Transcript Slide 1

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THE
ASEAN
COMPITITION CONFERENCE
Bali, Indonesia
15-17 November 2011
Presented by
Mr. Sok Somontha
Cambodia Chamber of Commerce
Key indicators
Small and Medium Enterprise
(SME)
Country name: Kingdom of Cambodia
Location: Southeastern Asia, bordering the Gulf
of Thailand, between Thailand, Vietnam and Laos
Area:
181,035 sq km.
Population: 14,144,000
Population growth Rates: 2.8 % (2010)
GDP growth rate : 9.1%
(2010)
GDP per capita : 510 USD (2010)
55% are under 20 years old
Only 15% live in urban centers 73 inhabitants/km2
200,000 young people reach employment age each
year, mainly in rural areas.
Exchange Rate : US$1 = Riels 4 ,070
Capital: Phnom Penh
Government type:
-Multiparty democracy under a constitutional
-Monarchy established in September 1993.
Administrative divisions: 20 provinces and 4 municipalities.
GDP Structure 2011
29.00%
41.00%
30.00%
Agri., Forestry, Fishery
Services
Industry & Construction
A. Competition and SME in
Cambodia

We note that the world has a strong interesting on Small
and Medium Enterprise (SME). Especially, the Royal
Government of Cambodia Recognizes small enterprise
development as a key strategy for poverty reduction and
economic growth. Small enterprise create jobs for large
numbers of women and men, they support the national
economy and they meet a broad range of consumer
demands. The Royal Government supports Small and
Medium Enterprise and drafted a decree to encourage
small entrepreneurs to establish associations.
A. Competition and SME in
Cambodia (Cont.)

Small business associations can potentially contribute a lot
to the development of the small enterprise sector. A small
business association is a voluntary alliance between small
enterprises. It acts on behalf of its member businesses,
Protecting their interests and offering much-needed
business development services. Business Associations can
help their members to increase their competitiveness and
to grasp opportunities in the market place. Small business
associations are an indispensable means for developing a
market economy.
B. Status of SME
1. Government Policies and Legal Framework
In July 2004, at the first cabinet meeting of the new
Government’s third term in office, the ‘new rectangular’
Strategy for growth, employment, equity and efficiency
was announced:
1- Strengthening the private sector and
attracting investment;
2- Creating jobs and improved working conditions;
3- Promoting SMEs; and
4- Ensuring social safety nets
B. Status of SME (cont.)
Government Policies and Legal Framework
The component of promoting SMEs is further delineated
into thirteen ‘policies’. These are as follows:
1 - Encourage the development of SMEs, especially
through the provision of medium and long-term finance.
2 - Suppress smuggling.
3 - Reduce registration procedures and start-up
processes for companies.
4 - Facilitate import-export activities by simplifying
procedures such as licensing and other letters of
permission.
B. Status of SME (cont.)
Government Policies and Legal Framework
5 - Support for newly established industries for an
appropriate period.
6 - Promote linkages between SMEs & large enterprises.
7 - Establish a national center for productivity to assist
SMEs enhanced their productivity and reduce
production costs.
8 - Establish a national standards institution to help
ensure the quality of domestic products to meet
regional and international standards.
9 - Establish national laboratories for physics, chemistry,
micro-biology, mechanics and test for quality and
criteria of products.
B. Status of SME (cont.)
Government Policies and Legal Framework
10 - Strengthen mechanism for the protection of industrial
intellectual property rights, to prevent illegal copying,
recreation and illegal use of new techniques and
technology.
11 - Promote vocational/skills training, both domestic and
overseas.
12 - Expand and accelerate the “one village, one product”
program.
13 - Strengthen the legal framework by creating laws on
concerns such as : factories, industrial zones, patents
and inventions, measurements and industrial safety.
C. Definition for SMEs.
STATISTICAL
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Micro
Small
Medium
Large
Less than
Between
Between
over
10 employees
11-50 employees
51-100 employees
100 employees
FINANCIAL
Determined by Assets, excluding land
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Micro
Small
Medium
Large
Less than
Between
Between
Over
US$
US$
US$
US$
50,000
50-250,000
250-500,000
500,000
For statistical purposes and policy development and implementation, the
definition is based on equivalent full-time employees. For other purposes,
where the number of employees is not suitable, an alternative financial
definition should be used, based on total Assets.
D. Current State of SME
Number Small Industrial Establishments by Sector Year 2011
Number 2009
Number 2010
Manufacture of food, beverages and
tobacco
19,147
25,455
Textile and wearing apparel
396
1,689
Wood and wood Products
814
-
Paper and paper products
23
33
Chemicals , rubber and plastic products
67
159
Non-metallic mineral products
777
797
Manufacture basic metals
-
-
Fabricated metal products
1,647
2,380
Other manufacturing industries
1,356
636
Total
24,227
31,149
Sectors
Growth ( compare to year 2008 )
28.6 %
E. Problems Faced by SME
High Regulatory Compliance Costs
 Lack of Clear, Market-Oriented Framework
for SME Development
 Limited Access to Finance and Smuggling.
 Poor market access infrastructure & information.
 Policy supporting unclear
 Low status production
 Low status quality
 Lack of capacity-building programs and inadequate
provision of vocational training
 Lack of investment capital

F. SME Development Programs
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The Government recognizes that SMEs play a
significant role in promoting economic development
and creating sustainable employment and incomes.
Consequently Government developed a SME
Development Framework to improve and coordinate
the Government’s efforts in promoting SME activity
in a market economy.
The SME Development Framework is intended to
serve the Government as a road map for the
development of the SME sector.
F. SME Development Programs (cont.)

In order to implement the Government’s ‘Rectangular
Strategy’ and achieve a conducive business environment,
the SME Development Framework focuses on three key
areas.
a. Regulatory and legal framework
b. Access to finance
c. SME support activities
F. SME Development Programs (cont.)
a. Regulatory and legal framework
Reduce the barriers and build the necessary system
for effective registration.
 Reduce regulatory compliance costs by enhancing
governance and responsibilities of the relevant state
agencies.
 Develop basic legal infrastructure needed for
businesses and strengthen the rule of law.
 Improve trade facilitation to make it low cost, efficient and
transparent.

F. SME Development Programs (cont.)
b. Access to finance
Establish secure titling to improve collateral.
base, and effective mechanism of enforcement of
the land law.
 Create an enabling framework for banks to
provide finance leasing.
 Establishment a Credit Information Sharing System.
 Simplified Accounting and Taxation Systems for SMEs.

F. SME Development Programs (cont.)
C. SME support activities
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Business Development Services
Access to Markets
Technology and Human Resources Upgrading
Linkages
Under the Private Sector Steering Committee, along with
2 other Sub Sub-Committees, creation of the SME Sub
Sub-Committee chaired by the Minister of Industry, Mine
and Energy in August 2004.
G. Key Challenges
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Solving the Power Crisis; Reduce Transport Bottlenecks
Increased private sector investment and improve Access to
Finance.
Skills development and improving vocational training
Creating a dynamic SME sector
Export Diversification – New Sectors and Markets.
Opportunities from Greater Regional Integration.
Conclusion
To make General provisions and regulations.
 To get finance possibility for short and long term.
 Supporting services for SME.
 Policy coordinating.
 The SME sector appears likely to remain very important
in most developed and developing countries, judging in
part by recent trends in both these groups of countries.
 Competition policy is in need and can make things
change positively (for all businesses).
 Strong political will.

Thank You
for your
kind attention !!!