Following a decade of strong economic growth, socio–economic development, and poverty reduction, the Global Financial Crisis (GFC) and associated regional economic downturn in 2008–09 had a severe impact on Cambodia's economy, exposing its vulnerability due to the narrowness of its economic base and its reliance on European and North American export markets. While annual GDP growth has now recovered to levels of 6–7 per cent, the vulnerability remains, with a shared imperative by the Cambodian government, the private sector, investors and development partners to work together for the diversification of the economy. The experiences of 2008–09, despite their severity, also provided useful lessons for policy–makers. I am pleased to introduce this volume which provides an independent analysis of the impact of the crisis on Cambodia and a deeper understanding of the Cambodian economy, its strengths and weaknesses, and policy challenges for the future.
Since 1993, the Cambodian economy has undergone a dramatic and rapid transformation. The traditional economy, based on agriculture, is now driven increasingly by the industrial and the tertiary sectors. With the return of peace and stability in the late 1990s, a sense of confidence and pride pervades the country. All Cambodians now share a common vision of sustained economic growth with employment and a secure future for all. The government's strategy is to help realize this vision by reinforcing Cambodia's comparative advantages both regionally and internationally. In the era of globalization the fortunes of all countries in the world are intertwined; autarchy is not an option for sustained high economic growth for a small sized economy as Cambodia. Hence Cambodia's continued economic success will depend on full market access for its products and the cooperation of its development partners.
Cambodia had to rebuild itself virtually from scratch after the defeat of the Khmer Rouge regime. At the very outset, the country had to face the harmful consequences of the international economic embargo imposed in 1979.