Cambodia has improved its standing by eight places in the World Economic Forum’s annual ranking of business competitiveness in 125 countries.
Jumping from 111th place last year to 103rd this year, the new ranking still leaves Cambodia sandwiched between Gambia and Tanzania in the bottom 20 percent of the countries listed in the report, which was released Wednesday.
By way of comparison, neighboring Thailand is ranked 35th and Vietnam is 77th.
The highly respected list is topped this year by Switzerland, which the list credits as displaying “a world class capacity for innovation and…a highly sophisticated business culture.”
The forum’s rankings are determined by a combination of publicly available hard data and an “executive opinion survey” distributed to businesses in nations covered by the list.
Just as in 2005, the Economic Institute of Cambodia distributed the surveys on behalf of the WEF.
Chan Vuthy, a researcher at EIC, said that the surveys were sent out in February and March and about 100 were returned to the EIC. The EIC declined further comment regarding the rankings or the survey results, claiming that they would release more information at a workshop next month.
Tim Smyth, managing director of Indochina Research, said there were three likely reasons why Cambodia was able to boost its ranking: the generally positive press regarding the investment climate; increase in business registrations; and the increased stability of the financial sector, particularly the introduction of a multinational bank like ANZ.
“There haven’t been huge changes in the investment environment,” Smyth said. “But lots of small changes have made it more appealing.”
Hang Chuon Naron, economist and secretary-general for the Finance Ministry, said that he could not comment fully on the WEF ranking because he was unsure of the methodology employed in the research.
He did say, however, that Cambodia’s improved ranking was probably due to confidence spurred by infrastructure improvements, and a stable currency and financial sector.
“[S]tability in the banking sector, the exchange rate and inflation is very important—all the macroeconomic factors are there,” he said.