Cambodia has seen a five-year decline in economic freedom, further depressed by the falling score in terms of freedom to work and trade registering an overall loss of economic freedom of 2.4 points since 2017 and remains mired in the category “Mostly non-free”.
Despite this, Royal Academy of Cambodia researcher Hong Vannak insisted the ranking was ‘not bad for Cambodia’ and reasonably reflected the strengths and weaknesses of the Cambodian economy. .
“Cambodia’s economic freedom score is now 57.1, making its economy the 106th freest in the 2022 Economic Freedom Index. Ranked 21st out of 39 countries in the Asia-Pacific region, the overall score of Cambodia is below the regional and global average,” he said. Khmer timereferring to the Index of Economic Freedom published by the Heritage Foundation.
The US-based conservative think tank also revealed that Cambodia has averaged economic growth of 5% per year over the past five years despite an economic downturn in 2020.
Under the Paris Agreement in 1991, Cambodia became an open market for economic reform. The Kingdom has developed infrastructure to lower electricity tariffs and improve the condition of national roads to attract foreign investors.
“The issue of institutionalization needs time to be resolved, as it requires both human resources and certain policies,” he said, adding that Cambodia has revived new investment laws.
With the TSA agreement and the US market’s GSP, Cambodia’s economic growth has achieved higher growth in terms of the garment and agriculture sector, he said.
Vannak justified that the impact of Covid-19 as of December 1 last year resulted in some 2,944 deaths, attributed to the pandemic in Cambodia, and the government’s response to the crisis ranks 51st among countries included in this index in terms of rigor.
The economy contracted by 3.5% in 2020. The Kingdom’s score of 57.1 puts it squarely in the middle of the Asia-Pacific region, ranking behind Vietnam and Thailand, but ahead of Laos and China. Burma. “Cambodia’s score was affected by a drop in the already weak ‘property rights’ category and a drop in its ‘fiscal health’ and ‘labor freedom’ scores.
“In general, the country performed well on the overall indications of economic health, but poorly on the categories of regulatory efficiency and rule of law,” he said.
Reports also showed that the government has introduced new economic regulations and policies without consulting the business community, with Chinese state-owned enterprises receiving preferential treatment.
- Key words: economic freedom, commercial freedom