Cambodia Cambodia finally experienced its first year of peace in over 30 years. This may look attractive to many investors. In this profile report, Cambodia’s demographics, economy, political environment, investment laws, socio-cultural risk, and technological environments will be discussed.
Demographics
· Poor and young population
The EUI estimates the population was around 11.3 million in 1998 based on a UN Population Fund/ Cambodian government survey in December 1996. Estimates for this country take into account the effects of excess mortality due to AIDS; this can result in lower life expectancy, higher infant mortality and death rates, lower population and growth rates, and changes in the distribution of population by
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· Garments, Construction & Tourism
Garments will remain the main industry, although new sectors are emerging such as agro-processing (EUI Country Report 2000). Cotton factories supplying the garment industry have been established in recent months (EUI Country Report 2000). In the service sector, growth will be driven by tourism, which hit record highs in 1999, and is forecast by the government to grow by 35% in 2000 (EUI Country Report 2000). As a result higher growth in construction will follow (EUI Country Report 2000). Agriculture is the least predictable component due to bad weather pests (EUI Country Report 2000).
· Macroeconomic stability
Cambodia is currently experiencing minimal inflationary pressures. The inflation rate averaged 5.6% because of the weak demand following the 1997-98 economic downturn. The good 1999-2000 harvest will keep food prices down this year. In 1999 the riel was largely stable. During 2000-01, there is no expected change.
· Recovery of Private Investment
Private foreign and domestic investment fell by 44.8% in 1999, because of the Asian financial crises and precautions taken as to whether political stability was likely to be maintained (EUI Country Report 2000). When both factors improve, private investment is likely to strengthen during 2000-01. Red tape, corruption and hidden costs are
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