Cambodia

ADB Economics Working Paper Series

Cambodia: Rapid Growth with Institutional Constraints
Hal Hill and Jayant Menon No. 331 | January 2013

ADB Economics Working Paper Series

Cambodia: Rapid Growth with Institutional Constraints
Hal Hill and Jayant Menon No. 331 January 2013
Hal Hill is Arndt Professor of Southeast Asian Economies, Australian National University. Jayant Menon is Lead Economist, Office of Regional Economic Integration, Asian Development Bank. We acknowledge with thanks the excellent research assistance of Anna Cassandra Melendez, the support of the ADB Cambodia resident mission, and very helpful discussions with friends and officials during our various visits to Cambodia. For helpful comments on an earlier draft, we thank Colin McKenzie, Takatoshi Ito, Shujiro Urata, Sothea Oum, Peter Warr, Hang Chuon Naron, Chan Sophal, Dyna Heng, Richard Pomfret, Yu Yongding, Jong Wha Lee and Marcus Noland. The views expressed in this paper are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank, or its Board of Governors or the governments they represent.

Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org © 2013 by Asian Development Bank January 2013 ISSN 1655-5252 Publication Stock No. WPS135358

The views expressed in this paper are those of the author and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. Note: In this publication, “$” refers to US dollars.

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References: Beresford, M., N. Sokha, R. Roy, S. Sisovanna, and C. Namazie . 2004. The Macroeconomics of Poverty Reduction in Cambodia. Phnom Penh: United Nations. Chandler, D. 2008. A History of Cambodia. 4th edition. Chiang Mai: Silkworm Books. Duma, N. 2011. Dollarization in Cambodia: Causes and Policy Implications. IMF Working Paper 11/49. Washington, DC: International Monetary Fund. Guimbert, S. 2010. Cambodia 1998–2008: An Episode in Rapid Growth. World Bank Policy Research Working Paper 5271 Washington, DC: World Bank. Hill, H., and J. Menon. 2011. Reducing Vulnerability in Transition Economies: Crises and Adjustment in Cambodia. ASEAN Economic Bulletin, 28 (2). pp. 134–159. Hughes, C., and K. Un, eds. 2011. Cambodia’s Economic Transformation. Copenhagen: NIAS Press. International Monetary Fund. 2012. Cambodia: Staff Report for the 2011 Article IV Consultation. Washington, DC. Menon, J. 1998. De-dollarising Cambodia. Cambodian Development Review, 2 (2). pp. 6–9. ———.2008. Cambodia’s Persistent Dollarization: Causes and Policy Options. ASEAN Economic Bulletin, 25 (2). pp. 228–37. Naron, Hang Chuon. 2011. Cambodian Economy: Charting the Course of a Brighter Future – A Survey of Progress, Problems and Prospects. Singapore: Institute of Southeast Asian Studies. Pomfret R. ASEAN’s New Frontiers: Integrating the Newest Members into the ASEAN Economic Community. Asian Economic Policy Review, 8 (1). Forthcoming. World Bank. 2009. Sustaining Rapid Growth in a Challenging Environment. Cambodia Country Economic Memorandum. Washington, DC. World Trade Organization (WTO). 2011. Cambodia – Trade Policy Review. Geneva. Cambodia: Rapid Growth with Institutional Constraints Cambodia’s economic growth has been one of the fastest among post-conflict societies, driven by the credible restoration of peace and security, large public and private capital inflows, economic openness, prudent macroeconomic management, and its location in a dynamic, neighborhood. A legacy of history and small size is that the government has limited policy space, although this has not retarded economic development. But challenges remain, including rising inequality, uneven spatial development, weak institutions, and high levels of corruption. About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.7 billion people who live on less than $2 a day, with 828 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org/economics Printed on recycled paper Printed in the Philippines