Corruption and an inefficient bureaucracy continue to make Cambodia’s economy less competitive than others in Southeast Asia and around the globe, according to an annual report released Wednesday by the Geneva-based World Economic Forum.
Cambodia ranked 110 out of 133 countries in the report, slipping one spot since last year and returning to the same rank it received in 2007. With Laos and Burma excluded, Cambodia fared poorest in the region, far behind Vietnam, 75th, and Thailand, 36th. Switzerland took the top spot and Burundi came in last.
The ranking was based on economic data and a survey of 93 business executives.
Nearly 24 percent of respondents said corruption was the most problematic factor in doing business in Cambodia, while about 17 percent cited inefficient government bureaucracy. Cambodia was, however, ranked 59th in public trust of politicians, one of 110 separate categories in the report.
Out of those 110 measures, Cambodia was judged competitive in only nine, a group that included tax rates as well as pay and productivity.
Matthew Rendall, a partner at legal consultancy Sciaroni & Associates, said Cambodia’s poor ranking in the report “goes against the flow of investor interest,” which he said has been on the rise since December.
While Mr Rendall said investors have cited corruption as a concern, he said he was surprised that “inefficient government bureaucracy” was seen as a problem.
“The corruption thing, absolutely it’s a problem. It’s something the government needs to make headway on,” he said, while noting as positive the recent creation of new government anticorruption body.
“The efficiency thing I actually find quite surprising,” he said, adding that in Cambodia it took only two weeks to form a company, quicker than in much of Asia.
Mr Rendall pointed to other competitive advantages in Cambodia, such as having “no requirement for local participation in companies at all except for those that own land.” He also cited as favorable limited restrictions on the remittances of money and on the ease of residency.
Mao Thora, secretary of state at the Ministry of Commerce, declined to comment when reached by phone yesterday. Other ministry officials were unavailable.
(Additional reporting by Khuon Narim)