1. Overview

The Kingdom of Cambodia, with an area of 181,035 square kilometers, is located in South East Asia, on the south-western part of the Indochina Peninsula. The country's maximum extent is about 580 km (east-west) and 450 km (north-south). It is bordered by Thailand on the west and north-west, by Lao PDR on the north, and by Vietnam on the east and south-east. Cambodia is bounded by the Gulf of Thailand on the south- west with a coastline that is 435 kilometers long.

Cambodia is known for its cultural heritage and the impressive Angkor temples represent the country's major tourist attraction, with some one million visitors expected in 2002. The temples were 9th and the 13th century and administrative Khmer Kingdom.

Situated between the Tropic of Cancer and the Equator, Cambodia has a tropical climate with two distinct seasons: the dry monsoon season from November to May and the humid, rainy monsoon season from June to October. Annual average temperature varies between 21 to 35 degrees Celsius, often reaching over 40 degrees in April, the hottest month. The landscape is dominated by the large Tonle Sap (Great Lake), as well as the Mekong and Bassac rivers that run through the country's Central Plain. While some 75 percent of the country is flat, the more densely forested and sparsely populated highlands comprise the Cardamom Mountains in the southwest, including the country's highest mountain (Phnom Aural. at 1,771 meters) and the Dangrek Mountains in the north, along the Thai border. Administratively, the country is divided into 20 provinces, four municipalities, 183 districts, 1,621 communes, & 13,406 villages.

Cambodia is now a member of most international organizations. In 1999, Cambodia became a full member of the Association of Southeast Asian Nations (ASEAN) and joined AFTA (ASEAN Free Trade Agreement). To be fully integrated in the world economy, Cambodia become a member of the World Trade Organization (WTO) in September 2003.

2. Demography

The population number in 2001 has increased at 13,099,472 comprising 6,348,112 males and 6,751,360 females. The majority of the population is rural, with only 15 percent residing in urban areas. Cambodia's capital is Phnom Penh, with a population of 1,184,945. With an estimated annual growth rate of 2.4 percent, the population is expected to double within less than 30 years. 54.8% of the population is under the age of 20 and 72% of the male population is under 30. With relatively fewer adult men, about a quarter of Cambodia's households are headed by women. The population is predominantly Khmer (about 90%), with minorities made up of Chinese, Vietnamese, and Malay Muslims, along with some highlander from various tribal origins. The official language is Khmer. There is some use of French and English. French tends to be understood mainly by older people while English is more commonly understood by the younger generation. Theravada Buddhism is the religion of virtually all of the ethnic Khmer and of about 95 percent of the population.

3. Economy

Cambodia is one of the poorest countries in the world. In 1999 its GNP was US$ 3.1 billion and its GNP per capita US$ 260, compared to an average GNP per capita of US$ 1,000 in the East Asia and Pacific Region. Thirty six percent of the population lives below the poverty line and 90 percent of the poor are in rural areas. The Cambodian economy is largely based on the primary sector (fishing, farming, and forestry), which employs 82 percent of the workforce. The industrial infrastructure of the country is poorly developed and the sector accounts for only three percent of employment. Services account for the remaining 15 percent of the labor force. In 1999 the primary sector represented 50 percent of the total GDP, services amounted to 35 percent and industry accounted for 21 percent. The industrial sector is likely to have a growing impact on the economy since its annual average growth has been some ten percent since 1990, compared to two per cent for the agricultural sector and eight percent for the service sector.

After many years of war and internal conflict, a stabilizing political environment has led to an improved economic performance and the economy has been growing slowly but steadily in the last few years. Economic growth was five present in1999, four percent in 2000 (despite that year's devastating floods) and is projected to be 5.5 percent in 2001. Cambodia's most important exports include garments, processed wood, natural rubber, tobacco, and rice.

Its main markets are Thailand, USA, Singapore, and China. Forestry could be a major income for the government but illegal logging is estimated to have cost the government US$ 60 million in 1997 (two percent of GDP). Deforestation is also a threat to the environment, and efforts are being made to balance the country's natural resources as well as the revenues they could generate.

Average annual inflation dropped to four percent in 1999, compared to almost 15 percent in 1998. At 74 percent of GNP (US$ 2.3 billion) in 1999, total external debt was down from 79 percent in 1998, and 160 percent in 1989. Foreign aid of US$ 24 per capita in 1999 remains a major source of foreign currency in Cambodia. A major problem the country faces is the lack of a private sector. One of the biggest barriers to private investment is an often unpredictable and unstable regulatory framework. The government sector is thus a major target for reform in Cambodia. The country suffers from corruption and the lack of tax and customs enforcement. Tax revenues represent only six percent of the country's GDP.

The government has started to implement different measures to fight corruption, improve the transparency of the public sector and strengthen the legal and judicial system and reforms. Entry to the Association of South East Asian Nations (ASEAN) is likely to have a positive influence on the political as well as economic situation. According to the Asian Development Bank, "Cambodia has made considerable progress in implementing liberalization measures and structural reform in the past few years".