Car ferry on the Mekong river, Cambodia

Economic situation Stable growth, loss of biodiversity

Accession to international organisations such as the Association of South East Asian Nations (ASEAN, 1998) and the World Trade Organization (WTO, 2004) put an end to Cambodia’s economic isolation. In recent years, the country has experienced economic growth of about seven per cent. Cambodia’s economy declined by 3.1 per cent in 2020 due to the effects of the COVID-19 pandemic.

The World Bank predicts increasing growth in the coming years, though not on the same scale as before the pandemic. The most important economic sectors are agriculture, textiles and shoe production, the construction industry and tourism.

Cambodia’s economic structure has undergone major changes since the start of the 1990s: agriculture has been declining in terms of importance and now accounts for just 23 per cent of gross domestic product. Meanwhile, the services sector now accounts for more than a third of economic activity.

Massive loss of rain forest

Although official legislation meant to protect the environment exists, implementation of the legal provisions is inadequate. For example, approval is granted for dam projects on the Mekong River and concessions are awarded for large-scale logging activities, without adequate consideration being given to the sometimes serious damage being caused to the environment. A further problem is the illegal logging of and trade in tropical timber, in which influential members of the business community and the military are also involved.

In 2020, only around 45 per cent of the country was still covered by forest. This is compared to 61 per cent forest cover back in 2000.

As at: 07/02/2023