EXOGENOUS TRIGGERS, ENDOGENOUS INFLUENCES

The global financial and economic shock of 2007–09 is the third major economic crisis to have buffeted Cambodia in its post–conflict period, coming in the wake of the food crisis of 2007–08 and just a decade after the Asian financial crisis of 1997–98 (the “triple crises”). Cambodia's post–conflict history can be divided into two periods: 1991–98, referred to as the early phase of transition during which the first of the triple crises, the Asian financial crisis, occurred; and 1998 to the present, the late phase of transition during which the food and economic shocks transpired. A stocktake of the developments in Cambodia's post–conflict history suggests that the country has come a long way in reinstituting the foundations of a capitalist economic and procedural democracy but has yet to make significant headway in economic sophistication and substantive democracy.

The triple crises were different, yet had similar characteristics. They were all exogenously–driven shocks with their own specific causes but their effects were shaped by the country's situation at the time. In terms of magnitude of impact, the global financial and economic downturn was the worst of the three crises. That it caused the first ever growth contractions in the post–conflict period was sufficient rationale for the series of studies that substantiate this book. Like the two shocks that preceded it however, the way it impacted on Cambodia cannot be understood in isolation from the overall post– conflict milieu. The thesis here is not that endogenous factors caused the crisis. Country circumstances would hardly be able to account for that which is international in origin (Rose and Spiegel 2009). It is simply that endogenous factors shaped the impact of the crisis and a historical, as opposed to a static, analysis better illuminates the nature of the impact. For instance, the growth contractions cannot be explained outside of Cambodia's post-conflict growth pattern while any poverty effect was most likely due to the cumulative impacts of the global economic slump and the hike in food prices. By the same token, sustainable recovery from the downturn rests on deeper reforms affecting major economic and political aspects of the country's post- conflict milieu.