Image Credits - Dezan Shira & Associates
Cambodia, located in Southeast Asia, is renowned for its ancient temples, including the iconic Angkor Wat, a UNESCO World Heritage site. Despite a tumultuous history marked by the Khmer Rouge regime, Cambodia is now striving for economic growth while preserving its cultural heritage and natural beauty. Delving into Cambodia’s economic heartbeat, this article explores the nation’s top five industries steering its growth. From the historic prominence of agriculture to the dynamic resurgence of tourism and the pivotal role of garment manufacturing, Cambodia’s economic landscape mirrors a compelling blend of tradition and modernity.
Major Industries in Cambodia
Garment Industry
The textile industry holds the dominant share in Cambodia’s manufacturing sector, contributing to 80% of the nation’s export revenue. In 2012, exports surged to $4.61 billion, marking an 8% increase from 2011. During the initial half of 2013, garment exports totalled $1.56 billion, sustaining the industry’s robust performance. Employing 335,400 individuals, predominantly women (91%), the sector primarily focuses on the final stage of garment production due to a limited textile manufacturing base. Despite concerns following the Multi Fibre Arrangement termination in 2005, Cambodia’s garment industry has not only endured but flourished, propelled by a receptive economic policy attracting substantial foreign investments.
Agriculture
Traditionally, agriculture has been the cornerstone of Cambodia’s economy, constituting 90% of GDP in 1985 and engaging around 80% of the labour force. The primary agricultural focus is on rice, a crucial commodity. Secondary crops encompass maize, cassava, sweet potatoes, groundnuts, soybeans, sesame seeds, dry beans, and rubber. Rubber stands out as the principal commercial crop, holding significant economic importance in the 1980s as a primary commodity, second only to rice, and a key source of foreign exchange.
Tourism
In the 1960s, Cambodia stood as a prominent tourist hub in Southeast Asia. However, prolonged periods of civil unrest, insurgencies, and the devastating Khmer Rouge regime virtually extinguished the country’s tourism industry. Since the late 1990s, tourism has undergone a remarkable resurgence, emerging as Cambodia’s second-largest industry, closely trailing garment manufacturing. In 2006, the sector contributed approximately 16% to the country’s GDP, generating a revenue of US$1.594 billion. Cultural heritage tourism centred around attractions like the historic Angkor Wat temple and the Royal Palace in Phnom Penh has become a focal point, aided by the development of crucial transportation infrastructure, including international airports in Phnom Penh and Siem Reap.
Gambling Industry
In Cambodia, gambling is officially prohibited under the 1996 Law on Suppression of Gambling, encompassing unauthorized forms with penalties ranging from fines to short prison terms. Surprisingly, the General Department of Prisons doesn’t list gambling among the offences punishable by imprisonment. This prohibition, including online gambling, applies exclusively to Cambodian citizens. Notwithstanding, the country hosts 75 casinos exclusively for foreign tourists, contributing an estimated US$29 million to the national government and $2 billion to the casinos in the first nine months of 2015. Gambling holds cultural significance in Southeast Asia, particularly Cambodia, where abstaining is sometimes perceived as unmasculine. Despite strict laws, illegal gambling is widespread, facilitated by a reportedly corrupt government that often turns a blind eye to locals entering casinos, even providing private rooms for government officials to engage in illicit gambling activities.
Construction
The surge in tourist arrivals has spurred a heightened demand for accommodations around popular tourist destinations, leading to a construction boom in Siem Reap and increased activity in Phnom Penh’s construction and real estate sector. Despite a recent slowdown in planned projects due to reduced foreign investment, the Cambodian government’s decision to permit foreigners to own condominiums since 2009 has attracted real estate investors from Thailand, Malaysia, Singapore, and other nations. The construction sector witnessed a substantial investment of $2.1 billion in 2012, marking a 72% increase from 2011, although the number of construction licenses issued in 2012 was 20% lower than in 2011, they held higher overall value.