August 29, 2011
By China Briefing
The China Alternative is our series covering other manufacturing destinations in emerging Asia that may start to compete with China in terms of labor costs, infrastructure and operational capacity. In this issue we look at Cambodia.
By Kaitlin Shung
Aug. 29 – Tourists to Cambodia often take similar routes, discovering the wide and stately streets of Phnomn Penh before taking a dusty six hour bus ride to Siem Reap, home of the beautiful Angkor Wat. Among the ruins of the ancient Khmer Kingdom at Angkor Wat, local Cambodian children can often be seen calling out flattering phrases, usually in Chinese and English, looking for a crisp American dollar or a few pieces of candy.
Cambodia boasts a rich and more recently, bloody, history. An underdeveloped country of roughly 14.7 million, Cambodia was set back significantly in the 1970s under the extremist rule of the Khmer Rouge. It was estimated that nearly 20 percent of the population died under the leadership of Pol Pot due to starvation, torture, and executions, and the economy was completely dismantled.
As a result of its short time under French rule, the official languages spoken are Khmer, French and English, although French appears to be scarce except among the older generations. The majority of the population is within the 15-64 age range and the country has a respectable 73.6 percent literacy rate.
Cambodia operates as a multi-party democracy under a constitutional democracy, and the long-serving prime minister has a considerable amount of power. The head of State is King Norodom Sihamoni, who was sworn in on October 29, 2004 while the prime minister is Hun Sen.
The Cambodian currency is the riel (KHR), which traded, on average, at KHR4,145 to US$1 in 2010. In addition to the riel, U.S. dollars are also commonly accepted and according to the New York Times, almost 90 percent of deposits and credits in the banking system are denominated in U.S. dollars. With a large portion of capital and savings in the greenback, the Cambodian government ultimately has less ability to influence the economy and thus less control.
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