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Logo of Phnom Penh Post newspaper Phnom Penh Post - Trade competitiveness falls

Trade competitiveness falls

Survey sees improvement, but Kingdom’s regional ranking drops

Trading up

How does Asia rate?
Cambodia dropped 11 places to rank the lowest of Asian countries surveyed on the ease of conducting trade and business, due mainly to graft issues.
Rank Country Change
1. Singapore (same)
30. Malaysia (-2)
60. Thailand (-10)
68. Indonesia (-6)
71. Vietnam (+18)
92. Philippines (-10)
102. Cambodia (-11)
Source: WEF

CAMBODIA’S trade access and general business environment are improving, but its desirability as a trading partner has dropped, particularly compared to its regional neighbours, according to a report released by the World Economic Forum (WEF) Thursday.

Cambodia fell 11 places in a WEF survey on trade facilitation – dropping from number 91 to 102 out of 125 countries and ranking the lowest among Asian countries – despite increasing its score across the survey’s key areas.

The report, titled “Enabling Trade in the Greater ASEAN Region”, examined market access, border administration, transport, communications infrastructure and the overall business environment.

“If you look at Cambodia’s scorecard, it has actually improved overall, moving from 3.5 to 3.6 on a scale of one [worst] to seven [best],” the report’s co-author, Theirry Geiger, told the Post. “But even if you improve in the score you can still fall in ranking because other countries improve more than you.

“This is where the corruption is a huge drag on Cambodia’s performance. Irregular payments, lack of transparency, unpredictability – how many days depending on how much you pay – we give these considerations quite a lot of weight,” Geiger added.

However, he pointed out that the overall score for corruption had slightly improved. Another concern is transport infrastructure, for which Cambodia ranked 116th, Geiger said.

“When it comes to being able to transport across the country, it’s important, and in this regard Cambodia ranks pretty low,” he said. “So it dropped 10 places, but again, it has improved slightly on the scorecard.”

The report said Cambodia’s “most notable strength regionally was in the market-access component”, ranking 40th worldwide. However, in terms of corruption it still ranks “among the highest”, at 120.

Among ASEAN members, Singapore was the standout performer in the region, maintaining the world number-one rank it took last year.

Vietnam showed the most improvement, jumping from 89 last year to 71, mainly on the strength of its “improved market access”, Geiger said. Yet Vietnam was ranked 50 for market access, behind Cambodia.

The report said Cambodia’s market access score was high because “the tariff structure is relatively simple (30th) with no tariff peaks and only four distinct tariffs across all lines.

“Cambodia enjoys favourable conditions for accessing foreign markets (sixth) with tariffs averaging 4.7 percent (fourth).” The barriers to trading include inefficient border administration (96th) where “procedures to import and export are burdensome, numerous and lengthy”.

“In addition Cambodia’s limited logistics capabilities and restricted connectivity result in delays, numerous hassles and high shipping costs.”

Ministry of Commerce Secretary of State Ok Boung said the government is working at facilitating trade, but admitted there is more that can be done. ADDITIONAL REPORTING BY MAY KUNMAKARA

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