Wednesday, September 17, 2008

Easier to do business in Cambodia, says World Bank

Monday, September 15, 2008

According to the World Bank's ‘Doing Business' 2009 report, Cambodia was one of the top reformers in the areas of access to credit and opening new enterprises.

Cambodia has moved up 15 places in Doing Business 2009, a recent report published by The International Finance Corporation and the World Bank that compares the ease of doing business around the world.

Cambodia's significantly higher standing is the result of reforms that make it easier for businesses to get credit and to close a business. While much progress remains to be done in several areas, the report names Cambodia as the world's top reformer in easing access to credit.

Doing Business 2009, which compares 181 economies, uses 10 indicators of business regulation, from starting a business to dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business.

Cambodia was ranked 135 out of 181 countries surveyed in the report.

Stephane Guimbert, Senior Country Economist for World Bank in Cambodia, said, "There is much more work to be done, but these are very encouraging results, especially when you consider that many other countries are also making reforms."

Kang Chandarot, Director of the Cambodian Institute for Development Study, told The Phnom Penh Post that the business climate in Cambodia was much changed, and the report shows that Government officials are improving services and gaining more experience from their daily jobs.

Cambodia's strong showing this year is a result of two reforms. The first is passage of the Law on Secured Transactions in 2007 which makes it possible for a business to use its moveable and intangible assets as security for a loan.

Assets include equipment, vehicles, inventory, accounts receivable, and agricultural commodities. Before this law was written, bank lending was secured almost entirely with fixed collateral such as land and buildings.

A second reform which helped Cambodia rise in this year's Doing Business rankings was the passage of the Law on Bankruptcy in 2007.

Mr Chandarot did add that transparency remains a problem in Cambodia, especially in the area of awarding contracts.

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