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UN-sponsored elections in 1993 helped restore some semblance of
normalcy, as did the rapid diminishment of the Khmer Rouge in
the mid-1990s. A coalition government, formed after national
elections in 1998, brought renewed political stability and the
surrender of remaining Khmer Rouge forces.
Cambodia's economy
slowed dramatically in 1997-98 due to the regional economic
crisis, civil violence, and political infighting. Foreign
investment and tourism fell off. In 1999, the first full year of
peace in 30 years, progress was made on economic reforms and
growth resumed at 4%. GDP growth for 2000 had been projected to
reach 5.5%, but the worst flooding in 70 years severely damaged
agricultural crops, and high oil prices hurt industrial
production, and growth for the year is estimated at only 4%.
Tourism is Cambodia's fastest growing industry, with arrivals up
34% in 2000. The long-term development of the economy after
decades of war remains a daunting challenge. The population
lacks education and productive skills, particularly in the
poverty-ridden countryside, which suffers from an almost total
lack of basic infrastructure. Fear of renewed political
instability and corruption within the government discourage
foreign investment and delay foreign aid. On the brighter side,
the government is addressing these issues with assistance from
bilateral and multilateral donors.
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