Cambodia’s ranking in World Bank’s Doing Business report further slips

Starting a business in Cambodia remains a tough challenge as the country has slipped further down the World Bank’s Doing Business report for the second year in a row, ranking 135 out of a total of 190 countries, according to The Phnom Penh Post Online on Thursday.

Cambodia dropped four places in the index – or eight places in the past two years – due to lack of much-needed reforms despite boasts by Cambodian officials of relatively liberal foreign investment regime.

The report shows that the Cambodian government has not made a single positive or measurable reform over the past year. It shows that starting a business remains a challenge with the kingdom ranking 183 – the worst in the region –in the category due to burdensome startup procedure.

The average time to complete all the steps necessary to legally start a business is 99 days. Another tough spot for Cambodia this year’s index is in the category concerning construction permits, where it ranked 179, up for points from last year. The report shows that to build a mid-sized warehouse in Cambodia from start to finish requires 652 days on average and involves 20 regulatory procedures.

Miguel Chanco, lead Asean analyst for the Economic Intelligence Unit, said Cambodia’s low rank in the survey speaks for itself in terms of the government’s willingness to improve its status.

He said in an email that while the Cambodian government boasted a relatively liberal foreign investment regime “it seems like the government hasn’t made any strides in reducing the red tape when businesses actually decided to set up shop.”

He added that Cambodia’s low ability to enforce contracts was a reflection of its weak judiciary system and that the government was choosing populist policies over sound economic principle.