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Troubling contrasts in ASEAN

Some of these ASEAN economies are not like the others.

Singapore is 80 times richer than Myanmar and its population lives 20 years longer than Cambodia’s, while Myanmar ranks 50 places behind Cambodia in terms of global competitiveness, according to a wide-ranging analysis from the World Economic Forum.

Released yesterday, the Geneva-based forum’s annual Global Competitiveness Report uses a variety of factors to rank countries based on their level of productivity. But it also looks at economic trends by region. Using that measure, the 10-member Association of Southeast Asian Nations, commonly known as ASEAN, stands awkwardly alone.

“To any observer of the region, the developmental gap within the ASEAN is striking,” the authors of the report wrote. “No other regional integration initiative has deeper disparities among participating members.”

Less than two years away from the 2015 deadline for the Asean Economic Community (AEC), a single market for economic development, the differences loom large.

Grant Knuckey, CEO of ANZ Royal Bank, said that though the planned economic community isn’t as far-reaching as the European Union (ASEAN won’t have a common currency, for instance), “that doesn’t mean there is no issue with disparities between developmental stages of AEC nations”.

“One potential issue is that developing domestic industries and companies get ‘crowded out’ by companies from the developed AEC nations. This can prevent development of ‘local champions’ and potentially even local clusters,” he added.

Hiroshi Suzuki, president of the Business Research Institute of Cambodia, said the differences have a combination of merits and demerits.

“Yes, Cambodia has not yet developed as Singapore. However, by this starting level of development, in Cambodia, many FDI [foreign direct investors] could enjoy the lower cost of labour. If you have a labour-intensive factory in Singapore, how could you be competitive to the factories in Cambodia?”

In the report, Cambodia received a competitive ranking of 88 out of 148 economies, a slight dip from its 85th slot last year. Corruption was listed as the most problematic factor for doing business, with “inefficient government bureaucracy” in second place.

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UK-Tutor-In-Phnom-Penh's picture

This will be an even bigger problem for Cambodia with regards to the education system because their is no benchmark testing average for the country so when the ASEAN alliance becomes reality there will be a huge difference in the level of education.I feel his will then lead to an enormous competitiveness for jobs where you will see mass migration into Cambodia where most of the better jobs will be snapped up by Cambodia's neighbours.

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