Industries in Cambodia (excluding extractive industries and mining) are mostly within the garment, agricultural, construction and tourism sectors.
The Royal Government of Cambodia has set directions to transform Cambodia into a middle-income economy by 2030 and high-income country by 2050, as mandated in the National Strategic Development Plan for 2014-2018. The directions emphasize the role of industry and small and medium enterprises as a key driver of future growth.1 The government prepared and adopted an Industrial Development Policy (IDP) in March 2015 as a guide to provide systemic solutions to developing a competitive industrial sector in Cambodia.2
Key industries include garment and light manufacturing, food and beverage processing, construction and real estate, tourism, as well as the emerging mining and exploration industry (see Extractive industries for detail of mining and exploration).
The manufacturing sector accounted for 24 percent of Cambodia’s GDP from 1998 to 2013, and has been growing at 12.4 percent per annum compared to 4.7 percent for agriculture and 8.5 percent for the service sector.3 Cambodia’s light manufacturing assembly sector, located primarily but not exclusively in special economic zones, covers principally labor-intensive operations. The government noted that Cambodian industries remain weak through having a narrow base, low level of technological sophistication, low value segmentation and concentration in a few sectors. The production of construction materials, electronics, machinery, engines, and chemical products is still small.4
The garment sector continues to be Cambodia’s key engine of growth. Figures from the General Department of Customs and Excise show garment and footwear exports reached US$ 1.8 billion in the first quarter of 2016.5 This was 14.5 per cent greater than the same period in 2015.
Garments are Cambodia’s main export goods, accounting for nearly 80 percent of the country’s merchandise exports.6 Three out of four dollars that come into the country via export revenue are generated by the garment industry.7
The agriculture sector contributed about 36 percent to Cambodia’s GDP in 2013. However food and beverage processing has declined from 32.7 percent in 1993 to 10 percent in the period 2008–2012.8 As part of the government’s policy to support the agriculture industry, materials and equipment used in agricultural production are exempt from import duties. The government hoped these policies would increase milled rice exports to one million tonnes by 2015, but that goal was not met.9 Rice milling is an emerging industry.
Cambodia is experiencing a property boom. According to a World Bank report, construction overtook agriculture and tourism as the second largest growth driver in 2014. This has been reflected by the $2.5 billion in construction permits approved by the Ministry of Land, Construction and Urbanization and the $258 million fixed assets investment in tourism sector approved by the Council for Cambodian Development.10 However, the lack of construction regulations remains a concern.11
Tourism is a significant and growing part of the Cambodian economy. The tourism sector contributed (directly and indirectly) about one-third of Cambodia’s GDP in 2014. The sector directly accounted for more than 11 percent of the countries employment in 2014, generating 985,500 jobs in tourism and travel, and an estimated 2.2 million jobs indirectly.12 Domestic tourist numbers were estimated at 10 million in 2016.13 This shows a doubling over 10 years according to statistics from the Ministry of Tourism. The growth rate is estimated at 5–7 percent a year.14
- 1. Ministry of Planning. “National Strategic Development Plan 2014-2018.” Accessed 23 September 2015. http://countryoffice.unfpa.org/cambodia/drive/NSDP2014-2018.pdf
- 2. Council of Ministers. “Cambodia Industrial Development Policy 2015–2025.” Accessed 23 September 2015. www.cambodiainvestment.gov.kh/content/uploads/2015/09/IDP-English-Version-FINAL1.pdf
- 3. Ibid
- 4. Ibid
- 5. ILO, August 2016. Cambodian Garment and Footwear Sector Bulletin, Issue 4, August 2016. International Labour Organization.
- 6. Ly, Sodeth; Aldaz-Carroll, Enrique. 2014. “Cambodia economic update: Clear skies.” Cambodia economic update. Washington, DC: World Bank Group. Accessed 9 January 2015. http://documents.worldbank.org/curated/en/2014/10/20260732/clear-skies-cambodia-economic-update
- 7. Asuyama, Y., & Neou, S. (2012). How has the Cambodian garment industry evolved? In “Dynamics of the garment industry in low-income countries: Experience of Asia and Africa (interim report), Chiba: Institute of Developing Economies.”
- 8. National Institute of Statistics. (2013). Cited in “Industrial Development Policy 2014-2024 (draft)”, hosted on Sciaroni & Associates website. www.sa-asia.com/home/alert_perspective/pdf/industrial_development_policy_2014to2024.pdf
- 9. US Department of State. (2014). “2014 Investment Climate Statement.” Accessed 9 January 2015. www.state.gov/documents/organization/228917.pdf
- 10. Ibid
- 11. Kang Sothear & George Styllis. “Lack of construction regulations a concern,” The Cambodia Daily, published on 02 October 2014. Accessed 9 January 2015. www.cambodiadaily.com/business/lack-of-construction-regulations-a-concern-68862/
- 12. World Travel and Tourism Council. “Travel & tourism: Economic impact 2015 Cambodia.” Accessed 15 October 2015. www.wttc.org/-/media/files/reports/economic%20impact%20research/countries%202015/cambodia2015.pdf
- 13. Hang Sokunthea, 2016. “Domestic Tourism Nearly Doubles in 10 Years”, The Cambodia Daily, 29 December 2016.
- 14. Ibid