Cambodia slipped seven places from 88 to 95 in the World Economic Forum’s Global Competitiveness Index, released on Wednesday, remaining the second-worst performing country in Southeast Asia ahead of Myanmar and highlighting the gulf between the region’s rich and poor economies as integration approaches next year.
Cambodia failed to make progress in 9 of the 12 categories, or “pillars,” used to compare the 144 countries, scoring worst in higher education and training, and institutions, coming in at 123rd and 119th place respectively.
The biggest drop since the 2013-14 report was in the category goods market efficiency—which includes the ease of starting a business—falling 35 places to 90. The country’s moderate improvements were made in its macroeconomic environment, health and primary education, and market size.
Cambodia’s best score was in labor market efficiency despite falling two places to 29th.
The greatest hurdles to conducting business in the country, according to companies surveyed in the report, was corruption with 19.4 percent, followed by access to financing at 12.2 percent.
Cambodia’s low cumulative score continues to stand in contrast to Southeast Asia’s developed economies, with Singapore ranking second on the index and Malaysia 20th.
The disparity will prove to be a challenge when trying to create a more united economic bloc when the Asean Economic Community launches in 2015, the WEF’s previous annual report says.
“No other regional integration initiative has deeper disparities among participating members,” it says. However, with the progress made by Asean member states in implementing 80 percent of the measures laid out in the bloc’s blueprint, “the assessment is very mixed.”
“Although Asean economies have enjoyed brisk economic growth over the past decade, the foundations remain relatively shaky for a number of countries,” the report says.
Jayant Menon, lead economist in the office for the regional economic integration at the Asia Development Bank, said narrowing the development divide between countries is imperative along with more public-private partnerships.
“Although the AEC is a government-led agenda, the AEC cannot succeed without fully engaging the business community, and the public at large,” he said.
“Innovative financing and public-private partnerships will be necessary to achieve broader reforms like investing in both hard and social infrastructure, like education and health, to increase capital inflows and boost efficiency and productivity.”
Correction: A previous version of this article mistakenly cited figures from the World Economic Forum’s 2013-2014 report as being released on Thursday and the most recent data from the organization on Cambodia’s global competitiveness. This article has been changed to reflect the findings in the World Economic Forum’s 2014-2015 report, which was released this week.