Cambodian Economic Development Strategy: From Triangle to Rectangle

The “Triangle Strategy” of the Government, which was adopted after the July 1998 election, is designed to achieve this Vision. Restoring peace and stability, and maintaining security for the nation and people, which formed the first side of the “Triangle” was accomplished during the last two years. Cambodia's integration into the region and normalization of relationships with the international community, the second side of the “Triangle” was also achieved. Cambodia regained its seat at the United Nations and became the 10th member of the Association of South East Asian Nations (ASEAN) and the process of joining the World Trade Organization (WTO) is well advanced.
The third side of the Government's strategic triangle is to promote economic and social development through the implementation of an extensive reform program. Significant progress has been made in the implementation of these reforms, and economic growth has been strong in the last two years despite the impact of the 2000 floods. However, much remains to be done.
The strategies are: (1) to foster broad-based sustainable economic growth with equity, with the private sector playing the leading role; (2) to promote social and cultural development by improving the access of the poor to education, health, water and sanitation, power, credit, markets, information and appropriate technology; and (3) to promote sustainable management and use of natural resources and the environment (4) to improve the governance environment through effective implementation of the Governance Action Plan (GAP).

Cham Prasidh, Phnom Penh, August 30, 2005

Political Stability
Macro-economic Stability
Sound, Transparent and Predictable Legal Framework
Access to Key Markets through Trade Preferences in terms of MFN/GSP

Excerpt from Prime Minister HUN SEN’s speech at the 7thConsultative Group Meeting –Dec 6, 2004

Sustainable future economic growth in Cambodia remains heavily dependent on the ability of the government to diversify the economy and broaden the base for growth. The challenge for Cambodia in the next 10 years is to strengthen governance in order to attract more private investments and ensure competitiveness vis-à-vis neighboring countries so that the country can gain from its potentials in agriculture, agro-industry, labor-intensive industry, processing industry, tourism and in some other production and services.
To this end, much more remain to be done to remove impediments to private sector development by focusing on the improvement to the investment climate, including the legal, regulatory and administrative environment. The reform should also allow for improvements in access to key factor inputs, including skilled personnel and competitive access to finance.

The Rectangular Strategy was initiated in 2004 in order to meet the new challenges for socio-economic development in Cambodia. The core of the Rectangular Strategyis good governance focused at four reform areas:•(1) anti-corruption,•(2) legal and judicial reform,•(3) public administration reform including decentralization and deconcentration, and•(4) reform of the armed forces, especially demobilization.