Economy of Cambodia 2009_Tertiary Education Orientation

sikçasala sIþBI³

“karbgðajpøÚvsMrab;fñak;]tþmsikSa”Seminar on

‘ORIENTATION OF TERTIARY EDUCATION’

11-12 August, 2009

By Hoem Seiha

Director, Panhasak School

012-699-553

[email protected]

ECONOMY OF

CAMBODIA

From: 1995 to future 2013

CONTENT

Cambodia Profile & Map

Economy Condition

Analysis & Follow-up of

Job Market

Map of Cambodia

People (2005)

Population: 13,607,069

Age structure:

- 0-14 years: 37.3% (male

2,559,734/ female 2,510,235)

-15-64 years: 59.7% (male

3,887,642/ female 4,232,313)

-65 years and over: 3.1% (male

150,862/ female 266,283)

Ethnic groups:

-Khmer 90%

-Vietnamese 5%

-Chinese 1%

-Others 4%

Languages:

-Khmer (official) 95%

-English

-French

-Chinese

People (2005)

Statistics of Cambodia's

Economy

19.5517.53

15.6614.01

12.4510.82

8.697.26

6.295.334.664.283.983.653.513.113.393.483.42

Year

1995

Year

1996

Year

1997

Year

1998

Year

1999

Year

2000

Year

2001

Year

2002

Year

2003

Year

2004

Year

2005

Year

2006

Year

2007

Year

2008

Year

2009

Year

2010

Year

2011

Year

2012

Year

2013

GDP (from 1995 to prediction of 2013) in USD Billion at Current Prices

Source: www.economywatch.com

Source: Cambodia Economy Watch

GDP Per Capita (PPP), US Dollars for Cambodia, in other Years

Year US$

In year 1995 646

In year 1996 675

In year 1997 710

In year 1998 741

In year 1999 828

In year 2000 905

In year 2001 986

In year 2002 1,052

In year 2003 1,146

In year 2004 1,270

In year 2005 1,457

In year 2006 1,626

In year 2007 1,945

In year 2009 2,034

In year 2010 2,063

In year 2008 2,066

In year 2011 2,180

In year 2012 2,321

In year 2013 2,489

Cambodian Economic

Growth

Beside the fourth consecutive year of double digit

economic growth rate realized in 2007, the series data

between 2005 and 2007 also showed that Cambodia’s

economic growth rate is slowing down successively, from

13.3 percent in 2005 to 10.2 percent in 2007. Available

data for the first nine months of 2008 and current local

and global economic trends suggest that Cambodia’s

economic growth is likely to continue its downward trend

significantly over to 2008. This downward trend is also

expected to carry on into 2009.


Cambodia's Real GDP Growth by Sector (%, 2000 prices)

2004 2005 2006 2007 2008 2009

Agriculture -1.0% 15.5% 5.5% 5.1% 5.5% 5.3%

Paddy -12.2% 43.7% 4.3% 7.5% 6.2% 5.6%

Other Crops 9.5% 12.2% 6.5% 9.0% 10.1% 9.6%

Livestock 3.9% 5.6% 8.2% 3.7% 6.6% 6.4%

Fishery -1.7% 5.6% 3.8% 0.8% 0.8% 0.8%

Rubber & Forestry -0.3% 3.5% 6.6% 1.8% 1.1% 1.2%

Industry 17.0% 12.9% 18.4% 8.4% 6.4% 4.1%

Garments 24.9% 9.2% 20.4% 10.0% 8.8% 6.8%

Food, Beverages & Tobacco -5.3% 9.0% 3.3% 3.1% 5.5% 5.5%

Electricity, Gas and Water 11.3% 12.7% 31.5% 11.7% 12.2% 11.2%

Construction 13.2% 22.1% 20.0% 6.7% -0.3% -5.7%

Other industries 9.3% 17.4% 14.1% 6.4% 8.3% 7.2%

Services 13.2% 13.1% 10.1% 10.2% 8.4% 7.3%

Tourism (Hotels & Restaurants) 23.4% 22.3% 13.7% 10.3% 9.3% 8.6%

Transport & Communication 9.5% 14.5% 2.1% 7.2% 6.1% 6.2%

Trade 5.9% 8.5% 7.1% 9.5% 7.1% 6.5%

Finance (Banking & loan Services) 20.6% 19.6% 23.9% 22.2% 32.0% 18.9%

Other Private Services 19.2% 13.1% 14.2% 11.5% 8.2% 7.0%

Public Administration -6.7% 5.9% -1.3% 0.1% 0.2% 0.8%

Total GDP 10.3% 13.3% 10.8% 10.2% 7.0% 6.0%

Gross Domestic Products

(GDP: 2007)

Source: BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS

Agriculture

2008 has been another rainy year, and has followed equally wet

years in 2007, 2006 and in 2005. The agricultural sector continues to

be natural resource-based and growth is expected to increase slightly

to 5.5 percent growth in 2008 from 5.1 percent in 2007. Growth has

been bolstered by an expansion in cultivated areas, higher exported

agricultural product prices, and a continued increase in livestock

production. However, agro-investment has remained weak, despite

soaring prices and demand on the global market. Effective irrigation

and natural resource management systems are urgently required to

achieve sustainable agricultural growth and thus reduce poverty,

since the agricultural sector is the main source of income for the

country’s poorest inhabitants. Based on current trends, agricultural

sector growth is expected to be about 5.3 percent in 2009 and growth

prospects remain slim in the coming years. Crops, especially paddy,

continue to be the main source of income for Cambodian farmers.


Agriculture (29% of GDP,

2007):

Agriculture (29% of GDP, 2007):

unforested land: 4,848,000 hectares

cultivated land: 2.5 million hectares

Products (of agriculture)

rice, corn, vegetables, flour: tapioca

rubber, meat, dairy products, sugar, cashews

Industry

Industry sector growth is continuing on a downward trend in

2008 due to slower expected growth in garment exports and

negative growth in the construction sector. Other industrial

sectors are growing at a moderate pace. The total industrial

growth rate has grown by only 6.4 percent in 2008, down

from 8.4 percent in 2007 and 18.4 percent in 2006. Based on

the current trend, the industrial growth rate is likely to

continue its downward trend in 2009, due to expected

continued downward trend of construction and garment

sector, before get back to moderate growth in the next

coming years. Progress in Government reforms in line with

effective anti-corruption policies could accelerate industrial

growth.


Industry (27% of GDP,

2007):

Industry (27% of GDP, 2007):

Types: garment and shoe

manufacturing, rice milling, tobacco,

fisheries and fishing, wood and wood

products, textiles, cement, some

rubber production, paper and food

processing, construction

Service

Last but not least, the service sector may grow significantly in

2008, but it’s unlikely to post double-digit growth as growth is

expected to slow somewhat in the tourism, trade and transport

sectors. The overall service sector, excluding public

administration, is expected to expand by only 8.7 percent in

2008, which is a drop from a growth rate of 10.5 percent in

2007 and 10.6 percent in 2006. Service sector growth has

been bolstered by annual increases in the number of foreign

tourist arrivals in Cambodia and a significant expansion in

economic activity, especially the trade, transportation,

communication, and financial service sectors. Based on

current economic trends, service sector growth likely will

remain strong but will slow slightly over the next few years.


Services (39% of GDP,

2007)

Services (39% of GDP, 2007):

Tourism

Telecommunications

Transportation

Construction

Finance & Banking

Trading

Other Private Services & Public Admin

Other Business Services

Advertising, Designing, Publishing

Real Estate Agency

Architecture & Designing

Business & Trade Association

Law and Legal Adviser

Audio & Video Production

Insurance Companies

Banking: Finance, Loan, Deposit

Consultancy


Computer Programming

Marketing Research & Analysis

Economy Research & Analysis

Printing Houses

Employment Agency

Engineering Services

Environmental Organization

Event Management

Funeral Services


Geographic Services

I-Booth Operator Services

Information Services: News Agency

Inspection, Testing, Evaluation Services

Internet Services

Investment Companies

Language Translation/interpretation

Laundry, Dry Cleaning

Logistics Support


Marine Work Services

Mechanical Contractors

Mines: Clearance Services

Oil Exploration, Consultancy

Security Services

Property Investment Companies

Secretarial Services

Training & Education Services

Others…

Trade and Investment

In 2008, Cambodia’s garment external trade is

slowing down, but the value of

imported cars, motorcycles, buses, trucks,

tractors, and alcohol increased

significantly. That leads to widening the

Cambodia’s trade deficit. However, trade

deficit, as well as income account deficit, is

totally financed by revenues from foreign

tourists, private and government transfers, and

impressive foreign investment.


Private Investment and

Stocks of Capital

During the first half of 2008, the Council for the Development of

Cambodia (CDC) approved 50 investment projects worth about US$4.4

billion in fixed assets. That represented a 3.8 percent decrease in the

number of investment projects, but a five-fold increase in value of the fixed

assets compared to the same period in 2007 because most of the projects

approved in 2008 were mega projects. Most of the investment projects

involved the garment and tourism sectors, which accounted for 24 and 6,

respectively, of the approved investment projects and

US$25 million and US$4.1 billion of fixed assets. The investment activity

was bolstered by healthy garment exports and tourism activities during

2008. It is worthy noting that only two investments in agro-industry have

been approved, despite increases in agricultural prices and high

agricultural production this year.


Approved Private Investment

Projects Source: Cambodia Economy Watch

Approved Private Investment Projects

Number of Approved Investment Projects

Year Y-2003 Y-2004 Y-2005 Y-2006 Y-2007 Y-2008

Garments 31 35 53 49 39 24

Hotels 11 3 4 4 11 6

Others 24 22 47 45 80 20

Total 66 60 104 98 130 50

Fixed Assets Approved (Millions of US Dollars)

Excluding registered investments of mega-projects of more than US$1 billion

Garments 75 85 118 212 171 90

Hotels 114 23 65 22 1,101 4,108

Others 125 123 512 2,217 1,395 232

Total 314 231 695 2,451 2,667 4,430

Inflation

The inflation is accelerated during 2008 with double speed by

soaring in food prices and transportation cost. At the same

time, the exchange rate of the riel against US dollar is

relatively stable; whereas the riel in circulation increased

significantly compared to that of US dollar.

The inflation rate jumped to double digits in December 2007

to 10.8 percent from only 2.8 percent in December 2006.

External factors such as soaring crude oil and food prices,

fears of a US economic recession and weak economic

performances in certain sectors of the Cambodian economy

have caused higher inflation. These problems have persisted

in 2008.


Employment

Updated labor force data is expected with the release of

findings from the Cambodia Socio Economic Survey (CSES)

of 2007. The 2004 CSES pegged the total labor force at about

7.5 million, or 56 percent of the total population, with an

approximated 0.2 million people entering the labor market

every year. Based on these figures, Cambodia’s total labor

force was an estimated 8.4 million in 2007 and is likely to

reach about 8.6 million in 2008, of which about 20 percent are

under 18 years old. It should be noted that a very narrow

definition of employment was used for the purposes of the

CSES, which included anyone who had worked at least one

hour during the past reference survey week. The employment

rate exceeded 99 percent in 2004, according to the CSES.

Thus, the rate would have included the under-employed. EIC

projects job growth to be 2 percent in 2008.


Employment

Cambodia's Population and Labor Force (000's)

Year 2004 2005 2006 2007 2008 2009

Total Population 13,550 13,829 14,164 14,446 14,679 14,915

Total Labor Force 7,646 7,907 8,165 8,402 8,624 8,844

Total Employment 5,677 5,879 6,085 6,231 6,325 6,425

Formal Sectors 371 411 463 499 521 557

Garment 294 323 368 398 414 445

Tourism 78 88 95 101 107 112

Public Administration 335 335 335 335 335 325

Informal Sectors 5,306 5,468 5,622 5,731 5,804 5,869

Rural 3,973 4,061 4,145 4,215 4,275 4,331

Urban 1,333 1,407 1,477 1,516 1,529 1,537

Sources: Ministry of Planning and EIC estimates

Banking and Financial

Sector

The Financial Sector Development Strategy 2006-2015 (FSDS

2006-2015) is an instrument to accelerate development of

Cambodia’s financial sector. In line with financial sector and banking

reform, the blueprint considers poverty alleviation part of overall

economic development.

For many, a healthy banking sector signals political stability as

much as it does a stable economy. Net Foreign Direct Investment

(Net FDI) flows into banking and enterprise have bolstered the

growth of Cambodia’s banking sector. Today, several

licensed banks are currently operating under the supervision of the

National Bank of Cambodia (NBC).


Economy & Finance

Economy of Cambodia 2009_Tertiary Education Orientation