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$1,130 in 2014. 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. 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.
Trade Agreements
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.
Market Opportunity
Cambodia offers potential investment opportunities in various sectors including: tourism in both natural and recreational areas; education; construction; household products; agriculture and agribusiness; automotive; energy; retail stores and restaurants; and health care. You can find out more at U.S. Embassy in Cambodia or download details here.
(Excerpted from Cambodia.USembassy.gov)