Resource information
As a result of a determined regulatory
reform process and an economic modernization process over
the past two decades, Cambodia has experienced extraordinary
economic growth. In 2004, Cambodia became the first
low-income country to join the World Trade Organization
(WTO). Since then, Cambodia has grown to become one of East
Asia s most open economies, especially in the services
sector. Cambodia s impressive economic growth owes much of
its driving force to the boom in services trade. Services
exports grew more than 20 percent a year for most of the
past decade led by a rapid expansion in tourism. Foreign
direct investment (FDI) particularly in tourism,
construction, infrastructure, agro-processing, and
telecommunications also supported the expansion of services
trade, not only by attracting foreign capital and expanding
employment into Cambodia, but also by improving domestic
technology and enhancing domestic skills. Cambodia is
quickly becoming a sophisticated economy that needs to move
beyond the pillars of textiles and tourism exports by
diversifying into the export of modern services. Cambodian
firms are already tentatively exporting some niche services
such as computer-based animation. Modern services exports to
other East Asian countries, including information technology
(IT)-related services, are likely to play a more important
role in Cambodia as a source of employment, revenue, and
investment. In the regional context, Cambodia stands to
benefit from its chairmanship of the Association of
Southeast Asian Nations (ASEAN), by showcasing its economic
reform and modernization process, and increasing the
potential to attract investments from services firms
interested in serving the region as whole. Cambodia should
act quickly to address potential competition from other
least-developed (LDC) and developing countries across the
regions that are also expanding their services industries.
