policy

The general perception of the garment and textile industry in the global South is fueled only by images of dismal labor conditions and unsuitable factories, descriptions of labor clashes with police, and analyses of low wages and exploitative multinational corporations.

These memoirs are an eloquent account of Prince Norodom Sihanouk’s fight for Cambodian independence – first against France and then, for over twenty years, against the United States.

The widespread destruction of Cambodia’s forests in recent decades saw the loss of the last major area of pristine tropical forest in South-east Asia. The proceeds of often indiscriminate logging and sale of forest and plantation concessions have enriched the country’s ruling elite but cost its rural population dearly. It was, moreover, a process in which foreign aid donors were deeply involved, even if the outcome was contrary to their intentions.

Cambodia is poised to join a new generation of Asian frontier economies transitioning from low-income to emerging-market. But the path to greater and more shared prosperity requires a solid foundation of sound macroeconomic policies, enabling new growth drivers, tackling a highly dollarized and fragmented financial system, and creating more fiscal policy space to help meet Cambodia's vast development needs.

This study examines the challenges and issues facing policymakers in highly dollarized economies. Focusing on Cambodia, which achieved almost complete dollarization during 1991-95, the authors review recent developments in the literature on dollarization and examine the costs and benefits of dollarization in Cambodia, including the ensuing macroeconomic policy implications.