Cambodia is one of the world’s poorest nations. In 1999 its total gross domestic product (GDP) was $3.1 billion, yielding a per capita GDP of just $270, among the lowest in the world.
Even before being plunged into civil conflict in the 1970s, Cambodia lacked significant industrial development, with most of the labor force engaged in agriculture. The country was self-sufficient in food and produced exportable surpluses of its principal crops of rice and corn. In spite of relatively low yields and a single harvest per year, Cambodia annually exported hundreds of thousands of tons of rice.
Cambodia's economy was one of the least-developed of the Southeast Asian region. It was heavily dependent on two major products—rice and rubber—and consequently was vulnerable to profound annual fluctuations caused by vagaries in the weather and world market prices. Agriculture dominated the economy, with most rural families engaged in rice cultivation. Although the tradition of landownership was strong, family landholdings were relatively small. But, even with small family farms, the rural population was largely self-sufficient. Two and a half acres (one hectare) of rice paddy provided for the needs of a family of five people, and supplementary requirements were traditionally satisfied by fishing, cultivating fruit and vegetables, and raising livestock. Famine was rare in Cambodia, but the self-sufficiency of the rural family produced a conservatism that proved resistant to government efforts before 1975 to modernize the country's primitive agricultural methods.
Cambodia's economy slowed dramatically in 1997-98 due to the regional economic crisis, civil violence, and political infighting. Foreign investment and tourism fell off. In 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 4%. GDP growth for 2000 had been projected to reach 5.5%, but the worst flooding in 70 years severely damaged agricultural crops, and high oil prices hurt industrial production, and growth for the year is estimated at only 4%. Tourism is Cambodia's fastest growing industry, with arrivals up 34% in 2000. The long-term development of the economy after decades of war remains a daunting challenge. The population lacks education and productive skills, particularly in the poverty-ridden countryside, which suffers from an almost total lack of basic infrastructure. Fear of renewed political instability and corruption within the government discourage foreign investment and delay foreign aid. On the brighter side, the government is addressing these issues with assistance from bilateral and multilateral donors.
