2013 Index of Economic Freedom

Cambodia

overall score58.5
world rank95
Rule of Law

Property Rights30.0

Freedom From Corruption21.0

Limited Government

Government Spending88.4

Fiscal Freedom90.9

Regulatory Efficiency

Business Freedom39.4

Labor Freedom54.2

Monetary Freedom81.3

Open Markets

Trade Freedom70.2

Investment Freedom60.0

Financial Freedom50.0

Embed This Data

Create a Comparison Chart

See how Cambodia compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 15.1 million
  • GDP (PPP):
    • $33.5 billion
    • 6.1% growth
    • 5.8% 5-year compound annual growth
    • $2,216 per capita
  • Unemployment:
    • 3.5%
  • Inflation (CPI):
    • 5.5%
  • FDI Inflow:
    • $891.7 million
Embed This Data

Cambodia’s economic freedom score is 58.5, making its economy the 95th freest in the 2013 Index. Its overall score is 0.9 point better than last year due to improvements in trade freedom and labor freedom. Cambodia is ranked 16th out of 41 countries in the Asia–Pacific region, and its overall score is slightly higher than the regional average.

Reductions in Cambodia’s trade-weighted average tariff rate and modernization of its commercial codes have contributed to improvements in the overall entrepreneurial environment and advances in economic freedom. Openness to global trade and a competitive corporate tax rate have aided the ongoing transition to a more market-based system, improving productivity and adding jobs. The maintenance of relatively sound public finance management has contributed to economic stability.

Nonetheless, substantial challenges remain, particularly in implementing deeper institutional and systemic reforms that are critical to strengthening the foundations of economic freedom. Property rights and freedom from corruption remain weak, and lingering government interference and controls hurt dynamic flows of investment and overall economic efficiency.

Close

Background

Between 1975 and 1979, the brutal Khmer Rouge regime of Pol Pot killed an estimated 3 million Cambodians. Now nominally a democracy, Cambodia has been ruled since 1993 by Prime Minister Hun Sen, and elections have often fallen short of international standards of fairness. In mid-2008, the former Khmer Rouge leader’s Cambodian People’s Party claimed a large majority in the National Assembly, and Hun Sen remained prime minister. A tribunal established under an agreement with the United Nations to prosecute senior officials involved in the atrocities gained its first conviction in July 2010. In 2012, Cambodia assumed the rotating chairmanship of the Association of Southeast Asian Nations, drawing increased international attention to and criticism of its undemocratic policies. Cambodia’s economy depends heavily on tourism and apparel assembly.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 21.0 Create a Graph using this measurement

The legal system does not protect private property effectively. The executive branch usually dominates the judiciary. Inconsistent judicial rulings and corruption are common. The land titling system is not fully functional, and most property owners cannot prove their ownership. A new foreign ownership law passed in 2010 expanded the rights of foreigners to own property. Infringement of intellectual property rights is pervasive.

Limited GovernmentView Methodology

The top income and corporate tax rates are 20 percent. Other taxes include an excise tax and a value-added tax (VAT). The overall tax burden amounts to 10.7 percent of total domestic income. Government spending amounts to 19.7 percent of total domestic output, but the budget balance remains under control. Public debt continues to remain below 30 percent of GDP.

Regulatory EfficiencyView Methodology

Measures to modernize commercial codes, including updated bankruptcy legislation, have been adopted in recent years. Completing licensing requirements still takes more than 600 days. The non-salary cost of employing a worker is low, but enforcement of many aspects of the labor codes is not effective. The market determines most prices, but the government attempts to maintain stable retail prices for fuel through subsidies.

Open MarketsView Methodology

The trade-weighted average tariff is 5.5 percent, and the country is improving its trade policies. Foreign capital and domestic capital are generally treated equally under the law, and up to 100 percent foreign ownership is allowed in most sectors. In a few sectors, foreign investment is subject to local equity participation or prior authorization. The financial sector remains subject to state influence, despite banking privatizations.

Country's Score Over Time

Bar Graph of Cambodia Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Cambodia to other economic country groups

Regional Ranking

rank country overall change
1Hong Kong89.3-0.6
2Singapore880.5
3Australia82.6-0.5
4New Zealand81.4-0.7
5Taiwan72.70.8
6Japan71.80.2
7Macau71.7-0.1
8South Korea70.30.4
9Malaysia 66.1-0.3
10Thailand 64.1-0.8
11Kazakhstan63-0.6
12Mongolia61.70.2
13Sri Lanka60.72.4
14Azerbaijan59.70.8
15Kyrgyz Republic 59.6-0.6
16Cambodia58.50.9
17The Philippines58.21.1
18Fiji57.2-0.1
19Samoa57.1-3.4
20Indonesia56.90.5
21Vanuatu56.60.0
22Tonga56-1.0
23India55.20.6
24Pakistan 55.10.4
25Bhutan55-1.6
26Papua New Guinea53.6-0.2
27Tajikistan53.40.0
28Bangladesh 52.6-0.6
29China51.90.7
30Vietnam51-0.3
31Nepal50.40.2
32Micronesia50.1-0.6
33Laos50.10.1
34Maldives49-0.2
35Uzbekistan460.2
36Kiribati45.9-1.0
37Solomon Islands45-1.2
38Timor-Leste43.70.4
39Turkmenistan42.6-1.2
40Burma39.20.5
41North Korea1.50.5
See Entire Region List ›

View all countries ›

Back to Top