow at a similar rate over the next two years. Per capita GDP increased from US$367 in 2003 to US$1,269.9 in 2016. As of 2012, the percentage of the population living below the poverty line was 17.7 percent (poverty line was US$1.20 per person per day), a three percent decrease from 2011.
Since Cambodia became the first least-developed country (LDC) to join the World Trade Organization (WTO) in 2004, trade has steadily increased. The United States is one of Cambodia’s largest trading partners. Approximately 33 percent of Cambodia’s total exports are destined for the United States – primarily garment and footwear products. In 2014, Cambodian exports to the United States were valued at US$2.84 billion. For the same year, U.S. exports to Cambodia were US$328 million .
Cambodia‘s rapidly expanding tourism industry is led by the spectacular cultural attraction of Angkor Wat. In 2015, the Angkor Wat temple complex, a UNESCO world heritage site, was voted as the best tourist destination in the world by Lonely Planet, and by Trip Advisor in 2017. With approximately 4.5 million foreign arrivals in 2014, an increase of 12.5 percent compared to 2013, tourism has increased more than twenty-fold since 1998 when Cambodia received a modest 187,000 tourists. It is estimated that international arrivals will reach 7 million annually by 2020. In 2011, Cambodian coastal areas were recognized for their natural beauty by the Club of the World’s Most Beautiful Bays.
Despite rapid growth in garments and tourism, Cambodia remains an agrarian society, with over half the population engaged in the agriculture sector. Donors have been a driving force behind the development efforts of Cambodia with financial support accounting for more than 30 percent of the government budget. The United States is one of Cambodia‘s largest donors and official U.S. assistance amounted to around US$122 million in 2014.
Foreign investment in Cambodia, which has increased significantly since 2004, has been led by Asian investors from countries such as China, Japan, South Korea, Malaysia, Thailand, and Vietnam. Approved foreign investment proposals by the Council for the Development of Cambodia totaled around US$264 million (184 projects) in 2014. The Cambodian government currently offers a generous package of incentives to foreign investors and imposes few restrictions on imports from abroad. Investment incentives available to foreign investors include 100 percent foreign ownership of companies, corporate tax holidays of up to eight years, 20 percent corporate tax rate after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation.
Cambodia joined the International Organization for Standardization (ISO) in 1995 and is also a member of the ASEAN Consultative Committee on Standards and Quality (ACCSQ). Cambodia ratified the ASEAN Framework Agreement on Mutual Recognition Arrangements. It has also signed numerous trade agreements, including the U.S.-Cambodia Trade and Investment Framework Agreement (TIFA) in 2006, which facilitates and promotes greater trade and investment between the two countries and provides a forum to address bilateral trade and investment issues. Two successful meetings were held under the TIFA in 2007 in which the U.S. and Cambodian governments discussed WTO accession requirements, trade facilitation and economic development initiatives, and progress on intellectual property rights. In 2008, several bilateral working level meetings were held to advance the TIFA agenda.
Cambodia offers potential investment opportunities in various sectors including: tourism in both natural and recreational areas; education; construction; household products; agriculture and agribusiness; automotives; energy; retail stores and restaurants; and health care.
- Tourism infrastructure and resorts
- Education services
- Architecture, construction, and engineering services
- Household goods and appliances
- Agribusiness and food processing
- Used cars and automotive parts
- Power generation equipment
- Fast food and beverage franchises
- Pharmaceuticals, medical Supplies, and medical equipment
- Health care services
Cambodia at a Glance
Location: Mainland Southeast Asia between Thailand to the west and north and Vietnam to the east and southeast. It shares a land border with Laos in the northeast
Land Area: 181,035 sq. km. (69,900 sq. mi.); about the size of Missouri.
Climate: Tropical monsoon with rainy season from June to October, and dry season from November to May.
Population: 15.76 million (2016, Source: World Bank)
Languages: Khmer (official) spoken by more than 95 percent of the population; some French still spoken in urban areas; English increasingly popular as a second language
Religion: 97% Buddhist
Real GDP Growth Rate: 6.9 percent (2016, Source: World Bank)
GDP Per Capita: US$1,269.9 (2016 Source: World Bank)
GDP by Sector: Agriculture: 29.70 percent; Industry: 25.31 percent; Services: 39.21 percent (2014 estimate, MEF)
Main Drivers of Exports: Garment products and rice
Government Type: Multi-party democracy under a constitutional monarchy