Cambodia has grown significantly since the 1970s Khmer Rouge tragedy, particularly within the last two decades. UN-sponsored elections in 1993 helped restore some semblance of normalcy, as did the rapid diminishment of the Khmer Rouge in the mid-1990s. There has been high economic growth, increasing FDI and decreased poverty. Main development priorities of Cambodia include health and education, and corruption is a major obstacle. The robust economic growth has lifted five million people out of poverty during the past decade and Cambodia’s poverty rate had been reduced to 14 percent, down from 53.2 percent in 2004.
Undeniably, improved governance and democratic reforms have significantly contributed to this achievement. In particular, the 2013 election results have prompted the government to address a number of problems such as the elite-spawned land-grabbing, underpayment of factory workers and teachers, tax evasion by the corporate sector and soaring electricity prices. It is the government’s ambition to transform Cambodia into a middle-income country by 2030 and a high-income country by 2050.
Since 1990, Cambodia has been a major benefactor of global aid, with annual receipts increasing from US$300 million in 1993 to more than US$800 million dollars by 2012. While two decades of aid significantly contributed to the country’s development, the constant inflow of aid money also fuels Cambodia’s persistent problems, including corruption, weak institutions, poor governance, a donor-dependent aid industry absorbing a skilled workforce, and a mindset of aid entitlement.
Cambodia, on the other hand, is expected to sustain its growth into 2016 thanks to low oil prices and increased exports, in particular to the members of the ASEAN Economic Community (AEC). The AEC, with a combined GDP of US$2.6 trillion in 2013, is expected to become an economic powerhouse in the Asia Pacific region in the near future.