EuroCham is the European Chamber of Commerce in Cambodia; it is the largest association of western businesses in the Kingdom and represents an ever increasing number of companies each year.
EuroCham is mandated to be the chief representative of European entrepreneurs and businesses operating in the Kingdom, they work in close cooperation with the government to provide trade facilitation.Established in 2011, EuroCham has gone from strength to strength.
Blaise Kilian is the Executive Director of EuroCham, he gave The Post his take on the current state of the Cambodian economy, as well as some of the issues for western companies when it comes to investing or building a business in the Kingdom.
The year 2018, held growth and an increase in foreign and local investment across the board in Cambodia, Kilian explains how EuroCham fared in 2018.
“For EuroCham it was very active, as usual … for European companies here, Cambodia remains a very booming and dynamic country. People who have invested here, I think that they have already benefited from this growth. It was a good year because usually election years are difficult to do business … the prospects remain very good because this growth is continuing, this country is very young and dynamic. Therefore it is a good place to do business providing you do your homework”.
Local investment, foreign owned locally established Small and Medium Sized Enterprises (SMEs), as well as multinationals, help to decorate the economic landscape of the Kingdom. What barriers there are, such as worries about regulation, are being actively combated and increasingly regulated at a governmental level.
“There are a lot of efforts by the government to expand compliance … there is huge push for that,” said Kilian.
For European companies EuroCham is an invaluable organisation. They work closely to advocate and advise the Cambodian government in an effort to expand what are already positive policy changes.
For EuroCham that means representing a variety of sectors explained Kilian, adding that a strong Cambodian economy has made growth possible for all of those represented “We are mostly in services, EuroCham, 95 per cent of our members are in services. Tourism and Hospitality is a traditional European area, but also engineering, architecture, real estate, insurance, distribution of goods, we are more into services than production investment, but overall, those who are connected to the construction and real estate business had a very good year … but I would say those who distribute goods had very good growth even though it is quite competitive”.
There is a strong push to entice companies who can provide the necessary ingredients to create continued economic growth in Cambodia. Even though the Kingdom’s economy has seen growth of seven per cent for twenty years, and a stable political climate, people from overseas perhaps do not understand what Cambodia is really like.
“Southeast Asia [SEA] is a fast growing region, in the West we know that when you reach two or three per cent [growth] it is outstanding, here we are on higher growth. If you look at SEA we have some of the fastest growing economies in the world. Cambodia is one of the fastest growing economies in the world, Gross Domestic Product has tripled in 20 years. For the case of Cambodia it is very young, very dynamic, 50 per cent of the population is under 25 years old, when you are moving and young, it offers a lot of opportunities. To be at the center of a dynamic region … it can be an opportunity if you are well connected [in terms of logistics and infrastructure]”.
Many businesses from the SEA region have already seen the opportunity to invest in Cambodia. But for European and western countries, sometimes an outdated view of the Kingdom pervades. Enticing these players into the market can be a bit harder, explained Kilian, ”I think it is not always easy because Cambodia suffers from a perception gap … in the West people still perceive Cambodia as it was in the 90s. One of the things we do at EuroCham is to try to fill this perception gap, to bring a better knowledge of Cambodia to European companies”.
With trade wars and nationalist policy peppering the world’s political governance, Cambodia can be an oasis for these investors if they look past their stereotypical misconceptions.
“You have this cliché which sticks to Cambodia’s image, it is about war and the Khmer Rouge, and yes sure, you did have the war, but Cambodia today is so much more than that. You have all these opportunities, all these booming sectors, all this growth and you know, all this new population, this willingness to learn and to start things, to consume as well, so people are not aware of that in the West,” said Kilian.
It is important to remember that while SEA countries share similarities; these are outweighed by cultural and social differences.
What works across the border might not work in the Kingdom in terms of business strategy. Remember Kilian’s words of wisdom before embarking on a new business endeavour, “do your homework.”