Economy of Cambodia

The garment industry represents the largest portion of Cambodia's manufacturing sector, accounting for 80% of the country's exports. In 2012, the exports grew to $4.61 billion, up 8% over 2011. In the first half of 2013, the garment industry reported exports worth $1.56 billion. The sector employs 335,400 workers, of which 91% are female. The sector operates largely on the final phase of garment production, that is turning yarns and fabrics into garments, as the country lacks a strong textile manufacturing base. Cambodia's garment industry at present continues to grow rapidly. This can be attributed to the country's open economic policy which has drawn in large amounts of foreign investment into this sector of the economy. This monitoring has allowed Cambodia to secure its share of quotas for exports to the US through the US-Cambodia Trade Agreement on Textiles and Apparel (1999-2004), which linked market access to labor standards. GMAC is establishing a specialized training institute to train garment workers. The institute, located in the Phnom Penh Special Economic Zone, aims to train 1,600 garment workers in the first three years and 240 university students each year as part of a separate program.

In 2006, Cambodia's tourism sector generated a revenue of US$1.594 billion, which made up approximately 16% of the country's GDP. Cultural heritage tourism is especially popular in the country, with many foreign tourists visiting the ancient Hindu temple of Angkor Wat located in the Siem Reap province. Other popular tourist attractions include the Royal Palace, Phnom Penh, as well as ecotourism spots such as Tonlé Sap Lake and the Mekong River. The tourism industry in Cambodia has been perpetuated by the development of important transportation infrastructure; in particular, Cambodia's two international airports in Phnom Penh and Siem Reap. To the Cambodian economy, tourism has been a means for the accumulation of foreign currency earnings and employment for the Cambodian workforce, with about 250,000 jobs generated in 2006. Meanwhile, challenges to the industry include leakage of revenue to foreign markets due to a dependence on foreign goods and the prevalence of the child sex tourism industry.

Gambling in Cambodia is officially illegal under the 1996 Law on Suppression of Gambling, which outlawed all unauthorized forms of gambling and provided for penalties ranging from monetary fines to short prison sentences, although the Cambodian government's General Department of Prisons does not list gambling as one of the 28 offenses punishable by imprisonment. The prohibition on gambling, which also extends to all forms of online gambling, only applies to Cambodian citizens. As of October 2015, there were 75 casinos catering to foreign tourists operating within Cambodia, providing an estimated US$29 million in revenue to the national government in the first nine months of the year and $2 billion in income for the casinos. Cambodian citizens are allowed to gamble through government-sponsored gaming, including five separate privately run national lotteries.

The increase in tourist arrivals has led to growing demand for hotels and other forms of accommodation surrounding tourist hotspots. Siem Reap in particular has seen a construction boom in recent years. The capital, Phnom Penh, has also witnessed a growth in the construction and real estate sector. The construction sector attracted investment of $2.1 billion in 2012, which is a 72 percent rise compared with 2011. Construction licenses issued stood at 1,694 projects in 2012, which was 20% lower than 2011 but they were higher in value.

Cambodia's emerging democracy has received strong international support. Under the mandate of the United Nations Transitional Authority in Cambodia (UNTAC), $1.72 billion was spent in an effort to bring basic security, stability, and democratic rule to the country.

There are no significant barriers to bank entry. At the end of 2013, there stood 35 commercial banks. Since 2011, new banks with offshore funding have begun to enter the market.

Cambodia has significant potential for developing renewable energy and could potentially run its energy system on 100% renewable sources. The country, however, remains one of the few countries in the ASEAN region that has not adopted renewable energy targets. To attract more investment in renewable energy, Cambodia could adopt targets, improve renewable energy governance, develop a regulatory framework, improve project bankability, and facilitate market entry for international investors.