Despite recent progress, the Cambodian economy continues to suffer from the effects of decades of civil war, internal strife and rampant corruption. The per capita income is rapidly increasing, but is low compared with other countries in the region. Most rural households depend on agriculture and its related sub-sectors. Rice, fish, timber, garments and rubber are Cambodia's major exports, and the United States, Singapore, Japan, Thailand, China, Indonesia and Malaysia are its major export partners.

War and brutal totalitarianism in the 1970s created famine in Cambodia. Desperate farm families consumed their rice seeds and many traditional varieties became difficult to find. In the 1980s the International Rice Research Institute (IRRI) reintroduced more than 750 traditional rice varieties to Cambodia from its rice seed bank in the Philippines (Jahn 2006,2007). These varieties had been collected in the 1960s. In 1987, the Australian government funded IRRI to assist Cambodia to improve its rice production. By 2000, Cambodia was once again self-sufficient in rice.

The recovery of Cambodia's economy slowed dramatically in 1997糟98, due to the regional economic crisis, civil violence, and political infighting. Foreign investment and tourism also fell off drastically. Since then however, growth has been steady. In 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 5.0%. Despite severe flooding, GDP grew at 5.0% in 2000, 6.3% in 2001, and 5.2% in 2002. Tourism was Cambodia's fastest growing industry, with arrivals increasing from 219,000 in 1997 to 1,055,000 in 2004. During 2003 and 2004 the growth rate remained steady at 5.0%, while in 2004 inflation was at 1.7% and exports at $1.6 billion US dollars. As of 2005, GDP per capita in PPP terms was $2,200, which ranked 178th (out of 233) countries.

Angkor Wat, the biggest tourist draw of CambodiaThe population often lacks education and productive skills, particularly in the poverty-ridden countryside, which suffers from a lack of basic infrastructure. Fear of renewed political instability and corruption within the government discourage foreign investment and delay foreign aid, although there has been significant assistance from bilateral and multilateral donors. Donors pledged $504m to the country in 2004,while the Asian Development Bank alone has provided $850m in loans, grants, and technical assistance.

The tourism industry is the country's second-greatest source of hard currency after the textile industry. 50% of visitor arrivals are to Angkor, and most of the remainder to Phnom Penh. Other tourist hotspots include Sihanoukville in the southeast which has several popular beaches, and the nearby area around Kampot including the Bokor Hill Station.