The global financial and economic crisis is the latest in a series of external shocks to hit Cambodia in the space of about two decades, following on from the food crisis that struck in 2006 and the Asian financial crisis of 1997. Wrestling with the effects of these three crises has represented a major feat for Cambodia’s post-conflict economy. The global financial crisis hit Cambodia through its second-round effects on trade, private capital flows and, ultimately, the country’s growth sectors. Its overall impact has been all too clear. From being one of the fastest-growing economies in the world, Cambodia is now poised to suffer one of the steepest contractions in output in developing East Asia. In the decade before the crisis, the country experienced significant reductions in poverty, whereas the number of poor Cambodians is now expected to increase.
Hossein Jalilian and Glenda Reyes