Cambodia’s economic freedom score dropped seven ranks in the annual Economic Freedom Index released by the Heritage Foundation, a US-based, conservative-leaning think tank.
The 0.8 point dip in the score from last year put Cambodia’s economy in the “Mostly Unfree” category, ranking 101 out of a total of 180 countries – down from the 94 spot in 2017.
The Kingdom’s 58.7 score put it squarely in the middle of the Asia-Pacific region, ranking behind Malaysia (22) and neighbouring Thailand (53), but ahead of Vietnam (141) and Laos (138).
Cambodia’s score was hurt by a drop in the already-low “property rights” category, as well as decreases in its “fiscal health” and “labour freedom” scores. In general, the country performed well on overall indications of economic health, but poorly on regulatory efficiency and rule of law categories.
The government did see a rise in its “judicial effectiveness” and “government integrity” scores over last year, but they still remained well below the global and regional averages.
“Pervasive corruption remains a serious obstacle to economic development and social stability” in Cambodia, the report notes in its country summary.
Mey Kalyan, a senior adviser to the government’s Supreme National Economic Council, said yesterday that the ranking was not bad for Cambodia, and that it was a reasonable reflection of the strengths and weaknesses of Cambodia’s economy.
“The issue on institutionalisation needs some time for development, as it needs both human resources and some policies,” he said, urging patience for further reforms to take place.
Using the example of education reform, Kaylan noted that while “building a school is easy to do . . . strengthening the institutional quality of schools needs a long time. So I think that whatever point that they said we are not good yet, we can reconsider and improve it.”
Preap Kol, executive director of anti-corruption NGO Transparency International Cambodia, said yesterday that the study’s findings showed that creating a truly independent judiciary was sorely needed in the country.
“Corruption is still a constraint for the judicial system, affecting the fair business playing field,” he said. “Though our country is an open economy, individual businesses are always backed up by a powerful person as a shareholder.”
To get a better ranking, Kol suggested the government establish a truly independent judiciary for businesses in the country.
“We need to improve the judicial system, and ensure fair business competition by creating a commercial court that is independent and transparent,” he said.