The government recognises that Cambodia still has a long way to go and numerous obstacles to overcome to achieve long-term progress and prosperity. During the third mandate, 2003–08, the government adopted an economic policy that aimed to promote growth by opening to the free market, increasing foreign direct investment, promoting privatisation and joining the World Trade Organization (WTO).

The rapid changes during the last few years toward democracy and a free market economy have met both notable successes and worrying setbacks. The changes have brought new challenges for the country, the government and non-government organisations (NGOs), particularly in terms of the welfare of rural people, the very poor and the marginalised. Despite the efforts of the international and community and Cambodians, the democratic space is still narrow and social injustice is widespread.

The main factors affecting this are a legislative system flawed on every level, from the drafting of new legislation to its enforcement, and a lack of training and financial resources that leads to corruption and impunity. Some powerful officials and investors take the opportunity to increase their profits through illegal activities, cheating and exploiting the poor. As a result , rural communities suffer from declining natural resources, land grabbing and encroachment, human rights violations and poor access to public services such as health, education, agricultural development and local governance.

 Presently, more than 70 percent of the Cambodian population of 13.8 million is engaged in subsistence farming. The recent decline of natural resources is a major problem for the livelihood of a community that relies on agriculture. The forest, which is the most important natural resource in Cambodia, is rapidly decreasing due to illegal and unsustainable logging. The loss of forest leads to the degradation of the environment and natural disasters such as droughts and floods, which in turn contribute to the destabilisation of the national economy. C ontinued large-scale commercial logging and fishing lot concessions will negatively affect rural livelihoods. T his poses a serious problem, since it could threaten future development.