INTRODUCTION

The service industry, encompassing a wide range of sectors such as finance, insurance, banking, tourism, education, transportation, and others, is one of the most significant contributors to a country’s industrialization and economic growth. Cambodia, with its remarkable economic growth rate averaging 7.7 percent annually from 1998 to 2019, is recognized as the fastest-growing economy in Asia (World Bank, 2023). To sustain this growth, Cambodia needs to develop its service industry further. As of 2023, Cambodia’s service sector contributed significantly to the country’s GDP, accounting for 36.2 percent, next to industry (Statista, 2024). Notably, between 2012 and 2016, the service sector attracted over 50.0 percent of Cambodia’s total foreign direct investment (FDI) inflows, surpassing Myanmar (43.0 percent) and even Malaysia (38.0 percent) (Aquarii BD, 2022).

This chapter aims to provide valuable insights into Cambodia’s overall transport- tation business landscape. Although the role of transportation in the service industry’s development is well recognized, recent studies indicate that this sector confronts various obstacles that impede its growth. In addition to the existing barriers, Cambodian transportation enterprises have encountered significant obstacles due to the global COVID-19 pandemic, which has continued to affect them during the recovery phase. The global pandemic forced many businesses in the service sector to suspend their operations, while some went bankrupt and finally closed down (Dash & Dash, 2021). In light of these challenges, based on primary and secondary data, this chapter seeks to offer a comprehensive understanding of Cambodia’s transportation industry within the service sector by signifying its crucial role in Cambodia’s economic development and identifying factors that contribute to its prospects and pose challenges.

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