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 low compared with most neighboring countries. Infrastructure remains inadequate. Most rural households depend on agriculture and its related subsectors. Manufacturing output is concentrated in the garment-manufacturing sector. This sector started to expand rapidly in the mid-1990s and now employs more than 200,000 workers but faces an uncertain future with the end of textile quotas at the end of 2004. The other main foreign currency earner is tourism. After several years of rapid growth, the tourism sector has slowed in 2002-03, mainly due to SARS-related fears. The service sector is heavily concentrated in trading activities and catering-related services.

Cambodia's real GDP grew at 6.3% in 2001 and 4.5% in 2002, with almost all of the growth coming from the garment sector. Inflation was less than 3%, and the national currency, the riel, is relatively stable. The economy is heavily dollarized; the dollar and riel can be used interchangeably. Cambodia remains heavily reliant on foreign assistance --in 2001, 58% of the central government budget depended on donor assistance. Cambodia has had trouble attracting foreign direct investment, due in part to the unreliable legal environment. New FDI levels fell steadily from 1999-2001. In 2002, FDI was a mere $135 million. 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 40% of the population is under 15 years of age and large numbers will begin to enter the work force over the next 10 years.

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, except 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. France established the Angkor Conservancy in 1908 to direct restoration of the Angkor complex. For the next 64 years, the conservancy worked to clear away the forest, repair foundations, and install drains to protect the buildings from their most insidious enemy: water. After 1953, the conservancy became a joint project of the French and Cambodian Governments. Some temples were carefully taken apart stone by stone and reassembled on concrete foundations. Angkor Wat has attracted international tourism to Cambodia, which is growing at a rapid pace. It is now the second-largest foreign currency earner in the economy.