Cambodia

Politics:

• Analysis

  Cambodia politics: Quick View - Cambodia ranks poorly in global corruption

  Event

  The 2012 Corruption Perceptions Index, published by Transparency International (TI) on December 5th, which ranks Cambodia 157th out of 176 countries, is the latest indication that the country continues to be riddled with graft.

  Analysis

  TI's latest survey on graft shows that Cambodia remains one of the most corrupt countries in the world, despite the government's pledges to clean up, the passage of the Anti-Corruption Law in 2010 and the establishment of an Anti-Corruption Unit (ACU). Although this year's TI ranking was a slight improvement compared with last year's position (164th), the non-governmental group warned that Cambodia was still perceived as a highly corrupt country.

  This was confirmed by the Global Competitiveness Index 2012-13, released by the World Economic Forum in September, which found that the number of survey respondents citing corruption as being among the top five problems for doing business in Cambodia had risen to 21.5%, from 16.8% in the previous year. Corruption ranked as the top challenge in the latest survey, well above issues such as inadequately educated workers and inefficient government bureaucracy.

  The enforcement of the Anti-Corruption Law is patchy at best and the ACU lacks the resources and backing (and perhaps the will) to investigate effectively high-profile corruption cases and bring them to court. The agency has made only four arrests since its inception in 2010, with its most high-profile prosecution being that of Moek Dara, the former head of the National Authority for Combating Drugs, who is currently serving life in prison on drug-trafficking and bribery charges. However, the prosecution of Moek Dara, who is also a former adviser to Chea Sim, the president of the Senate, may have had more to do with efforts by the prime minister, Hun Sen, to purge the upper-house leader's influence.

  Although there are signs that middle-class Cambodians and international donors are growing weary of the glacial pace of progress on corruption in the country, graft is the bedrock of the patronage networks that sustain much of Cambodian politics and business, and so substantive changes are unlikely in the short term.

  December 07, 2012

• Background

  Cambodia: Key figures

  Hun Sen

  Hun Sen, the prime minister and vice-chairman of the Cambodian People's Party (CPP), maintains a firm grip on power. He has headed the government for the past decade, since he launched a coup in July 1997 to bring to an end the power-sharing government with Prince Norodom Ranariddh, who headed the National United Front for an Independent, Neutral, Peaceful and Co-operative Cambodia (FUNCINPEC). Hun Sen defected from the Khmer Rouge before establishing the CPP in the late 1970s.

  Sam Rainsy

  As leader of, and dominant figure within, the eponymous opposition party, Sam Rainsy remains a leading critic of Hun Sen and his government. He was a former FUNCINPEC minister of finance and economy, before moving to form his own party.

  Prince Norodom Ranariddh

  Prince Ranariddh has seen his power base deteriorate over the past decade, since he was ousted from his position as “first prime minister” in the power-sharing government with Hun Sen in 1997. After being ousted as FUNCINPEC leader, in late 2006 Prince Ranariddh established his own party, the Norodom Ranariddh Party, in an effort to revive his political career, but his future role in politics is highly uncertain.

  King Norodom Sihamoni

  King Sihamoni acceded to the throne in October 2004, following his father's abdication. There were initial concerns expressed in some quarters about King Sihamoni's character and suitability, particularly concerning his ability to stand up to the country's powerful politicians. However, he has adapted well to his position as monarch, and has kept his pledge to maintain a neutral political stance.

  Chea Sim

  The chairman of the CPP plays the role of an elder statesman. He was formerly chairman of the National Assembly (the lower house of parliament) and is now president of the Senate (the upper house).

  Heng Samrin

  The CPP's honorary chairman became chairman of the National Assembly in March 2006.

  May 01, 2008

• Structure

  Cambodia: Political structure

  Official name

  Cambodia

  Form of government

  Constitutional monarchy

  The executive

  The cabinet is constitutionally responsible to the National Assembly (the lower house of parliament)

  Head of state

  King Norodom Sihamoni. The Throne Council selects the king

  National legislature

  The 123-seat National Assembly sits for a term of five years. The term of the 61-member Senate (the upper house) is six years

  National elections

  The most recent National Assembly election was held in July 2008. The most recent (indirect) election to the Senate took place in January 2012. The next lower house election will take place in July 2013. The next upper house election will be held in 2018

  National government

  Following the 2008 election, the Cambodian People's Party (CPP), which secured 90 seats in the lower house, formed a government, with the National United Front for an Independent, Neutral, Peaceful and Co-operative Cambodia (FUNCINPEC) as its junior partner

  Main political organisations and groups

  CPP; FUNCINPEC; Cambodia Democratic Movement for National Rescue (CDMNR, formed through a merger of the Sam Rainsy Party and the Human Rights Party); the Nationalist Party (NP, formerly the Norodom Ranariddh Party)

  Main government ministers

  Prime minister: Hun Sen (CPP)

  Deputy prime ministers:

   Sar Kheng (CPP)

   Hor Nam Hong (CPP)

   Bin Chhin (CPP)

   Sok An (CPP)

   Tea Banh (CPP)

   Nhiek Bun Chhay (FUNCINPEC)

   Men Sam An (CPP)

   Keat Chhon (CPP)

   Yim Chhay Ly (CPP)

  Key ministers

  Agriculture, forestry & fisheries: Chan Sarun (CPP)

  Commerce: Cham Prasidh (CPP)

  Economy & finance: Keat Chhon (CPP)

  Foreign affairs: Hor Nam Hong (CPP)

  Health: Mam Bunheng (CPP)

  Industry, energy & mines: Suy Sem (CPP)

  Information: Khieu Kanharith (CPP)

  Interior: Sar Kheng (CPP)

  Justice: Ang Vong Vattana (CPP)

  National defence: Tea Banh (CPP)

  Rural development: Chea Sophara (CPP)

  Tourism: Thong Khon (CPP)

  Central bank governor

  Chea Chanto

  December 10, 2012

• Outlook

  Cambodia: Key developments

  Outlook for 2013-17

  • The prime minister, Hun Sen, and the ruling Cambodian People's Party (CPP) will continue to dominate the political scene in 2013-17. The CPP controls over two-thirds of the seats in the lower house of parliament.
  • The apparatus of state will continue to be used against the government's opponents, such as the opposition leader, Sam Rainsy, who remains in self-imposed exile after being sentenced in absentia to a total of 11 years in prison.
  • Economic growth is estimated to have slowed to 5.8% in 2012, but will pick up to 6.4% in 2013 and 7% in 2014. Economic expansion will then average 7.1% a year in 2015-17.
  • The National Bank of Cambodia (the central bank) will seek to restrain growth in the money supply. However, the effectiveness of policy will continue to be hampered by the fact that the economy is highly dollarised.
  • The annual rate of consumer price inflation will accelerate to an average of 5% in 2013-17, from an estimated 3% in 2012.
  • The current-account deficit will remain substantial as a proportion of GDP in the forecast period, but continued foreign direct investment and healthy international reserves will limit the risk of financing difficulties.

  Review

  • At the Association of South-East Asian Nations (ASEAN) summit in November in the capital, Phnom Penh, a statement on the South China Sea released on behalf of the grouping was disputed by the Philippines.
  • On November 12th the lower house convened a forum to discuss how to protect and promote the rights of Cambodians working overseas.
  • At the forum on Cambodians employed abroad, a local representative of the UN Development Programme, Douglas Broderick, said that Cambodian migrant workers were often ill-treated.
  • On October 26th the European parliament became the latest organisation to criticise Cambodia for alleged human rights abuses and the government's clampdown on dissent.
  • The EU legislature urged the Cambodian government to stop forced evictions, called for an investigation into the country's controversial land-concessions policy and raised the prospect of economic sanctions.
  • The draft budget for 2013 sent to legislators in November includes a 17.3% rise in security spending, representing a faster increase than the planned expansion of 16.2% in total fiscal expenditure.

  December 10, 2012

Economy:

• Background

  Cambodia: Economic background

  Real gross domestic product by sector
  (% share of GDP)
  	2003	2004	2005	2006	2007
  Agriculture	32.0	29.5	30.8	30.1	28.8
  Industry	25.0	25.8	25.1	26.2	26.5
  Services	38.1	39.3	38.9	38.6	39.5
  Source: National Institute of Statistics; Economist Intelligence Unit.

  Download text file (csv format)

  May 01, 2008

• Structure

  Cambodia: Economic structure

  Data and charts: Annual trends charts

  
  

  

  December 10, 2012

• Outlook

  Cambodia: Country outlook

  Cambodia: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The Cambodian People's Party (CPP) will remain the country's dominant political force in the forecast period. The 1993 constitution established elections to the National Assembly (NA, the lower house of parliament) based on universal suffrage, but polls have become increasingly one-sided. At the 2008 general election the CPP tightened its grip on power, winning 90 of the 123 seats in the chamber. The ruling party secured 46 of the 57 indirectly elected seats in the Senate (upper house) poll in January 2012. It then won control of 1,592 of the country's 1,633 commune councils at local elections held on June 3rd. The CPP's election victories, coupled with the authoritarian tendencies of the prime minister, Hun Sen, and the government's harsh treatment of its opponents, have increased concerns that Cambodia is becoming a de facto one-party state with few checks on executive power. The death of the country's former monarch and prime minister, Norodom Sihanouk, in October drew attention to the fact that the deference that Cambodia's kings enjoyed is now accorded to the prime minister. In recent years the courts have upheld several convictions against prominent opposition figures, such as Sam Rainsy, the leader of the main opposition Sam Rainsy Party (SRP), who has been sentenced in absentia to a total of 11 years in prison. So far Sam Rainsy has chosen to remain in exile.

  ELECTION WATCH: The result of the next lower house election, due in July 2013, appears to be a foregone conclusion, with Hun Sen's CPP expected to achieve another victory and the ruling party likely to attain the two-thirds majority required to enable it to make changes to the constitution. In July the SRP and another opposition group, the Human Rights Party (HRP), announced their formal merger to create a new entity, the Cambodia Democratic Movement for National Rescue (CDMNR). The two parties have allied before, and the CDMNR looks unlikely to be able to overcome the CPP. But the merger may help the opposition to raise its parliamentary representation at the next poll. The SRP and the HRP won a combined 29 seats in the lower house in 2008 (26 for the SRP and three for the HRP), representing a modest improvement on their performance in the 2003 election. But their gains came at the expense of the two royalist parties, the National United Front for an Independent, Neutral, Peaceful and Co-operative Cambodia and the Norodom Ranariddh Party, rather than reducing the CPP's tally of seats.

  INTERNATIONAL RELATIONS: Rivalry between China and the US for influence in Cambodia is set to intensify in 2013-17. China has become an important partner for Hun Sen's government, mainly owing to its financing of major infrastructure projects. In contrast to US assistance, which is typically conditional on greater respect for human rights, China's assistance has come without such strings attached. China's influence was highlighted in July, when Cambodian officials in effect ended a summit meeting of the Association of South-East Asian Nations (ASEAN) rather than allow a position to be reached on disputed maritime claims between China and ASEAN in the South China Sea.

  POLICY TRENDS: Fiscal policy will remain broadly expansionary. According to the draft 2013 budget, state spending is expected by the government to increase by around 15% next year, to US$3bn. The National Bank of Cambodia (NBC, the central bank) will seek to restrain growth in the money supply, but the effectiveness of monetary policy will be hampered by the fact that the economy is highly dollarised. The 2009 global recession exposed Cambodia's structural economic vulnerabilities, and in particular its dependence on garment exports. The government has reacted by seeking to develop other sources of economic growth. As part of plans for Cambodia to become a major rice exporter, the authorities have set a target of exporting 1m tonnes of milled rice a year by 2015. At present Cambodia mainly exports raw paddy rice to neighbouring countries for processing. Drought has hit rice production and exports in 2012.

  ECONOMIC GROWTH: The Economist Intelligence Unit estimates real GDP growth in 2012 at 5.8%, a rate well below the annual expansion rates of around 10% recorded in the years preceding the 2008­09 global financial crisis. Growth has been supported by strong export-led manufacturing activity, but severe floods disrupted the economy in late 2011. The US and the EU's 27 member states together absorbed almost 70% of Cambodia's merchandise exports in 2011, according to IMF figures. Although we expect the US economy to expand by 2.1% in 2013, that of the EU is forecast to contract by 0.2%. In 2011 Cambodia's exports to the EU expanded rapidly owing to changes to the Everything But Arms agreement, which gives the world's least developed countries duty- and quota-free access to the European bloc. But in 2013 exports to the EU are likely to contract, while demand growth in the US will be tepid.

  INFLATION: In January 2012 consumer prices were up by 5.8% year on year, an acceptable inflation rate by local standards. Annual inflation has since fallen sharply, to stand at 1.4% in September, thanks to weaker food price inflation and a decline in transport costs. As a result, we expect average consumer price inflation to slow from 5.5% in 2011 to 3% in 2012. Global oil prices (dated Brent Blend) are likely to remain stable in the next five years on an annual average basis, at US$100-115/barrel, and this should help to contain inflationary pressures in Cambodia. Prices for many non-oil commodities, notably grains, are expected to stabilise on average in 2013-17. This too should contribute to keeping inflation in check, although inclement weather in the US and Brazil has increased the risk of a renewed surge in prices for many food commodities in the coming quarters. In 2013-17 we expect Cambodia's annual rate of inflation to accelerate to 5% on average, as upward price pressures will increase in line with stronger domestic demand.

  EXCHANGE RATES: The NBC has accumulated substantial foreign-exchange reserves in recent years, and it will intervene periodically to support the riel. Although the relatively wide deficit on the current account exerts downward pressure on the riel's value, the local currency will be supported in the forecast period by inflows of foreign assistance and foreign direct investment, and it will therefore appreciate modestly in 2014-17. However, given the continuing lack of confidence in the riel, the US dollar will remain the currency of choice in Cambodia for trade and investment.

  EXTERNAL SECTOR: The merchandise trade deficit will remain substantial in 2013-17, owing to Cambodia's reliance on imported capital goods. After expanding modestly in 2012, merchandise exports and imports are likely to pick up momentum in the second half of 2013 as demand from the US recovers. From 2014 healthier global economic conditions will also support international trade. There will be a rise in demand for imported trade-related services, such as insurance and freight, but the services account will remain in surplus thanks to rising tourism revenue. The income deficit will widen slightly in the forecast period, as the repatriation of profits and dividends by foreign-invested companies will more than offset the increase in returns on Cambodia's foreign-exchange reserves that will result from a rise in global interest rates from 2015. The current-account deficit is expected to narrow in the forecast period, to stand at the equivalent of 5.7% of GDP in 2017, compared with an estimated shortfall of 10.7% in 2012.

  December 07, 2012

• Forecast

  Cambodia: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growth	5.8	6.4	7.0	7.0	7.2	7.2
  Gross agricultural production growth	6.0	5.5	5.8	6.0	6.2	6.2
  Consumer price inflation (av)	3.0	4.7	4.9	5.1	4.9	5.5
  Base lending rate	13.1	14.3	15.3	16.2	16.3	16.3
  Central government balance (% of GDP)	-5.1	-5.1	-4.8	-4.4	-4.1	-3.9
  Exports of goods fob (US$ bn)	6.1	6.7	7.5	8.7	10.0	10.8
  Imports of goods fob (US$ bn)	-8.8	-9.5	-10.6	-11.7	-13.1	-14.4
  Current-account balance (US$ bn)	-1.5	-1.5	-1.5	-1.4	-1.4	-1.7
  Current-account balance (% of GDP)	-10.7	-9.7	-8.3	-6.3	-5.6	-5.9
  Exchange rate CR:US$ (av)	4,059	4,053	4,077	4,048	3,986	3,942
  Exchange rate CR:US$ (end-period)	4,039	4,064	4,072	4,036	3,964	3,920
  Exchange rate CR:¥100 (av)	5,086	5,104	4,936	4,668	4,325	4,313
  Exchange rate CR:€ (end-period)	5,226	5,242	5,110	4,984	3,149	3,122
  a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts. c Actual.

  Download the numbers in Excel

  Download text file (csv format)

  November 01, 2012

View detailed map

Country Briefing

Land area

181,035 sq km

Population

15.1m (IMF estimate for mid-2010)

Main towns

Population in '000 (2008 census)

Phnom Penh (capital): 1,325.7

Battambang: 1,024.7

Climate

Tropical; rainy season, May-October; dry season, November-April

Weather in Phnom Penh (39 ft above sea level)

Hottest months, March-April, average daily temperature 27°C (daily maximum 32-40°C); coldest month, January, average daily temperature 25°C; wettest month, October, 256 mm average rainfall; driest month, January, 8 mm average rainfall

Language

Khmer

Measures

Metric system. Local measures include:

1 tao = 15 kg

1 thang = 40 litres (20-22 kg paddy)

1 hap = 60 kg

1 king (or ray) = 0.16 ha

1 chi = 3.75 g

1 damloeng = 37.5 g

Currency

Riel (CR). Average exchange rate in 2010: CR4,185:US$1

Fiscal year

January 1st-December 31st

Time

7 hours ahead of GMT

Public holidays

January 2nd (International New Year's Day); January 7th (Liberation Day); February 7th (Meakkha Bochea); March 8th (International Women's Day); April 13th-15th (Cambodia New Year); May 1st (Labour Day); May 5th (Visak Bochea); May 9th   (Royal Ploughing Ceremony); May 13th-15th (King   Norodom Sihamoni's birthday); Children's Day (June 1st); June 18th (king's mother's birthday); September 24th (Constitution Day); October 14th-16th (Pchum Ben); October 29th (King's  Coronation Day); October 31st (king's father's birthday); November 9th (Independence Day); November 27th-29th (Water Festival); December 10th (International Human Rights Day)

March 01, 2012