A Cambodian man walks his cattle on a rural road on the outskirts of Phnom Penh, Oct. 13, 2004. High agricultural output, especially of rice, and expansion of international trade expanded Cambodian economic growth last year, the World Bank said Thursday, March 30, 2006. Cambodia received more 1.4 million visitors and produced nearly 6 million tons of rice last year, according to government statistics. (AP Photo/David Longstreath, File) The Associated Press/PHNOM PENH, Cambodia
By Ker Munthit
PHNOM PENH, Cambodia (AP) - Despite healthy growth in 2005, Cambodia's economy gives cause for concern because of its narrow base, the World Bank said Thursday.
"Cambodia's economy showed unexpected strength in 2005 with initial estimates of GDP growth at 7 percent," said the bank's latest report on the Asian region's economic development.
The new figure is almost a full point higher than the last projection, of 6.1 percent, that the bank had made in November for 2005 growth.
The bank said the increased growth was due to a "surging agricultural sector," with crop production -- especially rice -- and fishery yields significantly higher than in 2004. Expansion of international trade also was a contributor.
Although last year's growth was "impressive," diversifying the economy is necessary to keep it expanding, Rob Taliercio, a World Bank senior country economist, said at a news conference discussing the findings.
"The Cambodian agricultural sector seems to be characterized by a boom and bust cycle," he said, noting that growth in the sector was negative in 2002 and 2004, but positive in 2003 and 2005.
The fluctuation in the agricultural growth rates "creates a lot of vulnerability for poor people," commented Nisha Agrawal, the bank's country manager, calling for the government to implement a better irrigation policy and investment program to sustain the sector's growth.
Garment exports, Cambodia's main dollar earner, grew 10.6 percent last year to US$2.2 billion (euro1.8 billion) largely because of the restrictions imposed by the United States and the European Union on Chinese garment imports, the bank said.
About 71 percent of Cambodian garments were exported to the U.S. and 23 percent to EU markets, it said.
An increase in tourist arrivals and stable fiscal and monetary performance also boosted growth.
Cambodia received more 1.4 million visitors and produced nearly 6 million tons of rice last year, according to government statistics.
Prime Minister Hun Sen said Wednesday that Cambodia has a surplus of more than 2 million tons of rice above that needed for domestic consumption that can be exported.
"Cambodia's economy showed unexpected strength in 2005 with initial estimates of GDP growth at 7 percent," said the bank's latest report on the Asian region's economic development.
The new figure is almost a full point higher than the last projection, of 6.1 percent, that the bank had made in November for 2005 growth.
The bank said the increased growth was due to a "surging agricultural sector," with crop production -- especially rice -- and fishery yields significantly higher than in 2004. Expansion of international trade also was a contributor.
Although last year's growth was "impressive," diversifying the economy is necessary to keep it expanding, Rob Taliercio, a World Bank senior country economist, said at a news conference discussing the findings.
"The Cambodian agricultural sector seems to be characterized by a boom and bust cycle," he said, noting that growth in the sector was negative in 2002 and 2004, but positive in 2003 and 2005.
The fluctuation in the agricultural growth rates "creates a lot of vulnerability for poor people," commented Nisha Agrawal, the bank's country manager, calling for the government to implement a better irrigation policy and investment program to sustain the sector's growth.
Garment exports, Cambodia's main dollar earner, grew 10.6 percent last year to US$2.2 billion (euro1.8 billion) largely because of the restrictions imposed by the United States and the European Union on Chinese garment imports, the bank said.
About 71 percent of Cambodian garments were exported to the U.S. and 23 percent to EU markets, it said.
An increase in tourist arrivals and stable fiscal and monetary performance also boosted growth.
Cambodia received more 1.4 million visitors and produced nearly 6 million tons of rice last year, according to government statistics.
Prime Minister Hun Sen said Wednesday that Cambodia has a surplus of more than 2 million tons of rice above that needed for domestic consumption that can be exported.
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