the end of the civil war have
improved aid flows and economic activity has increased, but
underlying weaknesses - a high poverty rate, poor education rates, a
weak legal system, and low administrative capacity - risk
undermining planned economic reforms. Burundi grew about 5 percent
in 2006. Delayed disbursements of funds from the World Bank may add
to budget pressures in 2007. Burundi will continue to remain heavily
dependent on aid from bilateral and multilateral donors.

Cambodia
In 1999, the first full year of peace in 30 years, the
government made progress on economic reforms. The US and Cambodia
signed a Bilateral Textile Agreement, which gave Cambodia a
guaranteed quota of US textile imports and established a bonus for
improving working conditions and enforcing Cambodian labor laws and
international labor standards in the industry. From 2001 to 2004,
the economy grew at an average rate of 6.4%, driven largely by an
expansion in the garment sector and tourism. With the January 2005
expiration of a WTO Agreement on Textiles and Clothing,
Cambodia-based textile producers were forced to compete directly
with lower-priced producing countries such as China and India.
Better-than-expected garment sector performance led to about 6%
growth per year in 2005-06. Faced with the possibility that its
vibrant garment industry, with more than 200,000 jobs, could be in
serious danger, the Cambodian government has committed itself to a
policy of continued support for high labor standards in an attempt
to maintain favor with buyers. The tourism industry continues to
grow rapidly, with foreign visitors surpassing 1 million for per
year beginning in 2005. In 2005, exploitable oil and natural gas
deposits were found beneath Cambodia's territorial waters,
representing a new revenue stream for the government once commercial
extraction begins in the coming years. Mining also is attracting
significant investor interest, particularly in the northeastern
parts of the country. The long-term development of the economy
remains a daunting challenge. The Cambodian government is working
with bilateral and multilateral donors, including the World Bank and
IMF, to address the country's many pressing needs. The major
economic challenge for Cambodia over the next decade will be
fashioning an economic environment in which the private sector can
create enough jobs to handle Ca