Stone figure in the temple Ta Prohm near Angkor Wat, Cambodia

Cambodia A new start after decades of violence

Since its definitive liberation in 1999, Cambodia has made huge progress in terms of its development. Poverty has decreased significantly, and there have been enormous steps forward in healthcare, social protection and many other development areas such as literacy, life expectancy and nutrition. The country’s economy experienced a boom and is continuing to grow dynamically.

Straight to
Car ferry on the Mekong river, Cambodia

However, in order to safeguard these achievements in the long term, the government needs to introduce and follow through on a range of political reforms. It faces significant challenges in this regard, in particular in the areas of democracy, the division of powers and the rule of law, human rights, public administration, the justice system, the financial system and tackling corruption.

The COVID-19 pandemic, Russia’s war of aggression against Ukraine and the partial withdrawal of EU trade preferences have all played a part in slowing Cambodia’s economy. However, economic growth has picked up again since 2021, and the World Bank estimates growth of five per cent in 2022 with increasing momentum in the years to come.

The current situation in Cambodia is shaped by its recent history, which has been marked by war, civil war and tremendous human suffering. Cambodia was heavily bombed by the United States during the Viet Nam War. After that, from 1975 to 1979, about 25 per cent of the population fell victim to the reign of terror presided over by the Khmer Rouge. The country’s infrastructure was totally destroyed and practically the entire educated elite was wiped out. In 1979, Viet Nam occupied the country and liberated it from the Khmer Rouge, who mainly retreated to the peripheral regions where they launched a guerrilla war. It was not until 1993 that free elections once again took place. In fact the decades-long civil war only ended in early 1999, after the last of the Khmer Rouge fighters surrendered.

German development cooperation with Cambodia

Germany is supporting Cambodia as the country goes through a process of development and democratisation.

During government negotiations between Cambodia and Germany in May 2021, Germany committed a total of 57.8 million euros for development cooperation. The commitments consisted of 31.8 million euros for Technical Cooperation and 26 million euros for Financial Cooperation.

Germany’s development cooperation with Cambodia focuses on the following core areas:

  • Health, social protection and population policy
  • Sustainable economic development, training and employment
  • Climate and energy, just transition

Furthermore, the Federal Ministry for Economic Cooperation and Development (BMZ) is supporting the work of the Khmer Rouge Tribunal and funding reconciliation projects.

The two countries are also working together under the framework of the BMZ’s regional and global programmes, including the Special Initiative “Transformation of agricultural and food systems”, the “Pandemic prevention and control, One Health” project and the Civil Peace Service.

Cambodia also benefits from two globally oriented flagship projects by the German government aimed at protecting biodiversity: the Blue Action Fund promotes the development of a network of marine protected areas in Cambodia, and the Legacy Landscapes Fund supports the long-term protection of the Central Cardamom Mountains national park.

Sign of the department of health in Battampang province, Cambodia

Core area “Health, social protection and population policy” Access to healthcare and social protection for all Internal link

The economic growth of recent years has deepened social inequalities in Cambodia. Germany is supporting Cambodia in its efforts to expand its social protection system and improve the quality of healthcare.

Motorcycle on a road in Siem Reap, Cambodia

Core area “Sustainable economic development, training and employment” Promoting the local economy Internal link

The aim of cooperation efforts in this area is to lessen rural poverty. To this end, the BMZ is promoting value chains, supporting the expansion of infrastructure and vocational training, and also improving the general environment for innovation, investment and growth.

Electricity lines in Phnom Penh, Cambodia

Core area “Climate and energy, just transition” Improving power supply and protecting the climate Internal link

Electricity is very expensive in Cambodia compared with other countries in the region. This is slowing the country's economic development. On behalf of the BMZ, KfW Development Bank is helping to increase the reliability of Cambodia’s electricity supply and the efficiency of energy usage.

Current situation

A tuk tuk driver in Phnom Penh, Cambodia
Central market in Phnom Penh, the capital of Cambodia
Car ferry on the Mekong river, Cambodia

As at: 07/02/2023