Hinn Chamroeun from Kampong Chhnang, with the study group at an orange plantation near Malang city, East Java.
group of Cambodian small-to-medium-sized-enterprise (SME) owners has returned from
a study tour of Indonesia, with a greater appreciation of the benefits of forming
business associations and cluster groups.
The tour for 10 people in May was sponsored by the Asia Foundation. The participants
represented businesses such as water distribution, construction, agriculture and
salt production, in Kampong Chhnang, Kampong Cham, Kampot and Phnom Penh.
Nancy Hopkins, the Asia Foundation representative in Cambodia, said there were 60
small business associations (called forda) serving 1,500 member businesses across
Hopkins said among the many differences between Cambodia and Indonesia were the size
of the population, the level of economic development, the type of natural resources
available, the political situation, and the level of decentralization. Indonesia
was farther along with its decentralization process than Cambodia.
However, small businesses in both countries faced many of the same constraints, including
problems with access to credit, lack of infrastructure, heavy and complicated administrative
procedures and informal payments.
Hopkins said the trip to Indonesia provided an opportunity for Cambodian colleagues
from public and private sectors to learn from the Indonesian experience. It demonstrated
the benefits of forming small business associations that can engage with the public
sector on policy issues affecting SMEs and offered a chance to Cambodian participants
to be exposed to the concept of "one stop shops" for registration and licensing,
and to learn new ways to develop a more business-friendly environment at the local
"Increasing understanding of the important contributions that SMEs make to the
local economy will help Cambodia along its path toward economic liberalization,"
The Asia Foundation is holding workshops in Kampong Chhnang, Kampong Cham and Kampot
on association building with technical support from one of the foundation's colleagues
Suon Dy, head of the Department of Industry Mines and Energy (DIME) in Kampong Cham,
said Cambodian SMEs would ultimately produce more goods for export by collaboration
with related organizations.
Dy, who was on the tour, said: "In the future, we will be able to produce additional
product for export. Today we produce only for domestic demand."
He said in his province today there were 329 SMEs and of these cashew nut, wine,
sugar, rice milling and wood-potato enterprises were the most important enterprises.
However they serviced only the domestic market because the businesses could not borrow
money at low interest, were short of human resources, their technology was often
obsolete and they lacked information and confidence to develop.
Dy said another difficulty was that Cambodian producers had to register their businesses
at two different departments: DIME and the Department of Commerce.
"It's very different from Indonesia. They have a one-stop service center which
handles all kinds of business and licensing transactions.
Dy said the Cambodian government had started experimenting with this concept in Battambang
and Siem Reap provinces, and eventually this would spread to other areas.