Background Note: Cambodia

-Geography
Area: 181,040 sq. km. (69,900 sq. mi.); about the size of Missouri.
Cities: Capital--Phnom Penh (pop. 1.3 million), Battambang, Siem Reap, Sihanoukville, Prey Veng, Kompong Cham.
Terrain: Central plain drained by the Tonle Sap (Great Lake) and Mekong and Bassac Rivers. Forests away from the rivers and the lake, mountains in the southwest (Cardamom Mountains) and north (Dangrek Mountains) along the border with Thailand.
Climate: Tropical monsoon with rainy season June-Oct. and dry season Nov.-May.

People
Nationality: Noun and adjective--Cambodian(s), Khmer.
Population (2008 census): 13.4 million.
Avg. annual growth rate (2008 census) 1.54%.
Health: Infant mortality rate--58/1,000. Life expectancy--59 years male; 63 years female.
Ethnic groups: Cambodian 90%; Vietnamese 5%; Chinese 1%; others 4%: small numbers of hill tribes, Cham, and Lao.
Religions: Theravada Buddhism 95%; Islam; animism; Christian.
Languages: Khmer (official) spoken by more than 95% of the population; some French still spoken in urban areas; English increasingly popular as a second language.
Education: Years compulsory--nine years. Enrollment--primary school, 92.2%; grades 7 to 9, 34%; grades 10 to 12, 13%; and tertiary, 7%. Completion rates--primary school, 48%; lower secondary school, 21%; upper secondary school, 9%; university, 6%. Literacy (total population over 15 that can read and write, 2007)--74% (male 85%; female 64%).


Government
Type: Multiparty democracy under a constitutional monarchy.
Independence: November 9, 1953.
Constitution: September 24, 1993; amended March 6, 1999 and March 2, 2006.
Branches: Executive--King Sihamoni (head of state since October 29, 2004), prime minister (Hun Sen since January 14, 1985), ten deputy prime ministers, 16 senior ministers, 26 ministers, 206 secretaries of state, and 205 undersecretaries of state. Legislative--National Assembly, consisting of 123 elected members; Senate, consisting of 61 members. Judicial--Supreme Court and lower courts.
Administrative subdivisions: 23 provinces and 1 capital municipality.
Political parties and leaders: Ruling parties--A coalition government of the Cambodian People's Party (CPP), led by Samdech Chea Sim; and the National United Front for an Independent, Neutral, Peaceful, and Cooperative Cambodia (FUNCINPEC), led by Keo Puth Reasmey. The Norodom Ranariddh Party (NRP), led by You Hockry is currently non-aligned but has announced it will join in a coalition with FUNCINPEC. Opposition parties--The Sam Rainsy Party (SRP), led by Sam Rainsy; Human Rights Party, led by Kem Sokha.

Economy
GDP (2008): $11.2 billion.
Per capita GDP (2008): $723.
Annual growth rate (2008): 6.5%.
Inflation (2008): 19.7%.
Natural resources: Timber, gemstones, some iron ore, manganese and phosphate, hydroelectric potential from the Mekong River, unknown quantities of oil, gas, and bauxite.
Agriculture (29% of GDP, 2007): About 4,848,000 hectares (12 million acres) are unforested land; all are arable with irrigation, but 2.5 million hectares are cultivated. Products--rice, rubber, corn, meat, vegetables, dairy products, sugar, flour.
Industry (27% of GDP, 2007): Types--garment and shoe manufacturing, rice milling, tobacco, fisheries and fishing, wood and wood products, textiles, cement, some rubber production, paper and food processing.
Services (39% of GDP, 2007): Tourism, telecommunications, transportation, and construction.
Central government budget (2006): Revenues--$814 million; expenditures--$973 million; foreign financing--$213 million.
Trade: Exports ($4.1 billion, 2007)--garments, shoes, cigarettes, natural rubber, rice, pepper, wood, fish. Major partners--United States, Germany, U.K., Singapore, Japan, Vietnam. Imports ($5.4 billion, 2007)--fuels, cigarettes, vehicles, consumer goods, machinery. Major partners--Thailand, Singapore, China, Hong Kong, Vietnam, Taiwan, United States.
Economic aid received: Pledges of $698.2 million in grants and concessional loans for calendar year 2007. Major donors--Asian Development Bank (ADB), UN Development Program (UNDP), World Bank, International Monetary Fund, Australia, Canada, China, Denmark, the EU, France, Germany, Italy, Japan, Sweden, Thailand, the U.K., and the U.S.; 100% of the $601 million pledged by donors for 2006 was actually disbursed, according to the Cambodia Aid Effectiveness Report 2007.
Principal foreign commercial investors: Korea, China, Russia, Thailand, the U.S., and Vietnam.
Exchange rate (2007): 4,006 riel per U.S. $1.

GEOGRAPHY
Cambodia is located on mainland Southeast Asia between Thailand to the west and north and Vietnam to the east and southeast. It shares a land border with Laos in the northeast. Cambodia has a sea coast on the Gulf of Thailand. The Dangrek mountain range in the north and Cardamom Mountains in the southwest form natural boundaries. Principal physical features include the Tonle Sap lake and the Mekong and Bassac Rivers. Cambodia remains one of the most heavily forested countries in the region, although deforestation continues at an alarming rate.

PEOPLE AND CULTURE
Ninety percent of Cambodia's population is ethnically Cambodian. Other ethnic groups include Chinese, Vietnamese, hill tribes, Cham, and Lao. Theravada Buddhism is the religion of 95% of the population; Islam, animism, and Christianity also are practiced. Khmer is the official language and is spoken by more than 95% of the population. Some French is still spoken in urban areas, and English is increasingly popular as a second language.

Angkor Wat
Over a period of 300 years, between 900 and 1200 AD, the Khmer Kingdom of Angkor produced some of the world's most magnificent architectural masterpieces on the northern shore of the Tonle Sap, near the present town of Siem Reap. The Angkor area stretches 15 miles east to west and 5 miles north to south. Some 72 major temples or other buildings dot the area. Suryavarman II built the principal temple, Angkor Wat, between 1112 and 1150. With walls nearly one-half mile on each side, Angkor Wat portrays the Hindu cosmology with the central towers representing Mount Meru, home of the gods; the outer walls, the mountains enclosing the world; and the moat, the oceans beyond. Angkor Thom, the capital city built after the Cham sack of 1177, is surrounded by a 300-foot wide moat. Construction of Angkor Thom coincided with a change from Hinduism to Buddhism. Temples were altered to display images of the Buddha, and Angkor Wat became a major Buddhist shrine.

During the 15th century, nearly all of Angkor was abandoned after Siamese attacks. The exception was Angkor Wat, which remained a shrine for Buddhist pilgrims. The great city and temples remained largely cloaked by the forest until the late 19th century when French archaeologists began a long restoration process. Concerned about further destruction and dilapidation of the Angkor complex and cultural heritage, the Cambodian Government in 1995 established the Authority for the Protection and Management of Angkor and the Region of Siem Reap (APSARA) to protect, maintain, conserve, and improve the value of the archaeological park. In December 1995 the World Heritage Committee confirmed Angkor's permanent inscription on the World Heritage List. Tourism is now the second-largest foreign currency earner in Cambodia's economy.

MODERN HISTORY
Although Cambodia had a rich and powerful past under the Hindu state of Funan and the Kingdom of Angkor, by the mid-19th century the country was on the verge of dissolution. After repeated requests for French assistance, a protectorate was established in 1863. By 1884, Cambodia was a virtual colony; soon after it was made part of the Indochina Union with Annam, Tonkin, Cochin-China, and Laos. France continued to control the country even after the start of World War II through its Vichy government. In 1945, the Japanese dissolved the colonial administration, and King Norodom Sihanouk declared an independent, anti-colonial government under Prime Minister Son Ngoc Thanh in March 1945. The Allies deposed this government in October. In January 1953, Sihanouk named his father as regent and went into self-imposed exile, refusing to return until Cambodia gained genuine independence.

Full Independence
Sihanouk's actions hastened the French Government's July 4, 1953 announcement of its readiness to grant independence, which came on November 9, 1953. The situation remained uncertain until a 1954 conference was held in Geneva to settle the French-Indochina war. All participants, except the United States and the State of Vietnam, associated themselves (by voice) with the final declaration. The Cambodian delegation agreed to the neutrality of the three Indochinese states but insisted on a provision in the cease-fire agreement that left the Cambodian Government free to call for outside military assistance should the Viet Minh or others threaten its territory.

Neutral Cambodia
Neutrality was the central element of Cambodian foreign policy during the 1950s and 1960s. By the mid-1960s, parts of Cambodia's eastern provinces were serving as bases for North Vietnamese Army and Viet Cong (NVA/VC) forces operating against South Vietnam, and the port of Sihanoukville was being used to supply them. As NVA/VC activity grew, the United States and South Vietnam became concerned, and in 1969, the United States began a series of air raids against NVA/VC base areas inside Cambodia.

Throughout the 1960s, domestic politics polarized. Opposition grew within the middle class and among leftists, including Paris-educated leaders such as Son Sen, Ieng Sary, and Saloth Sar (later known as Pol Pot), who led an insurgency under the clandestine Communist Party of Kampuchea (CPK).

The Khmer Republic and the War
In March 1970, Gen. Lon Nol deposed Prince Sihanouk and assumed power. On October 9, the Cambodian monarchy was abolished, and the country was renamed the Khmer Republic. Hanoi rejected the new republic's request for the withdrawal of NVA/VC troops and began to re-infiltrate some of the 2,000-4,000 Cambodians who had gone to North Vietnam in 1954. They became a cadre in the insurgency. The United States moved to provide material assistance to the new government's armed forces, which were engaged against both the Khmer Rouge insurgents and NVA/VC forces. In April 1970, U.S. and South Vietnamese forces entered Cambodia in a campaign aimed at destroying NVA/VC base areas. Although a considerable quantity of equipment was seized or destroyed, NVA/VC forces proved elusive and moved deeper into Cambodia. NVA/VC units overran many Cambodian Army positions while the Khmer Rouge expanded their small scale attacks on lines of communication.

The Khmer Republic's leadership was plagued by disunity among its members, the problems of transforming a 30,000-man army into a national combat force of more than 200,000 men, and spreading corruption. The insurgency continued to grow, with supplies and military support provided by North Vietnam. But inside Cambodia, Pol Pot and Ieng Sary asserted their dominance over the Vietnamese-trained communists, many of whom were purged. At the same time, the Khmer Rouge forces became stronger and more independent of their Vietnamese patrons. By 1974, Lon Nol's control was reduced to small enclaves around the cities and main transportation routes. More than 2 million refugees from the war lived in Phnom Penh and other cities.

On New Year's Day 1975, communist troops launched an offensive that, in 117 days of the hardest fighting of the war, destroyed the Khmer Republic. Simultaneous attacks around the perimeter of Phnom Penh pinned down Republican forces, while other Khmer Rouge units overran fire bases controlling the vital lower Mekong resupply route. A U.S.-funded airlift of ammunition and rice ended when Congress refused additional aid for Cambodia. Phnom Penh surrendered on April 17, 1975--5 days after the U.S. mission evacuated Cambodia.

Democratic Kampuchea
Many Cambodians welcomed the arrival of peace, but the Khmer Rouge soon turned Cambodia--which it called Democratic Kampuchea (DK)--into a land of horror. Immediately after its victory, the new regime ordered the evacuation of all cities and towns, sending the entire urban population out into the countryside to till the land. Thousands starved or died of disease during the evacuation. Many of those forced to evacuate the cities were resettled in new villages, which lacked food, agricultural implements, and medical care. Many starved before the first harvest, and hunger and malnutrition--bordering on starvation--were constant during those years. Those who resisted or who questioned orders were immediately executed, as were most military and civilian leaders of the former regime who failed to disguise their pasts.

Within the CPK, the Paris-educated leadership--Pol Pot, Ieng Sary, Nuon Chea, and Son Sen--was in control, and Pol Pot was made Prime Minister. Prince Sihanouk was put under virtual house arrest. The new government sought to restructure Cambodian society completely. Remnants of the old society were abolished, and Buddhism suppressed.

Agriculture was collectivized, and the surviving part of the industrial base was abandoned or placed under state control. Cambodia had neither a currency nor a banking system. The regime controlled every aspect of life and reduced everyone to the level of abject obedience through terror. Torture centers were established, and detailed records were kept of the thousands murdered there. Public executions of those considered unreliable or with links to the previous government were common. Few succeeded in escaping the military patrols and fleeing the country. Solid estimates of the numbers who died between 1975 and 1979 are not available, but it is likely that hundreds of thousands were brutally executed by the regime. Hundreds of thousands more died from forced labor, starvation, and disease--both under the Khmer Rouge and during the Vietnamese invasion in 1978. Estimates of the dead range from 1.7 million to 3 million, out of a 1975 population estimated at 7.3 million.

Democratic Kampuchea's relations with Vietnam and Thailand worsened rapidly as a result of border clashes and ideological differences. While communist, the CPK was fiercely anti-Vietnamese, and most of its members who had lived in Vietnam were purged. Democratic Kampuchea established close ties with China, and the Cambodian-Vietnamese conflict became part of the Sino-Soviet rivalry, with Moscow backing Vietnam. Border clashes worsened when Democratic Kampuchea's military attacked villages in Vietnam.

In mid-1978, Vietnamese forces invaded Cambodia, advancing about 30 miles before the arrival of the rainy season. In December 1978, Vietnam announced formation of the Kampuchean United Front for National Salvation (KUFNS) under Heng Samrin, a former DK division commander. It was composed of Khmer communists who had remained in Vietnam after 1975 and officials from the eastern sector--like Heng Samrin and Hun Sen--who had fled to Vietnam from Cambodia in 1978. In late December 1978, Vietnamese forces launched a full invasion of Cambodia, capturing Phnom Penh on January 7, 1979 and driving the remnants of Democratic Kampuchea's army westward toward Thailand.

The Vietnamese Occupation
On January 10, 1979, the Vietnamese installed Heng Samrin as head of state in the new People's Republic of Kampuchea (PRK). The Vietnamese Army continued to pursue Khmer Rouge forces. An estimated 600,000 Cambodians were displaced during the Pol Pot era and the Vietnamese invasion streamed to the Thai border in search of refuge between 1979 and 1981.

The international community responded with a massive relief effort coordinated by the United States through the UN Children's Fund (UNICEF) and the World Food Program. More than $400 million was provided between 1979 and 1982, of which the United States contributed nearly $100 million.

Vietnam's occupation army of an estimated 180,000 troops was posted throughout the country from 1979 to September 1989. The Heng Samrin regime's 30,000 troops were plagued by poor morale and widespread desertion. Resistance to Vietnam's occupation was extensive. A remainder of the Khmer Rouge's military forces eluded Vietnamese troops and established themselves in remote regions. A non-communist resistance movement consisting of groups that had been fighting the Khmer Rouge after 1975--including Lon Nol-era soldiers--coalesced in 1979-80 to form the Khmer People's National Liberation Armed Forces (KPNLAF), which pledged loyalty to former Prime Minister Son Sann, and Moulinaka (Movement pour la Liberation Nationale de Kampuchea), loyal to Prince Sihanouk. In 1979, Son Sann formed the Khmer People's National Liberation Front (KPNLF) to lead a political struggle for Cambodia's independence. Prince Sihanouk formed his own organization, National United Front for an Independent, Neutral, Peaceful, and Cooperative Cambodia (FUNCINPEC), and its military arm, the Armee Nationale Sihanoukienne (ANS) in 1981.

Within Cambodia, Vietnam had only limited success in establishing its client Heng Samrin regime, which was dependent on Vietnamese advisers at all levels. Security in some rural areas was tenuous, and major transportation routes were subject to interdiction by resistance forces. The presence of Vietnamese throughout the country and their intrusion into nearly all aspects of Cambodian life alienated much of the populace. The settlement of Vietnamese nationals, both former residents and new immigrants, further exacerbated anti-Vietnamese sentiment. Reports of the numbers involved vary widely, with some estimates as high as 1 million. By the end of the decade, Khmer nationalism began to reassert itself against the traditional Vietnamese enemy. In 1986, Hanoi claimed to have begun withdrawing part of its occupation forces. At the same time, Vietnam continued efforts to strengthen its client regime, the PRK, and its military arm, the Kampuchean People's Revolutionary Armed Forces (KPRAF). These withdrawals continued over the next 2 years, and the last Vietnamese troops left Cambodia in September 1989.

Peace Efforts
From July 30 to August 30, 1989, representatives of 18 countries, the four Cambodian parties, and the UN Secretary General met in Paris in an effort to negotiate a comprehensive settlement. They hoped to achieve those objectives seen as crucial to the future of post-occupation Cambodia--a verified withdrawal of the remaining Vietnamese occupation troops, the prevention of the return to power of the Khmer Rouge, and genuine self-determination for the Cambodian people. A comprehensive settlement was agreed upon on August 28, 1990.

Cambodia's Renewal
On October 23, 1991, the Paris Conference reconvened to sign a comprehensive settlement giving the UN full authority to supervise a cease-fire, repatriate the displaced Khmer along the border with Thailand, disarm and demobilize the factional armies, and prepare the country for free and fair elections. Prince Sihanouk, President of the Supreme National Council of Cambodia (SNC), and other members of the SNC returned to Phnom Penh in November 1991, to begin the resettlement process in Cambodia. The UN Advance Mission for Cambodia (UNAMIC) was deployed at the same time to maintain liaison among the factions and begin demining operations to expedite the repatriation of approximately 370,000 Cambodians from Thailand.

On March 16, 1992, the UN Transitional Authority in Cambodia (UNTAC) arrived in Cambodia to begin implementation of the UN Settlement Plan. The UN High Commissioner for Refugees began full scale repatriation in March 1992. UNTAC grew into a 22,000-strong civilian and military peacekeeping force to conduct free and fair elections for a constituent assembly.

Over 4 million Cambodians (about 90% of eligible voters) participated in the May 1993 elections, although the Khmer Rouge or Party of Democratic Kampuchea (PDK), whose forces were never actually disarmed or demobilized, barred some people from participating. Prince Ranariddh's FUNCINPEC Party was the top vote recipient with a 45.5% vote, followed by Hun Sen's Cambodian People's Party and the Buddhist Liberal Democratic Party, respectively. FUNCINPEC then entered into a coalition with the other parties that had participated in the election. The parties represented in the 120-member assembly proceeded to draft and approve a new constitution, which was promulgated September 24, 1993. It established a multiparty liberal democracy in the framework of a constitutional monarchy, with the former Prince Sihanouk elevated to King. Prince Ranariddh and Hun Sen became First and Second Prime Ministers, respectively, in the Royal Cambodian Government (RGC). The constitution provides for a wide range of internationally recognized human rights.

In 1997, most of the remaining Khmer Rouge fighters accepted a government amnesty and laid down their arms, putting an end to nearly three decades of war. On October 4, 2004, the Cambodian National Assembly ratified an agreement with the United Nations on the establishment of a tribunal to try senior leaders responsible for the atrocities committed by the Khmer Rouge. The tribunal opened its first trial, against former S-21 prison chief Kaing Guek Eav (aka Duch), on March 30, 2009. Four more former Khmer Rouge leaders remain in custody awaiting trial. Donor countries have provided over $68 million to date in support of the tribunal, and in September 2008, the United States pledged $1.8 million.

GOVERNMENT AND POLITICAL CONDITIONS
Cambodia is a constitutional monarchy, and its constitution provides for a multiparty democracy. The Royal Government of Cambodia, formed on the basis of elections internationally recognized as free and fair, was established on September 24, 1993.

The executive branch comprises the king, who is head of state; an appointed prime minister; ten deputy prime ministers, 16 senior ministers, 26 ministers, 206 secretaries of state, and 205 undersecretaries of state. The bicameral legislature consists of a 123-member elected National Assembly and a 61-member Senate. The judiciary includes a Supreme Court, lower courts, and an internationalized court with jurisdiction over the serious crimes of the Khmer Rouge era. Administrative subdivisions are 23 provinces and 1 municipality.

Compared to its recent past, the 1993-2003 period was one of relative stability for Cambodia. However, political violence continued to be a problem. In 1997, factional fighting between supporters of Prince Norodom Ranariddh and Hun Sen broke out, resulting in more than 100 FUNCINPEC deaths and a few Cambodian People's Party (CPP) casualties. Some FUNCINPEC leaders were forced to flee the country, and Hun Sen took over as Prime Minister. FUNCINPEC leaders returned to Cambodia shortly before the 1998 National Assembly elections. In those elections, the CPP received 41% of the vote, FUNCINPEC 32%, and the Sam Rainsy Party (SRP) 13%. Due to political violence, intimidation, and lack of media access, many international observers judged the elections to have been seriously flawed. The CPP and FUNCINPEC formed another coalition government, with CPP the senior partner. Cambodia's first commune elections, held in February 2002 to select chiefs and members of 1,621 commune (municipality) councils, also were marred by political violence and fell short of being free and fair by international standards.

National Assembly elections in July 2003 failed to give any one party the two-thirds majority of seats required under the constitution to form a government. A political stalemate ensued which was not resolved until July 8, 2004, when the National Assembly approved a controversial addendum to the constitution in order to require a vote on a new government. The vote took place on July 15, and the National Assembly approved a new coalition government comprised of the CPP and FUNCINPEC, with Hun Sen as Prime Minister and Prince Norodom Ranariddh as President of the National Assembly. The SRP, with support from various non-governmental organizations (NGOs), asserted the addendum was unconstitutional and boycotted the vote.

On October 7, 2004, King Sihanouk abdicated the throne due to illness. On October 14, the Cambodian Throne Council selected Prince Norodom Sihamoni to succeed Sihanouk as King. King Norodom Sihamoni officially ascended the throne in a coronation ceremony on October 29, 2004.

In February 2005, the National Assembly voted to lift the parliamentary immunity of three opposition parliamentarians, including SRP leader Sam Rainsy, in connection with lawsuits filed against them by members of the ruling parties. One of the parliamentarians, Cheam Channy, was arrested and later tried, while Sam Rainsy went into self-imposed exile. In October 2005, the government arrested critics of Cambodia's border treaties with Vietnam and later detained four human rights activists following International Human Rights Day in December. In January 2006, the political climate improved with the Prime Minister's decision to release all political detainees and permit Sam Rainsy's return to Cambodia.

Following public criticism by Hun Sen, Prince Ranariddh resigned as President of the National Assembly in March 2006. He later broke with FUNCINPEC and founded a new party, the Norodom Ranariddh Party (NRP). In 2007, Ranariddh was convicted of corruption by a Cambodian court and fled to Malaysia to avoid imprisonment. In October 2008, he received a royal pardon and returned to Cambodia. Shortly afterward, he announced that he was withdrawing from politics.

Cambodia's second commune elections were held in April 2007, followed by National Assembly elections in July 2008. In both cases, there was little of the pre-election violence that preceded the 2002 and 2003 elections. Both polls resulted in victories for the Cambodian People's Party, with the Sam Rainsy Party emerging as the main opposition party and the royalist parties showing weakening support. The new Assembly inaugurated in September 2008 is led by a coalition of the CPP (90 seats) and FUNCINPEC (2 seats). The NRP (2 seats) does not identify itself with either the government or the opposition, but has announced its intention to ally with FUNCINPEC. The SRP (26 seats) and the Human Rights Party led by Kem Sokha (3 seats) are in opposition. The CPP-led coalition retained Hun Sen as Prime Minister, as well as most of the key leaders from the previous government, and all ministers are from the CPP.

In May 2009, non-universal elections were held when commune council members chose representatives to district councils, city councils, and provincial councils, which will have administrative and budgetary powers at the local level.

The 1993 constitution provides for a wide range of internationally recognized human rights, including freedom of the press. While freedom of the press has improved markedly in Cambodia since the adoption of the constitution, limitations still exist on mass media. Much of the written press, while considered largely free, has ties to individual political parties or factions and does not seek to provide objective reporting or analysis. Cambodia has an estimated 25 Khmer-language newspapers that are published regularly. Of these, eight are published daily. There are two major English-language newspapers, one of which is produced daily. Broadcast media, in contrast to print, is more closely controlled. It tends to be politically affiliated, and access for opposition parties is extremely limited.

Principal Government Officials
King and Head of State--His Majesty Norodom Sihamoni
Prime Minister and Head of Government--Hun Sen
President of the Senate--Chea Sim
President of National Assembly--Heng Samrin

Cambodia's embassy in the United States is located at 4530 16th Street NW, Washington DC 20011; tel: (202) 726-7742; fax: (202) 726-8381.

ECONOMY
From 2004-2007, the Cambodian economy expanded by more than 10% per year, with the garment sector and the tourism industry driving the growth, and inflation remaining relatively low. Growth slowed in 2008 with the onset of the global recession, and rising food and fuel prices pushed inflation into double digits. The economy is heavily dollarized; the dollar and riel can be used interchangeably. Cambodia remains heavily reliant on foreign assistance--about half of the central government budget depends on donor assistance. Foreign direct investment (FDI) has increased 12-fold since 2004 as sound macroeconomic policies, political stability, regional economic growth, and government openness towards investment attract growing numbers of investors.

Manufacturing output is concentrated in the garment sector, and garments dominate Cambodia's exports, especially to the U.S. The industry expanded rapidly from the mid-1990s until 2008, employing 350,000 workers and generating $3 billion in annual revenue at its peak. However, the global economic slowdown caused a drop in demand, resulting in over 50,000 workers being laid off in late 2008 and early 2009. Tourism, Cambodia’s other main foreign currency earner, has also been hurt by the global downturn. The number of tourists coming to Cambodia increased to approximately two million in 2008. However, in the first half of 2009 the industry contracted more than 15%. The service sector is heavily concentrated in trading activities and catering-related services. Exploratory drilling for oil and natural gas began in 2005. It is not yet clear if commercial extraction is viable or how large Cambodia's reserves are. If viable, commercial extraction is likely to start early in the next decade.

In spite of recent progress, the Cambodian economy continues to suffer from the legacy of decades of war and internal strife. Per capita income and education levels are lower than in most neighboring countries. Infrastructure remains inadequate, although road networks are improving rapidly. Most rural households depend on agriculture and its related subsectors. Corruption and lack of legal protections for investors continue to hamper economic opportunity and competitiveness. The economy also has a poor track record in creating jobs in the formal sector, and the challenge will only become more daunting in the future since 50% of the population is under 20 years of age and large numbers of job seekers will begin to enter the work force over the next 10 years.

FOREIGN RELATIONS
Cambodia has established diplomatic relations with most countries, including the United States. The country is a member of most major international organizations, including the UN and its specialized agencies, and became a member of the Association of Southeast Asian Nations (ASEAN) in 1998.

Cambodia is a member of the World Bank, the International Monetary Fund, and the Asian Development Bank (ADB). On October 13, 2004, Cambodia became the 148th member of the World Trade Organization (WTO).

U.S.-CAMBODIAN RELATIONS
In the past three years, bilateral relations between the U.S. and Cambodia have deepened and broadened. With the lifting of a congressional ban to provide direct assistance to the Cambodian Government, more direct technical assistance has become feasible. U.S. assistance to Cambodia administered by the U.S. Agency for International Development (USAID) mission in 2008 totaled over $57 million for programs in health, education, governance, and economic growth.

The U.S. supports efforts in Cambodia to combat terrorism, reduce the prevalence of HIV/AIDS, build democratic institutions, promote human rights, foster economic development, eliminate corruption, achieve the fullest possible accounting for Americans missing from the Indochina conflict, and to bring to justice those most responsible for serious violations of international humanitarian law committed under the Khmer Rouge regime.

Between 1955 and 1963, the United States provided $409.6 million in economic grant aid and $83.7 million in military assistance. This aid was used primarily to repair damage caused by Cambodia's war of independence from France, to support internal security forces, and for the construction of an all-weather road to the seaport of Sihanoukville, which gave Cambodia its first direct access to the sea and access to the southwestern hinterlands. Relations deteriorated in the early 1960s. Diplomatic relations were broken by Cambodia in May 1965, but were reestablished on July 2, 1969. U.S. relations continued after the establishment of the Khmer Republic until the U.S. mission was evacuated on April 12, 1975. During the 1970-75 war, the United States provided $1.18 billion in military assistance and $503 million in economic assistance. The United States condemned the brutal character of the Khmer Rouge regime between 1975 and 1979. The United States opposed the subsequent military occupation of Cambodia by Vietnam, and supported ASEAN's efforts in the 1980s to achieve a comprehensive political settlement of the problem. This was accomplished on October 23, 1991, when the Paris Conference reconvened to sign a comprehensive settlement.

The U.S. Mission in Phnom Penh opened on November 11, 1991, headed by career diplomat Charles H. Twining, Jr., who was designated U.S. Special Representative to the SNC. On January 3, 1992, the U.S. lifted its embargo against Cambodia, thus normalizing economic relations with the country. The United States also ended blanket opposition to lending to Cambodia by international financial institutions. When the freely elected Royal Government of Cambodia was formed on September 24, 1993, the United States and the Kingdom of Cambodia immediately established full diplomatic relations. The U.S. Mission was upgraded to a U.S. Embassy, and in May 1994 Mr. Twining became the U.S. Ambassador. After the factional fighting in 1997 and Hun Sen's legal machinations to depose First Prime Minister Ranariddh, the United States suspended bilateral assistance to the Cambodian Government. At the same time, many U.S. citizens and other expatriates were evacuated from Cambodia and, in the subsequent weeks and months, more than 40,000 Cambodian refugees fled to Thailand. The 1997 events also left a long list of uninvestigated human rights abuses, including dozens of extra-judicial killings. From 1997 until the lifting of legislative restrictions on bilateral assistance in 2007, U.S. assistance to the Cambodian people was provided mainly through non-governmental organizations, which flourish in Cambodia.