The Kingdom of Cambodia, with its rich variety of natural resources (fertile soil favorable for agriculture, good tropical forests, and minerals), and abundant labor force, offers foreign investors many possibilities for producing or processing a wide range of local products, including, but not limited to wood furniture, paper, canned vegetables and fruits, precious stones and other minerals, clothes and footwear, etc. The Mekong River and its many tributaries have vast potentials as sources of hydro-electric power which, once harnessed, will supply abundant energy for industrial and commercial development and household use. Recent successful petroleum and gas discoveries off its coasts enhance Cambodia's attractiveness both to foreign and local investors. The possibility of fast economic growth and sustained, rational, and environmentally sound development is very high.
The process of peace and national reconciliation set in motion by the Paris Peace Agreement on October 23,1991, has fundamentally changed the overall situation of Cambodia. Assisted by the international community, a free, fair, and democratic election was held in May 1993, and led to the adoption of a new constitution, the establishment of the National Assembly, and the formation of the Royal Government of Cambodia. Cambodia is now a full-fledged democratic society respecting the principles of a free-market economic system.
With a strong motivation to expand economically, the Cambodian Government has taken steps to encourage investments. Cambodia's National Assembly passed the "Law on Investment of the Kingdom of Cambodia" on August 4, 1994. With the implementation of the new investment law, which includes some of the best business incentives in South East Asia, Cambodia is on the right road aimed at economic growth and development.
Cambodia covers a land area of 181,035 sq. km, which is the size of Missouri and a bit over half the size of Italy or Vietnam. The country's maximum extent is about 580 km from east to west and 450 km from north to south. Cambodia is bounded on the west by Thailand, on the north by Thailand and Laos, on the east and south-east by Vietnam, and on the south by the Gulf of Thailand.
Cambodia's dominant topographical features are the Mekong River and the Tonle Sap (Great Lake). The Mekong flows some 400 km across the country. At Phnom Penh, it splits into two major branches, the Bassac River and the Tonle Sap River.
The plains of Cambodia are surrounded by the Cardamon mountains to the west and the Dangrek mountains in the north. In the north-eastern corner of the country, the plains give way to the Eastern Highlands, a remote region of densely forested mountains and high plateaus that extend eastward into Vietnam's Central Highlands and northward into Laos.
Phnom Penh is the capital. The second largest city is Battambang. Other major cities are Kompong Cham, Siem Reap, Sihanoukville, Kandal, Prey Veng, Takeo, Kompong Thom, Svay Rieng, and Kompong Speu.
Situated in the tropical zone, Cambodia benefits from a great amount of sun almost year-round. Each season has its own beauty and refreshing changes in weather. There are two seasons: monsoon season and dry season. The humid, rainy season lasts from May to October due to southwestern monsoons. Temperatures range from 27-35 degrees C, with humidity up to 90%. The hottest month is April when the temperature can reach 38 degrees C. The cool, dry season lasts from November to March with temperatures ranging from 17-27 degrees C. December to January is the coolest period.
Total population is approximately 10.7 million. Cambodians comprise a variety of people who are commonly called Khmer, and they constitute 90-95% of the population. The population also includes a variety of ethnic backgrounds: Chinese, Vietnamese, Chams (Khmer Islam) and the ethnic hilltribe, called Khmer Loeu.
The Cambodian language - called Khmer - is part of the Mon-Khmer family. Khmer, Thai, and Laotian are in the same linguistic family.
Given the French colonial presence, many older, educated Khmers speak and read French. Now, English is more popular with the younger generation, especially for business purposes. The literacy rate is low at around 50 to 60%.
Cambodia has a rich history which can be traced back to the 1st century AD when it was part of the kingdom of Funan. In the middle of the 6th century, the Kambujas, who lived in the north of Cambodia broke away from Funan and a new power, called the Chen La, assumed control of the country.
The Angkor period of Khmer history, which lasted from the 9th to the mid-15th century, further illuminated the already colorful Cambodian culture. During this period, Cambodian architecture, cultural, and military achievements were at their peak. The Angkor temples were built in this period. The most famous, Angkor Wat, was built in the 12th century by Suryavarman II.
Cambodia was a French protectorate from 1863 to 1953. The country regained its independence in 1953 and lived in peace with its neighbors until the late 1960's. In 1970, General Lon Nol conducted a coup d'état supported by the United States. The civil war between Lon Nolists and Khmer Rouge groups began in Cambodia. In 1975, the Khmer Rouge under Pol Pot overthrew the Lon Nol regime and began a reign of terror and genocide, where more than 2 million Cambodians were killed or died of starvation, sickness or hard labor.
Toward the end of 1978, Vietnamese forces entered Cambodia and fought against the Khmer Rouge. On October 23, 1991, the Paris Peace Agreement was signed by the four major internal political parties of Cambodia and 19 countries to end the fighting and to hold general elections. The current coalition government took office in November 1993, following UN-supervised general elections where over 90% of the eligible electorate participated.
Cambodia's Constitution was promulgated in 1993. Cambodia became a constitutional monarchy with King Norodom Sihanouk as Head of State. The country is committed by the Constitution to follow the path of democracy and pluralism. There is a threefold separation of powers in Cambodia (as in the United States): the legislative, the executive, and the judiciary.
- The Assembly consists in 120 elected members who represent the entire Cambodian people.
- The Royal Government of Cambodia is a coalition with three main parties, FUNCINPEC, CPP, and BLDP. The Royal Government is headed by H.E. Ung Huot, the First Prime Minister (he is also the Minister of Foreign Affairs and International Cooperation and member of FUNCINPEC), and by Samdach Hun Sen, the Second Prime Minister (he is the deputy head of CPP). The internal policy is concentrated on achieving national unity and national reconciliation, the rebuilding of the infrastructure and the economy, the protection of human rights, and a free-market economy. The external policy is aimed at maintaining sovereignty, independence, territorial integrity, neutrality, and friendly relations with all nations.
- The Judiciary
The Cambodian Constitution provides for an independent judiciary. There are the lower
courts, the Appeal Court, and the Supreme Court. The judiciary is obligated to guarantee
and uphold impartiality and to protect the rights and freedoms of the citizens.
In July 1997, Cambodia was endangered by extremists in collusion with the outlawed Khmer Rouge. Despite this event, the Government has been determined to sustain the achievements of the Paris Peace Accords and the outcome of the 1993 election by maintaining and respecting the Constitution, the continuity of the National Assembly and the Royal Government under the leadership of the King. The Government's moves forward is aimed at ensuring the rules of law in the condition of democracy and pluralism. Therefore, the 3 priorities of the major strategic tasks in the short term and in the long term, as well, are as follows:
- Maintain political stability, security and public order, and neutral political
atmosphere for the election;
- Maintain macro-economic stability, prevent inflation, and maintain the economic growth
rate;
- Continue to reform the economy, administration, and military.
These 3 major strategic tasks will be simultaneously carried out as the 3 different end lines of a tie to keep Cambodia on track towards political stability, democracy, respect for human rights, national reconciliation, and economic and social development with realism.
The policy of the Royal Cambodian Government is to encourage all types of industries as long as they contribute to the growth of the economy. Economic reforms have been established in areas of banking, taxation, and customs. Private investment is the highest it has ever been. More than $2.5 billion have been registered since the introduction of the Foreign Investment Law in August, 1994. The Government has succeeded in reducing inflation from 31% in 1993, to 26% in 1994, 3.5% in 1995 and 9.8% in 1996. Monetary stability against the U.S. dollar is being maintained. There is a good environment for foreign investment in Cambodia.
Rice, which supplies about 75 percent of the calories consumed by Cambodians, is grown on over 90% of the currently cropped areas. The total worked land in 1994 (1.8 million ha) was less than in the 1960's (2.5 million ha). In 1964, Cambodia exported 569,000 tons of rice. Cambodia is expected to become self-sufficient in rice in 1995 and may have a surplus to export after years of shortfalls. Other food crops include maize, root vegetables, oleaginous plants, and garden vegetables.
Cambodia's rubber plantations, although old, are still a valuable economic asset. They are second only to timber as a source of export earnings and are the major employers of labor in Kompong Cham and Prey Veng. Production increased from 17,645 tons in 1985 to 40,000 tons in 1994. In 1966, Cambodia exported 50,782 tons of rubber. In 1995, FAO (the United Nations Food and Agriculture Organization) estimated that Cambodia could produce at least 600,000 tons of rubber annually. The new expansion is in the northeast provinces of Cambodia, Ratanakiri and Mondulkiri provinces.
Forestry, with large stocks of teak and rosewood, is one of Cambodia's most valuable assets. Production was 325 thousand m3 in 1991, but this dropped to 133 thousand m3 in 1992. The Royal Government has banned timber exports and has encouraged local wood processing.
Fish and fishery products contribute about 5% of Cambodia's GDP and are a main source of protein in the diet. There is potential for export. Also, fish culture shows great commercial possibilities.
Presently all commercial energy used in Cambodia is imported. It is, however, believed that there could be a significant potential for natural gas and oil in Cambodia. Contracts have been issued for offshore exploration and further contracts are expected to be issued. Estimates have been put at 1 to 5 trillion cu feet of gas and 30 to 180 million barrels of oils.
Mineral exploitation in Cambodia is mainly artisanal mining of gold and gems. Cambodia's mineral resources are not well documented, but there is a potential for production of phosphate, granite, limestone, sand, gravel, cement, clay, bauxite, zinc, and copper. Three foreign companies are exploring for gold in Cambodia. A cement factory is going to be rehabilitated.
Only a small part of the work force is employed in the industrial sector. This sector is largely undeveloped with factories operating at low capacity because of outdated machinery, shortage of raw materials, poor management, and shortages of electricity. Light industry is generally better developed than heavy industry. 30 garment factories are in operation for export. Garments were exported at the rate of $26 million in 1995. The more developed industries include household goods, textiles, soft drinks, alcohol, nails, jute sacks, tires, tools, pharmaceutical products, and cigarettes.
Cambodia has a lot to offer. The country offers a rich cultural and historic heritage and many fine natural attractions. The world-renowned Angkor Wat, unspoiled beaches, coral islands, beautiful mountains, and forests make Cambodia a unique travel destination. The number of tourists grows every year : 1993 = 118,000 tourists, 1994 = 177,000 tourists, 1995 = 220,000 tourists, 1996 = 300,000 tourists. Cambodia hopes to attract a million tourists by the year 2000.
The Kingdom of Cambodia pursues a foreign policy of peace, friendship, and cooperation with all countries and has diplomatic relations with over 80 countries. In July 1995, Cambodia became an observer of the Association of South East Asian Nations (ASEAN) and expects to be a full member in 1997. There are over 50 international organizations and non-governmental organizations operating in Cambodia, as well as local NGOs.
The United States has lifted the U.S. trade embargo against Cambodia imposed in 1975, has normalized relations with the Royal Government of Cambodia, and upgraded its diplomatic mission in Phnom Penh to a full embassy. For its part, the Royal Government also has recently reopened its embassy in Washington in July 1995.
In recent years, trade between the United States and Cambodia has increased. U.S. exports to Cambodia totaled $21.4 million in 1996 and $7.4 million from January to March 1997, and imports totaled $4.2 million in 1996 and $4.5 million from January to March 1997. The Royal Government and OPIC have signed an agreement. There are around 110 U.S. companies and companies representing U.S. products in Cambodia. American businesses and investors are involving in import-export, services (press, restaurant, legal advisor, teaching, transport), construction (Route 4 restoration project), oil prospecting (UNOCAL Cambodia, Triton Energy Corporation, Exxon), and manufacturing (Coca-Cola, textiles), and energy.
Cambodia received MFN status from the United States in October 1996. GSP was granted by the U.S. and came into effect on August 1, 1997.
The Cambodian Embassy, located in Washington, D.C., serves as Cambodia's official presence in the United States. The Embassy represents Cambodia in political and economic relations with the United States Government, and social and cultural exchanges with the United States.
The Embassy also issues visas to persons planning to travel to Cambodia and provides assistance to Cambodian nationals in the United States.
The United States Government has an official embassy in Cambodia located at #27 Street 240, Phnom Penh.
All visitors, whether for social or business purposes are required to obtain a visa before entering Cambodia. Travel to Cambodia has become easy to arrange and carry out. There are several airlines that provide flights to Phnom Penh. While visiting in Cambodia, it is easy to find adequate accommodations. Hotels and guest houses provide clean, safe, western-style accommodations at a reasonable price. Cambodia's food is similar to that in Laos, and to some extent, Vietnam. Also, if one chooses to dine with western-style meals, they are available.
Travelers normally arrive in Cambodia at the International Pochentong Airport. The terminal has been recently renovated and the runway extended to take larger aircraft. The national airline, "Royal Air Cambodge" flies to neighboring countries and internally. A number of other regional airlines such as Silkair, Thai Airlines, and Vietnam Airlines are also available. An airport tax of $20 is charged to all passengers leaving Cambodia.
Many resources have become available to support business activities and foreign travelers. A few hotels and restaurants accept payment by Visa and Master Cards. Travelers checks denominated in U.S. dollars can be exchanged for Cambodian Riel (approximately US$ 1 = 2,800 Riel) at some banks.
Telephone and facsimile service is available at all major hotels. There are also over 60 public pay phones around Phnom Penh. Overseas calls are handled by satellite. Facsimile connections and direct telephone service can easily be established from offices and private residences.
The Embassy can process all types of visas, including diplomatic, official, and tourist visas. Applicants for these types of visas are asked to contact the Royal Embassy of Cambodia located in Washington, D.C. or the Honorary Consulate General in California (Tel: 310-591 0083, Fax: 310-591 8179). A fee of $20 is charged, and three passport photographs are required. For diplomatic and official passports, there is no fee. Visas are normally issued for one month, but extensions can be obtained by contacting the Immigration Office at No. 5, Street 200 in Phnom Penh.
Each applicant interested in obtaining visas through the Embassy should complete an application form and follow the instructions indicated on the form. For further information, please call 202-726 7742.
Foreigners working in Cambodia can obtain multiple visas valid for six months and one year. Foreign investors can normally obtained multiple visas for periods of three to six months.