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Preface
At the time of the very beginning of the financial crisis in the US, some economists claimed that
Cambodia would not be much affected by the world financial crisis because Cambodian economy has not
had specific relations with the relations with the regional and international economy. On the contrary, in
Cambodia now, homes have been lost; jobs shed; businesses shut and our health care is too costly because
of the financial crisis in the US and no effective measures. That’s why we the year-2 students studying
Economic Science in Royal University of Law and Economics have made a small group to research and
address the crisis and solution to it in order to make a book entitled “Cambodia’s Economic Crisis and the
Ways to Tackle It” so as to know what is going on and to learn about how the world is changing.
We hope that this book will be an important document for the students next generation. We
believe that this book may contain some mistakes because we do not have enough experience to consider
perfectly. We are happy to be criticized by all readers in order to have better book next time.
Year-2 Student, Semester 2 Kong Sotheara & Sak Khmao
Royal University of Law and Economics English Assignment
Content
I/ Introduction ............................................................................................................................................... 1
1-Agriculture Sector................................................................................................................................ 1
References ..................................................................................................................................................... 4
Year-2 Student, Semester 2 Kong Sotheara & Sak Khmao
Royal University of Law and Economics English Assignment
I/ Introduction
After a decade of double-digit growth, driven by the four keys of Cambodia’s economics such as
the agriculture, garment, construction, and tourism sectors, the Cambodian economy is predicted to
contract significantly in 2009. In fact, the financial crisis in the US, the unfavorable external environment,
is leading to less demand for Cambodian exports, fewer tourists, less foreign investment, and joblessness.
Inflows of foreign direct investment are projected to slow from a record high of 10% of GDP (Gross
Domestic Product) in 2007 to 5.2% in 2009, as foreign investors become more cautious about investing in
developing countries as Cambodia which has unsustainable economic situation. So, the four key drivers
of Cambodia’s economic growth are suffering severe storm causing very many problems. Below are the
descriptions of Cambodia’s economic crisis and the ways to tackle it.
Year-2 Student, Semester 2 2
Royal University of Law and Economics English Assignment
establish common property rights over water. All these strategies will drive Cambodia’s agriculture
development and guarantee Cambodian farmers’ living conditions.
2-Keeping the Garment Sector in Good Health
As described in such a context above, Cambodia bound to lose its market shares in the United
States since demand will clearly be reduce. The Kingdom will then be force to seek new markets.
Cambodia must boost its competitiveness and must be one of the country’s priorities by
facilitating trade, offering fiscal stimulus and dealing with labor-related conflicts. Moreover, the
government has to promote and encourage foreign direct investment in a more appropriate way by
combating corruption because investors are complaining about corruption and they are going to other
countries. So, Cambodia has to attract legitimate investors, but also high-quality investors with technical
expertise, and that will diversify industries.
For factories or enterprise having financial problems, Cambodia must dare implementing slightly
more ambitious, expenditure policies to pay the debts of those factories in order to prevent them from
going bankrupt so as to gaurantee employment of Cambodian workers.
3-Creating New Jobs
To outlast Cambodia’s economic crisis, as what French Prime Minister Nicolas Sarkozy and other
responsible and caring governments in other countries have done, Khmer government should quickly call
for quick and bold action to create new jobs by making construction sites to develop public infrastructure,
restore ecological system, construct or mend buildings for retirees, etc. Doing so, the government will
create so many jobs for people losing jobs.
IV/ Conclusion
If the government is willing or able to implement the three above-described measures to tackle
Cambodia’s economic crisis, Cambodians hopefully will not get much negative impact from the
international crisis. Starting today, Cambodian government must pick Cambodia up, dust Cambodia off,
and begin again the works of remaking Cambodia.
Year-2 Student, Semester 2 3
Royal University of Law and Economics English Assignment
References
1- http://balita.ph/2009/05/22/cambodias-tourism-drops-due-to-global-financial-crisis.mht, “Cambodia's
tourism drops due to global financial crisis”. [May 22, 2009]
3- http://irinnews.org, “CAMBODIA: Food security threat as economic crisis takes hold”. [May 07,2009]
Year-2 Student, Semester 2 4