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Cambodia (Kampuchea), Economy

Cambodia is one of the world’s poorest nations. In 2000 its total gross domestic product (GDP) was $3.2 billion, yielding a per capita GDP of just $260, among the lowest in the world.

Even before being plunged into civil conflict in the 1970s, Cambodia lacked significant industrial development, with most of the labor force engaged in agriculture. The country was self-sufficient in food and produced exportable surpluses of its principal crops of rice and corn. In spite of relatively low yields and a single harvest per year, Cambodia annually exported hundreds of thousands of tons of rice.

The civil war from 1970 to 1975, the Khmer Rouge regime from 1975 to 1979, and the Cambodia-Vietnam War from 1978 to 1979 virtually destroyed Cambodia’s economy. By 1974, under wartime conditions, rice had to be imported, and production of Cambodia’s most profitable export crop, rubber, fell off sharply. The civil unrest also disrupted Cambodia’s fledgling manufacturing industry and severely damaged road and rail networks.

In 1975 the newly installed Khmer Rouge government nationalized all means of production in Cambodia. Money and private property were abolished, and agriculture was collectivized (ownership was transferred to the people as a group, represented by the state). The Khmer Rouge Four-Year Plan, a utopian document drafted in 1976, envisaged multiple plantings of rice and a vastly expanded irrigation system. The plan aimed to increase income from exports of rice and other products and to use this income to buy machinery with which to industrialize the country. The Four-Year Plan was poorly thought out, brutally enforced, and unsuccessful. Rice production rose slightly, but between 1976 and 1978, hundreds of thousands of people died from malnutrition, overwork, and mistreated or misdiagnosed diseases. The Khmer Rouge executed hundreds of thousands more people whom they judged to be enemies of the regime. The atrocities of the Khmer Rouge period decimated Cambodia’s labor force.

After the Khmer Rouge were overthrown in early 1979, the government’s grip on agricultural production loosened, and millions of Cambodians attempted to resume their lives as subsistence farmers. By the mid-1990s Cambodia once again achieved self-sufficiency in rice production and began to export small quantities of rice. The country’s infrastructure improved gradually in the 1990s, largely due to massive infusions of foreign assistance. Other sectors of the economy were less fortunate, however. By 1995 the country’s economy as a whole was performing at only 40 to 50 percent of its pre-1970 capacity. For many visitors to the country, Cambodia’s poverty is masked by the apparent prosperity of sections of Phnom Penh.

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