Small and medium enterprises (SMEs) are a key factor in Cambodia's development and could create more than 200,000 jobs a year, senior officials say. But to succeed they need a lower-cost environment, better infrastructure, better-trained labor, less bureaucratic red tape and less corruption.
Private enterprise plays a leading role in developing resources and new techniques that will help the country to achieve its development goals and reduce poverty, said Sok An, deputy prime minister and minister in charge of the office of the Council of Ministers, during the launch of the SME Development Framework last month.
"Small and medium enterprise plays a very important role to achieve economic growth and create more than 200,000 jobs a year," he said.
Suy Sem, Minister of Industry, Mines and Energy, said that "since SMEs make up approximately 99 percent of all enterprises in Cambodia and almost half of all employment, it is clear that this sector is a key factor in the development of Cambodia and has a major impact on the economic growth of the country."
Sem said Cambodia is facing tough competition from neighboring countries, which have lower-cost business environments as a result of better infrastructure, better trained labor forces and lower costs because of less red tape.
He said major obstacles for development include an inadequate legal and regulatory framework in which many of the necessary institutions, laws and regulations needed for an efficient private sector are missing or still being developed, limited access to finance, and a lack of private-sector business development services or public services.
Sok An said the government continues to push for SME development through upgrading the atmosphere for investment and helping entrepreneurs gain the ability to compete locally and internationally.
"Production, whether in agriculture, industry or other fields, cannot escape competition," Sok An said. "Especially when we want to enlarge [business by exporting to other places], we have to meet the competition by enhancing [products] both in local and external markets.
"For example, [if] we want to export chicken meat to one country's market, we have to guarantee our chicken has the same quality as that of others who export to that country."
Cambodia has 27,000 companies throughout the country - only 52 percent of them registered.
Sok An said the government had approved reforming administrative procedures, and the anti-corruption law would be approved soon, providing a legal foundation for anti-corruption measures. He said upgrading the atmosphere for investment enhanced good governance, particularly in public services.