THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Cambodia

Ranked 91st of 149

At a glance

Ranks

91 st on the Legatum
Prosperity Index™

54th
79th
124th
88th
102nd
102nd
72nd
95th
100th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Cambodia performs best on Economic Quality and Personal Freedom and scores lowest on the Governance sub-index.

Visit our Rankings table to see how Cambodia compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Cambodia is amongst the world top 30 over-deliverers of prosperity and is well ahead of its regional peers. This is a notable achievement considering that it has the lowest GDP per capita in South East Asia and a relatively new democracy.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

Cambodia is currently enjoying strong economic growth, with growth over the last five years averaging 5.3%. Not only has this growth been strong, it has also been inclusive. During the last decade, not only has Cambodia succeeded in reducing its absolute poverty rate by 79% so that it now stands below the world and regional averages but has also experienced a 90% increase in its living standard satisfaction, which is now amongst the highest regionally after Singapore and Thailand. Unsurprisingly, it has rocketed up the Economic Quality sub-index, rising 55 places since 2007.

What makes Cambodia stand out compared to its regional peers is its extremely low unemployment rate and high labour force participation, both male and female. Yet, together with construction and services, the garment sector is the main driver of the economy. This is based on low skilled and low wage labour as is exemplified by the fact that Cambodia has the lowest adult literacy rate and secondary education rate per worker in south east Asia. Further progress on Economic Quality can only come from economic diversification and human capital investment to drive higher quality jobs and with it, household wealth to catch up with regional counterparts.

In contrast with its economic success, Cambodia has the lowest Governance score in South East Asia with a rank of 124, a rank which has worsened since 2007. Factors impacting the country’s Governance score so adversely are declining legal system efficiency, falling turnout, and a less transparent policymaking process. Furthermore, despite the anti-corruption law passed in 2010, perceptions of corruption have worsened by nearly a fifth since. That many irregularities were recorded in the July 2013 National Assembly elections will not have helped. Cambodia’s judicial independence is perceived to be the most affected by corruption, accounting for its equally declining score in this variable.

Governance score in Cambodia, South East Asia and the world according the 2016 Prosperity Index.
Despite the South East Asian average Governance score being close to the world average between 2007 and 2016, Cambodia has been lagging far behind with no signs of improvement in the last five years.

However, the trend in the Governance sub-index is not universally downward. While Cambodia still has the lowest scores in these variables regionally, slow but substantial progress is being made in strengthening rule of law and government effectiveness. The latter is particularly significant as weak public service delivery impedes inclusive development. Finally, it must be acknowledged the Cambodia’s modern regime is still very recent, with elections being first held in 1993. Cambodia has come a long way since then and the fact that the country’s democracy level, ranging from -10 (fully autocratic) to 10 (full democratic) has even been awarded a score of 2, when the regional average is 0.6, is a considerable achievement in itself.

Further accomplishments have been made in social development indicators which are a key priority for Cambodia. This can be observed in various sub-indices such as: Education, Health, Personal Freedom, and especially Social Capital, where Cambodia has risen 30 ranks in the last decade.

In terms of Health performance, Cambodia has succeeded in improving its sanitation facilities by 49% since 2007 and has radically decreased its diabetes rate so that it is now the lowest in the region. Regarding Education, most variables have seen an increase. Cambodia now has the best gender equality in education enrolment, as well as inequality in education in the region. However, despite these improvements, Cambodia still lags behind its regional peers in most sub-indices and substantial challenges remain before it earns the status of a middle income country.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.