Logo of Phnom Penh Post newspaper Phnom Penh Post - A failing grade for competitiveness

A failing grade for competitiveness

A teacher explains English exercises to students during her class at Phnom Penh’s Wat Koh High School in 2014.
A teacher explains English exercises to students during her class at Phnom Penh’s Wat Koh High School in 2014. Heng Chivoan

A failing grade for competitiveness

Despite the persistently high rates of corruption that are seen widely as a major impediment to doing business, and poor access to quality higher education, Cambodia has moved up a notch in the latest World Economic Forum’s Global Competitiveness Report, released yesterday.

Cambodia now takes the 89th spot in global competitiveness, up one position from last year, according to the annual report, which maps out the major factors in driving productivity across 138 nations. The marginal improvement still leaves the Kingdom as the second-worst country in ASEAN in terms of competitiveness, narrowly beating out Laos, ranked 93rd. Myanmar was excluded from this year’s report after ranking 131st last year.

Bigger and more developed ASEAN economies such as Singapore, Malaysia, Thailand and Indonesia consistently rank within the top 50.

While the WEF report highlighted that the country has, since 2007, performed the best amongst Asian nations in overall ranking improvement based on 12 governmental and economic pillars weighted on a scale of 1 to 7. Cambodia now has a base score of 3.98. Neighbouring countries such as Thailand and Vietnam scored better at 4.64 and 4.31, respectively. Meanwhile, Laos came in at 3.93.

“Despite the positive trend, the challenges are many and significant,” the report read.

Cambodia’s comparative ranking on nearly half of the 12 pillars that form the overall ranking put it over 100. In its poorest-ranked pillar, higher education, the Kingdom ranked 124 out of 138 countries, indicating a continual trend of decline and lack of reform.

“It is estimated that secondary education enrolment is around 50 percent,” the report said. “Ensuring access to quality of education for all should therefore be a policy priority.”

The report noted that of three of the four core areas defined for competitiveness, Cambodia made only marginal gains in public institutions and infrastructure development, down five notches compared to last year. Labour market efficiency was widely in line with the East Asia and Pacific average.

Content image - Phnom Penh Post

However, Cambodia’s overall ranking has been regularly dragged down over the years by its lack of business sophistication, a lack of capacity to innovate and technology readiness – all of which are based on metrics that assess the quality of individual firms, government institutions and supply-side constraints.

Eric Tavernier, CEO of We Group Ltd, a French firm that operates a garment factory in Sihanoukville, said that Cambodia could increase its competitiveness if it developed local capacities for large-scale production and increased logistics capacity.

“What can Cambodia do?” he asked. “Decrease the cost of logistics, which is very expensive, and build local suppliers for materials and increase the level of skilled management.”

“Cambodia is a competitive country,” he said, however adding that companies need to continually innovate to remain profitable.

The WEF report highlighted that in terms of the difficulty of doing business, corruption took the top spot followed by an inadequately educated workforce underpinned by a lack of access to quality higher education.

Phok Rathak, senior research assistant from the Nuppun Institute for Economic Research – a local research firm that participated in this year’s evaluation – said that the Cambodian government was failing to shore up its higher-education system while students were earning degrees that were not directly applicable to the future job market.

“The government needs to regulate higher-education institutes and make sure they are all updating their curriculums to the highest standards,” he said, adding that there is a current mismatch between individual institutions.

“The government has stopped corruption and cheating in the Grade-12 exam, but they have yet to create a set of standards that unify higher education or properly prepare students,” he said. “Compared to Thailand, we are way behind.”

As for the infrastructure score, he said that he would expect to see only marginal progress due to a lack of urban planning and short-term infrastructure projects that are grossly inadequate.

“Cambodia needs to think about quality infrastructure with a phased urbanisation plan,” he said, adding that Cambodia’s infrastructure development has been far too dependent on foreign sources of funding that build subpar projects.

“In the long term, Cambodia needs to invest its own funds into infrastructure to make sure they are sustainable.”

MOST VIEWED

  • All Covid restrictions for inbound travellers lifted

    Cambodia has apparently taken the final step towards full reopening of the country without Covid-19 restrictions by removing all requirements for inbound travellers, who until now had to show health certificates indicating that they have tested Covid-19 negative in the past 72 hours as well as

  • Typhoon Noru brings flash floods – 16 dead

    An official warned that that the 16th typhoon of the season, Noru, had brought heavy rains to areas the Mekong River and flooded thousands of homes in the provinces bordering Thailand. As of September 27, the death toll from the flooding had risen to 16. National Committee

  • Cambodia stands firm on 5PC: No invite for Myanmar to ASEAN Summit this year

    Cambodia has not invited Senior General Min Aung Hlaing, chairman of Myanmar’s ruling State Administration Council (SAC), to the 40th and 41st ASEAN Summit and related meetings scheduled for next month in Phnom Penh. The government will instead invite a non-political representative from Myanmar

  • Mushrooming borey projects and home financing – a cause for concern?

    A spurt in housing developments is typically a sign of a growing economy but underneath all that might lay some anxiety of credit growth as developers offer financing to buyers at higher rates, an activity the central bank identifies as ‘shadow banking’ Earlier this year,

  • Thai Senate delegates in Cambodia to discuss anti-graft co-op

    A delegation from Thailand's Senate was in Phnom Penh on September 28 to meet their Cambodian counterparts to discuss strategies for fighting corruption and enhancing cooperation. The Thai delegates were from its Senate’s Committee on Studying and Inspecting Corruption, Misconduct and Strengthening Good Governance. They

  • Scholarship winner tells secrets to success

    Chhim Chaknineath was awarded the Chevening Scholarship for one year of postgraduate study in the UK for the academic year 2022-2023 along with a group of 10 other outstanding students who applied. She spent more than a year researching and studying – as well as consulting with