Cambodia & Scam Centers: The Economic Price of a Necessary Clean-Up

As Phnom Penh steps up its fight against online scam centres, a shadow economy that had come to shape coastal towns, real estate and local employment, the country is going through a delicate macroeconomic adjustment. Between international pressure, regional shocks and a stated commitment to clean up the sector, Cambodge Mag tries to untangle what this transition is really costing — and who is paying for it.

Illustration pic only — © Cambodge Mag

A shadow economy imported from elsewhere

Online scam centres did not originate in Cambodia: as in several of its neighbours, the country simply became fertile ground for them. Transnational criminal networks, many with roots in China, relocated their operations to Southeast Asia from 2018 onward, as Beijing tightened its laws on online gambling. Cambodge Mag made this point back in April, in response to the Wall Street Journal's coverage of the loaded term 'Scambodia': reducing a country of 18 million people to that shorthand amounts to attributing to it the paternity of a criminal industry that was, to a large extent, imposed on it from outside.

The figures put forward by international organisations give a sense of the scale of the problem the Cambodian authorities inherited. Amnesty International, citing work by the United States Institute of Peace and the consultancy Humanity Research Consulting, estimates annual revenue generated by these centres at between 12.5 and 19 billion dollars — a considerable sum against a national GDP of roughly 30 billion dollars. A single platform, Huione, is alleged to have facilitated transactions exceeding 24 billion dollars since 2021, a figure that illustrates the scale of the system the government has committed to dismantling.

Money that had come to run through the real economy

What makes the equation particularly delicate for the authorities is that this money, whatever its criminal origin, did not stay confined to sealed-off circuits. It physically reshaped entire towns. In Sihanoukville, monthly house rents rose from 1,000 to 15,000 dollars as new rental demand moved in, and whole segments of the local retail economy reorganised themselves around this activity. Drivers, landlords, restaurant owners, real-estate agencies, the construction sector: part of the coastal economy had been built, directly or indirectly, around this money.

It is this dependency that Phnom Penh's crackdown is now exposing, and it partly explains the macroeconomic slowdown observed in 2026. The International Monetary Fund has lowered its 2026 growth forecast to 3%, down from 5.3% in 2025 and 6% in 2024, citing among other things the reputational impact of these activities on tourism and financial stability — alongside, it should be stressed, much heavier factors such as the surge in energy prices linked to the conflict in the Middle East. The World Bank projects 3.9%, AMRO 4.9%. The consultancy Mekong Strategic Capital estimates that the country's underlying growth potential would remain close to 8% once cyclical effects are stripped out — the regional conflict, border tensions and the adjustment linked to the crackdown on scam centres.

The government at the helm, under international pressure

Faced with this challenge, the Cambodian authorities have taken a series of concrete steps over the past year: the extradition of tycoon Chen Zhi to China, the orderly liquidation of Prince Bank, a freeze on property sales at several sites linked to the targeted group, raids on more than a hundred locations and several thousand arrests. On 12 June 2026, Cambodia joined 24 countries, including Australia, Japan and the United States, in an international initiative against technology-facilitated trafficking. Prime Minister Hun Manet has publicly pledged to 'eliminate' these networks.

This effort is nonetheless unfolding against a backdrop of growing external pressure, which itself weighs on the Cambodian economy. The US Treasury designated the Prince Group a transnational criminal organisation, sanctioned 146 entities linked to its network — casinos, real estate, a bank — and seized roughly 15 billion dollars in assets, mostly in cryptocurrency. In June 2026, nine further individuals and 26 entities were targeted, along with the financial conglomerate Huione, which was cut off from the US financial system. Part of the cost the Cambodian economy is bearing today — forced liquidations, frozen property transactions, increased caution among regional investors — thus stems as much from this international pressure as from Phnom Penh's own choices.

Winning back the country's tourism reputation

Tourism, a key pillar of the Cambodian economy, has paid a direct price for this tarnished reputation: international arrivals fell by nearly 6% over the first eight months of 2025, a decline that several analyses attribute as much to border tensions with Thailand as to the image of insecurity attached, rightly or wrongly, to certain coastal areas. Aware of the stakes, the authorities have stepped up communication and economic diplomacy in recent months to restore the country's international image — taking part in investment forums, promoting the destination abroad, and highlighting Cambodia's cultural and natural heritage to European and regional markets. The government is playing the long game: by demonstrating its determination to clean up the sector for good, Phnom Penh hopes to convince visitors and investors that tomorrow's Cambodia bears little resemblance to the clichés carried by parts of the international press.

A transition still to be measured over time

Some human rights organisations, Amnesty International among them in a report published in early July 2026, believe the crackdown's implementation remains incomplete and that pockets of activity persist in certain provinces. The Cambodian authorities, for their part, point to the unprecedented scale of operations carried out in just a few months, in a regional context where coordination between countries remains difficult to achieve. The gap between these two readings illustrates how hard it still is to assess the real effectiveness of a clean-up effort that is, relatively speaking, still recent.

In the meantime, the country is going through a costly adjustment: slower growth, a sluggish property sector, rising non-performing loans on bank balance sheets — above 8% at the end of 2025, according to the IMF, which is calling for closer scrutiny of the banking sector's exposure to real estate. Often, the same players — local shopkeepers, construction workers, small real-estate agencies — who had indirectly benefited from the money of past years are now absorbing most of the slowdown. It is a paradox that takes nothing away from the necessity, widely shared on the international stage, of ending a system built on trafficking and exploitation — but one that is a reminder that stepping out of this shadow economy comes at a price, one Cambodia is now paying.