Cambodia Rising? Economic Growth Amidst Political Constraints

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 Cambodia Rising? Economic Growth Amidst Political Constraints

For much of the 21st century, Cambodia has been hailed as an economic success story—a low-income country that achieved consistent growth, attracted foreign investment, and made significant progress in poverty reduction. Even in the wake of the COVID-19 pandemic, the country has shown signs of strong recovery. Yet this economic narrative unfolds within the boundaries of a tightly controlled political system, where dissent is muted, opposition is weak, and independent media is increasingly scarce.

This paradox—growth without freedom—raises a crucial question: Is Cambodia truly rising, or is it merely expanding within limits that threaten the sustainability and inclusiveness of its development?

Economic Recovery: Post-Pandemic Momentum

After contracting by around -3.1% in 2020 due to the global pandemic, Cambodia's GDP rebounded to 5.2% in 2022 and is expected to exceed 5.5% in 2024, according to the World Bank and IMF. Several key sectors are driving this recovery:

1. Garments and Manufacturing

  • The garment, footwear, and travel goods sector contributes roughly 10% of GDP and over 60% of merchandise exports.

  • Cambodia exported around $11 billion in garments in 2023, with major markets including the U.S. and EU.

  • The industry employs nearly 750,000 workers, mostly women, and is a cornerstone of the country's industrial base.

2. Tourism

  • Tourist arrivals rose sharply in 2023 as post-pandemic travel resumed, with over 4 million visitors, up from 2.3 million in 2022.

  • Cultural landmarks like Angkor Wat, coastal regions, and new infrastructure projects (airports, roads) have bolstered this sector.

  • The government aims to make tourism more diversified and resilient, although challenges remain in eco-tourism and rural access.

3. Construction and Real Estate

  • Urban development, especially in Phnom Penh and Sihanoukville, has remained robust thanks to local and foreign investment (notably from China).

  • Infrastructure projects—bridges, roads, industrial parks—are key drivers of job creation and modernization.

4. Agriculture

  • While its share of GDP has declined, agriculture still employs about one-third of the population and remains crucial for rural livelihoods.

  • Rice, rubber, cassava, and fisheries remain core exports, with efforts underway to modernize production and improve market access.

The Political Landscape: A Managed System

Alongside economic growth, Cambodia has consolidated a deeply authoritarian political order:

  • The Cambodian People’s Party (CPP), in power since the 1980s, controls virtually all aspects of political life.

  • The main opposition party (CNRP) was dissolved by the Supreme Court in 2017, and newer challengers, like the Candlelight Party, have been repeatedly barred or restricted.

  • Independent media outlets, such as Voice of Democracy (VOD), have been shut down or pressured into silence.

  • Civil society organizations and activists face legal and informal constraints, including surveillance, harassment, and arrest.

The July 2023 national election—marking the leadership handover from Hun Sen to his son Hun Manet—was emblematic of this environment: calm, orderly, and entirely uncompetitive.

Growth Under Control: A Double-Edged Sword

Supporters of Cambodia’s model argue that political stability has enabled investment, infrastructure development, and pro-business reforms. With no major electoral uncertainty or disruptive protests, policies can be implemented swiftly, often in coordination with major investors or donor countries.

However, the constraints of this political model also pose serious long-term risks:

1. Weak Institutions

  • Without accountability, transparency, or checks and balances, corruption remains widespread—particularly in land management, procurement, and the judiciary.

  • Policy continuity may be preserved, but innovation and responsiveness to citizens’ needs often suffer.

2. Lack of Inclusive Development

  • Inequality is growing, particularly between urban and rural areas, and between elite-connected groups and the broader population.

  • Marginalized communities, such as informal workers or ethnic minorities, are often excluded from the benefits of growth.

3. Brain Drain and Youth Disillusionment

  • Many young Cambodians—facing limited job prospects and political exclusion—seek work or education abroad.

  • The sense that “change is impossible” may undermine civic engagement and long-term national cohesion.

4. Investor Confidence and Global Scrutiny

  • While Cambodia remains attractive for low-cost manufacturing, concerns about human rights, labor rights, and environmental degradation have led to international pushback.

  • The EU partially suspended its “Everything But Arms” (EBA) trade privileges in 2020, citing democratic backsliding.

  • Western companies and investors increasingly weigh Environmental, Social, and Governance (ESG) factors, which may hurt Cambodia’s appeal unless reforms are made.

Can Authoritarian Growth Be Sustained?

Cambodia's leadership faces a fundamental question: can it continue to deliver economic gains without allowing greater freedoms and institutional development?

Hun Manet has signaled interest in technocratic governance, digital reform, and education investment. However, these initiatives have so far avoided deeper political change or power-sharing.

For now, the CPP’s model appears intact—but its long-term success will depend not just on GDP figures, but on whether the benefits of growth reach ordinary Cambodians, and whether the political system can evolve to meet their aspirations.

Conclusion: A Rising Nation With Bound Feet?

Cambodia’s economic ascent is real. Skyscrapers dot the capital, exports are growing, and tourism is reviving. But this rise is constrained by the same structures that built it—a centralized power system with limited space for innovation, dissent, or reform.

The coming years will test whether economic performance alone can sustain legitimacy, or whether citizens will demand more than prosperity—they may begin to ask for voice, justice, and choice.

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