Opportunity and Challenges in Development in Cambodia

Presenters: NGOV Penghuy and Chan Sokyeng

June 25th

Prof. Otsubo’s Undergraduate Class

Where is Cambodia?

Angkor Wat in Cambodia

Phnom Penh

A glance on Cambodia

• Population: 14.2 million (2006)• Area: 18,1035 Km2

• GDP Per Capita (Nominal): 512 USD (2006)• GDP Per Capita (PPP): 2,727 USD (2005)• Inflation: 3.6 per cent (2002-2006 average)• Adult Literacy Rate: 73.6 (2005)• Life Expectancy: 58.0 (2005)

Structure of Output

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20060%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Agriculture Industry Services

Service

Industry

Agriculture

Sectoral Growth Rate

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006-5

0

5

10

15

20

25

30

35

Agriculture Industry Services GDP

Basic Macroeconomic Data2004 2005 2006

Saving-Investment Balance

Gross national saving 15.6 15.8 19.5

Gross investment 17.7 20.1 21.5

General Government Budget

Total revenue 10.3 10.3 11.5

Total expenditure 14.9 13.7 13.5

Balance of Payment

Exports of goods 46.2 44.2 48.8

Imports of goods 64.1 65.6 68.8

External debt

Outstanding Debt (%GDP) 38.5 33.9 31.0

Debt Service (Mn USD) 68 69 69

(in percent of exports of good and service) 1.5 1.3 1.1

Characteristics of Cambodian Economies

1. Dollarized economy. 2. Aid-dependence.3. Around 80 of population engages in agriculture

and makes up about 40 per cent of GDP.4. FDI-led growth: garment sector as growth

engine.5. Angkor Wat as tourism site.6. Construction boom (in the last few years).

Garment: Fast Growing Industry

1. Employment: 400,000 jobs in total and absorb some 30,000 jobs per year.

2. Jobs in garment sector help alleviate poverty of workers and families.

3. Exports of garment products account for approximately 80 per cent of total export.

Commuting to Work

Workplace

Angkor Wat as core tourist site

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20050

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Total Number of Tourists

Angkor Wat

Opportunities

1. Oil Reserve (?)2. FDI-led growth3. Garment Sector as Growth Engine4. Hydro-electric power plant (9 plants by

2019?)5. Improvement in financial market

Challenges

1. Environmental Problems2. Widening gap between the rich and the poor3. Sky rocketing in real estate price recently

land grabbing the poor becomes worse-off4. National Program for Administrative Reform

(NPAR): Civil Service Reform5. Low domestic technological accumulation

leads to slow technological absorption from outside.

Questions ?