Saturday, October 11, 2008

Cambodia advances 15 places in Doing Business 2009 rankings

By Puy Kea
PHNOM PENH , Sept. 10 KYODO -- Cambodia moved up 15 places to 135th in the ranking of the ease of doing business around the world, according to a report released Wednesday by International Finance Corporation and the World Bank. Cambodia 's significantly higher standing is the result of reforms that make it easier for businesses to get credit and to close a business. ''These are very encouraging results,'' said Stephane Guimbert, senior country economist for the World Bank in Cambodia .
''These positive results show important reforms are being introduced leading to substantial improvement in Cambodia 's ranking this year,'' he said. ''These results are consistent with the survey of 500 firms that we are just completing to assess the investment climate in Cambodia .'' The IFC-World Bank report, Doing Business 2009, which compares 181 economies, uses 10 indicators of business regulation such as starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business.
The rankings are derived from reviews of laws and regulations, and in-depth interviews with business service providers such as accountants and lawyers. Doing Business surveys, however, do not assess such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates. Cambodia 's showing this year is a result of two reforms. The first is passage of the Law on Secured Transactions in 2007 that makes it possible for a business to use its moveable and intangible assets as security for a loan, and the second reform was the passage of the Law on Bankruptcy.
''Enabling banks to accept moveable assets as collateral is a major improvement in access to finance in Cambodia ,'' said Trang Nguyen, IFC's head of Advisory Services for the Mekong Region. She added a successful small and medium enterprise that has valuable moveable assets but lacks land and buildings to use as collateral can now get financing needed to improve its business.
''This, in turn, should enable SMEs, which represent over 99 percent of Cambodia 's firms and 45 percent of employment, to expand, create more jobs, and contribute to economic growth and poverty reduction,'' she said. Creating jobs is especially important given the nearly 250,000 young people who are reaching working age and joining the labor market every year, she added. The statement said Cambodia has also improved indicators on trading across borders by reducing the time required to export from 37 to 22 days and import times from 46 to 30 days.
KyodoSeptember 10, 2008