Executive Summary

Between 2015 and 2017, the government drastically increased repressive measures against critics of the government. The murder of prominent dissident Kem Ley in July 2016 was the most prominent example of numerous efforts widely perceived to be an attempt to frighten political opponents. In reaction to the increasing popularity of the main opposition party Cambodia National Rescue Party (CNRP), its president Sam Rainsy was sentenced in absentia to perennial imprisonment and later de facto exiled by the government. Moreover, his deputy Kem Sokha was forced to live in self-imposed house arrest for half a year in order to avoid detention – despite enjoying parliamentary immunity. At the time of writing, two opposition lawmakers and more than a dozen lower-level CNRP politicians and followers have been imprisoned by the regime, serving jail terms up to twenty years.

Prime Minister Hun Sen seems to be willing to pull out all the stops to remain in power. By succeeding the late Chea Sim as party president in 2015, he strengthened his grip on the ruling Cambodian People’s Party (CPP). In addition, several newly adopted laws put the regime in the position to easily take legal action against any unfriendly civil society organization and other (potential) critics. With the exception of increased legal persecution and physical violence against political rivals, the management of the public sector remained largely unchanged. Weak law enforcement, rampant corruption, and red tape are still core characteristics at most administrative levels. International cooperation was shaped by further intensification of political and economic relations to the People’s Republic of China. With ongoing lobbying for Chinese interests, mainly in relation to Beijing’s territorial claims in the South China Sea, Cambodia’s role within the Association of Southeast Nations (ASEAN) is widely unchanged, but without particular strains on bilateral relations with other member states so far.

After generating extensive growth of Gross Domestic Product (GDP) for years, the government reaped the rewards of reclassification to “lower middle-income country” status by the World Bank in 2016. Despite this success and effective poverty reduction in the last two and a half decades, the overall sustainability of the economic recovery has to be questioned. Whereas the growth has been fueled by over-exploitation of Cambodia’s natural resources for many years, the pillars of the economy face more and more challenges. In particular, the rice sector came under increased pressure due to reduced competitiveness compared to neighboring countries. The risks of a real estate bubble in Phnom Penh increased, while growth in tourism declined. Impediments to further industrialization remain considerably high due to the lack of a skilled workforce, high energy costs and grave deficits in logistics. At the very least, the yearly minimum wage increases in the apparel industry have not reduced the attractiveness of Cambodia as a manufacturing base for shoes and textiles.

Read the full report on http://www.bti-project.org/en/reports/country-reports/detail/itc/khm/

This report is part of the Bertelsmann Stiftung’s Transformation Index (BTI) 2018. It covers the period from February 1, 2015 to January 31, 2017. The BTI assesses the transformation toward democracy and a market economy as well as the quality of political management in 129 countries. More on the BTI at http://www.bti-project.org.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Source: Bertelsmann Stiftung, BTI 2018 Country Report — Cambodia. Gütersloh: Bertelsmann Stiftung, 2018.