The annual World Economic Forum’s (WEF) Global Competitiveness Report has seen Cambodia drop a spot in the rankings, and Geeks in Cambodia thought it would be interesting to take a quick look into the report’s findings, why Cambodia scored as it did, and the impact and potential this has for the kingdom’s tech and entrepreneur sectors.
Switzerland based WEF is an influential player in global business, assisting world leaders and economists to come together to discuss how to best assist international trade and development. The annual Global Competitiveness Report “assesses competitiveness through the factors that determine an economy’s level of productivity—widely considered as the most important determinant of long-term growth and income,” according to the report’s authors.
“At the heart of the competitiveness agenda is the recognition that economic growth is a core driver of human development. There is overwhelming evidence that growth has been the most effective way to lift people out of poverty and improve their quality of life,” the report notes.
In this year’s report, Cambodia ranked 110/140, a one place drop from last years 109/135, placing above neighbouring Laos but behind Thailand and Vietnam as the East Asia and Pacific (EAP) region showed positive signs of economic growth and development.
“In 2017, the EAP was the fastest-growing region in the world and accounted for about one-third of global growth, due primarily to China’s significant contribution. The region’s developing economies grew at 6.6%, owing to a favourable global economic context that encouraged a rise in exports, strong consumption and high investment. Nine of the region’s 10 developing economies covered … achieved at least 3% growth in 2017, and in five—Cambodia, China, Lao PDR, the Philippines, and Viet Nam—growth exceeded 6%.”
For Cambodia, there were some interesting signs of improvement in key areas, but also some failings in others that negatively affected the overall ranking.
While Cambodia ranked 65th overall for its Labour Market, and 74th for Macroeconomic Stability, both of these scores fell from last year. More promising, the WEF’s perceived failings of Cambodia’s ICT and Infrastructure, both scoring poorly in 2017, were greatly improved from the previous report.
According to the report, Cambodia’s score highlights that for it, and countries with similar rankings, are “vulnerable to a sudden shock, such as a faster-than-expected rise in interest rates in advanced economies and escalating trade tensions.”
The report was clear about what it’s authors felt is the “elusive” goal of utilising technology to leapfrog global ICT gaps — to quickly develop, without need for earlier infrastructure.
“There are, at most, 4.5 billion smartphones in use in the world and more than half of humanity has never gone online. While the promise of ICT for productivity is high—and although ICT can clearly be catalysts for other drivers of productivity, such as innovation and business dynamism—it would be misguided to rely on technology alone to solve all problems, in education, health, governance or transport infrastructure, for example.”
Cambodia has seen some significant advantages from leapfrogging in the past — the country’s affordable access to mobile data and smartphones has meant that a significant number of people are able to talk and get online without the need for expensive legacy infrastructure of many other countries.
The main points from this year’s report, at least to us at Geeks, is that while Cambodia is making some big improvements in certain areas of its competitiveness, sliding scores in other areas coupled with larger improvements by other countries led to the low score.
Yet we have seen some exciting areas of development in Cambodia in 2017 and 2018 that we are confident is pointing to Cambodia’s increased global competitiveness — if they can be sustained.
The launch of Koompi computers, rising wages, the ever growing tech and startup scene, Pi Pay’s pushing of cashless payments, more and more banks and MFI’s offering mobile apps, Grab and other transport apps, better roads, better schools, more women in tech, and increasing numbers of local startups and global brands seeing potential in Cambodia.
So let’s see this year’s WEF ranking as a sign that some things are improving, and hopefully next year will reflect the rapid changes taking place in the Kingdom!