Forum Finds Cambodia Lacks Competitiveness

With pervasive corruption, poor infrastructure and lax application of its laws, Cambodia’s markets are outperformed by most others, including its neighbors, the World Economic Forum announced Wednesday.

At 110 of 131 countries ranked in the 2007 Global Competitiveness Index, Cambodia lags far behind Singapore, 7th; Thailand, 28th; Indonesia, 54th; and Vietnam, 68th.

The fourth annual ranking is bas­ed on a synthesis of survey re­sponses and economic data on in­fra­structure, health, education, job training, macroeconomic stability and innovation. The US took the top spot while Chad was ranked lowest.

Cambodia’s score, 3.48 out of a possible 7, was a marginal im­provement over last year’s, when nine fewer countries were ranked.

Hang Sambopisith, a researcher at the Economic Institute of Cam­bodia, which contributed data to the WEF report, told reporters Wed­nesday that a survey in March and April of 105 business executives working in Cambodia had been unambiguous.

“Corruption is still on top of the list. Infrastructure is weak and law enforcement needs work,” he said.

Of the business executives surveyed, 79 percent named graft the main obstacle to doing business, he added. Other complaints included an inefficient bureaucracy, poorly trained workers and “policy instability,” according to the report.

Cambodia scored well under a handful of indicators, earning a first-place rank for non-wage labor costs—or employee compensation other than salaries—and fifth for both the total tax rate and female participation in the labor force.

The UN Conference on Trade and Development announced earlier this month that foreign direct investment in Cambodia grew 27 percent in 2006 to $483 million.

However, Mao Thora, undersecretary of state at the Com­merce Ministry, said Cam­bodia’s WEF rating may dissuade investors.

“This rating could affect in­vestors’ decisions,” he said. “In fact, the business environment is good but there remain a number of challenges,” he said. “Cor­ruption is what people generally talk about.”

CPP lawmaker Cheam Yeap, chairman of the Assembly’s commission on banking and finance, said the country’s circumstances should be considered when being assessed.

“Cambodia’s economic growth and competitiveness are limited if compared with other countries because we just emerged from a war,” he said.

“We’re also calling for the anticorruption law and penal code to be passed to strengthen the rule of law. When we get oil, we can boost economic competitiveness.”