GDP per capita

Cambodia's GDP per capita

Since the rule of the Khmer Rouge regime in the 1970s, Cambodia's GDP per capita has increased exponentially.

While Cambodia still lags behind ASEAN at large, it is doing better compared to the low income cohort. While the growth of low income countries stymied in recent 5-10 years, Cambodia didn't, showing that Cambodia is successfully developing and catching up to the lower middle income cohort.

Cambodia's GDP per capita in early 1990's was above Vietnam's, which is impressive given it was until just recently under Vietnamese military occupation. A contributing factor

Despite this, and a much larger population, in the following years Vietnam managed to grow faster and eventually achieve much higher GDP per capita than Cambodia in recent years. This may be due to various factors such as industry sector opportunities for Vietnam under Chinese capital investment or corruption and rent seeking activity in Cambodia.

The pivotal Land Laws of 1992

Following decades of revolution, civil conflict, war and occupation, land ownership in Cambodia was severely unregulated which posed a challenge to the emerging capitalist system. In response to this, the Land Laws were ratified in 1992, which clarified land ownership rights and allowed for better utilization of capital.

What is GDP?

GDP or gross domestic product, as defined by the IMF, measures the monetary value of goods and services produced in a country, typically quoted on annual basis. It can be understood as the gross output generated within the borders of a country.

GDP is composed of goods and services produced for sale in the market and also includes some non-market production, such as defense, education and other services provided by the government.

Finding GDP per capita

GDP per capita is the GDP divided by the total population of the country. It is an important indicator of the level of income in a country and its living standards.

As an arithmetic average, GDP per capita glosses over an important measure of a country's citizens' true average wealth - the wealth disparity between the ultra-rich and the poorest in the society. Some metrics can be used to measure this wealth disparity, such as the Gini coefficient. We discuss this more here. Bearing this potential shortcoming in mind, however, we can reasonably use GDP per capita as a comparison benchmark between different economies.