Cambodia Investment Review
Phnom Penh, has been ranked 687th in the recently released Oxford Economics Global Cities Index. This ranking places Phnom Penh among the top 1,000 cities globally, highlighting its economic significance despite various challenges.
The Oxford Economics Global Cities Index provides a comprehensive assessment of the world’s largest 1,000 cities, evaluating them across five categories: Economics, Human Capital, Quality of Life, Environment, and Governance. These categories are composed of multiple indicators, offering a holistic view of each city’s strengths and weaknesses.
Mark Britton, Director of City Services at Oxford Economics, emphasized the critical role cities play in driving global growth. “Cities are the engines for national economic growth, centers for education and innovation, and seats of political power. Understanding their unique characteristics is crucial for making informed strategic decisions,” Britton noted.
The Index’s five metrics for Phnom Penh are as follows:
- Economics: 671
- Human Capital: 394
- Quality of Life: 786
- Environment: 688
- Governance: 847
In comparison to its regional neighbors, Phnom Penh’s ranking reflects both its potential and areas needing improvement. Here’s how other cities in the region fared:
- Bangkok: 192
- Chiang Mai: 475
- Ho Chi Minh City: 314
- Hanoi: 304
- Manila: 256
- Vientiane: 589
- Yangon: 680
Phnom Penh Is Cambodia’s Political Capital Leading Business Hub
Phnom Penh, home to approximately 2.3 million people, is not just Cambodia’s political capital but also its leading business hub. The city is significantly ahead of other regions in terms of revenue generation. This economic dominance has spurred a migration trend from other regions, stretching the city’s boundaries and infrastructure.
According to the Economic Census 2022, Phnom Penh hosts 149,888 business establishments, accounting for 20% of all establishments in Cambodia. This makes it the largest share across the country. Kandal follows with 57,125 establishments (7.6%), Siem Reap with 50,714 (6.7%), Battambang with 49,748 (6.6%), and Takeo with 45,364 (6%). Preah Sihanouk, in contrast, has only 16,642 business establishments.
The Economic Census highlights Phnom Penh’s critical role in Cambodia’s economy. The city’s ability to attract businesses and investments underscores its economic vitality, even as it faces challenges related to infrastructure and governance.
Britton also pointed out the broader trends impacting city rankings globally. “An uneven economic outlook across regions, lingering inflationary concerns, and debt sustainability issues continue to challenge many cities. Additionally, global migration trends and the phenomenon of ‘deglobalisation’ could affect Human Capital scores,” he explained.
Phnom Penh’s Critical Role In Cambodia’s Economic Landscape
Cities investing significantly in healthcare infrastructure might see improvements in their Quality of Life scores, while those struggling with housing crises could face declines. Climate change remains a significant factor, especially for cities vulnerable to natural disasters, potentially impacting their Environment scores. Political stability and governance issues continue to influence rankings as well.
The Global Cities Index serves as a valuable tool for businesses, academics, and policymakers to make informed decisions. By offering a detailed comparison across multiple dimensions, the index helps identify opportunities and challenges that cities like Phnom Penh must navigate to enhance their global standing.
Phnom Penh’s position in the Global Cities Index highlights its critical role in Cambodia’s economic landscape and underscores the need for strategic investments to address its challenges and leverage its strengths.
