Case Study Country - Cambodia

The history of conflict in Cambodia is very complex, and it has displayed characteristics of ethnic civil war, interstate war and ideological war over the three decades from 1960 to 1990.

Conflict was fuelled mainly by a struggle for political control over the country. Initially this was in response to the harsh polices of Sihanouk in the 1960s; and the greed and corruption of Sihanouk s successor, Lon Nol who seized power in 1970. During the Lon Nol period it is estimated that 700,000 people were killed and millions displaced from the countryside to the towns and Phnom Penh in an attempt to escape fighting. The Khmer Rouge seized power in 1975 and one of the most brutal periods in Cambodia s history followed. It is estimated that between one and three million people died and large numbers were displaced in the Khmer Rouge s brutal attempt to restructure society into a Maoist, peasant dominated cooperative. In 1979, the Vietnamese overthrew the Khmer Rouge. Famine followed in the early 1980s and this together with continued fighting between the government in Cambodia and three opposition factions outside Cambodia, prompted about 500,000 people to flee to Thailand as refugees. Fighting continued throughout the 1980s, supported by different superpowers intent on fighting their own ideological wars by proxy on Cambodian soil.

The signing of the Paris Peace Accords in 1991 marked the beginning of steady progress towards peace, democratically elected governments, steady economic growth and the return and reintegration of displaced people. In Cambodia, Gross Domestic Product (GDP) growth has increased from 1.0% p.a. in 1997 to 4.3% p.a. in 1999. With inflation fairly stable at 4.5% p.a., approximately eight medium-sized microfinance institutions are now operating and there is high demand for financial services.