Cambodian SMEs Grapple with High Costs, Urgent Governance Changes Needed

Dr. Ky Sereyvath, an economist at the Royal Academy of Cambodia, pinpointed the formidable challenge besieging Cambodian Small and Medium En...

Dr. Ky Sereyvath, an economist at the Royal Academy of Cambodia, pinpointed the formidable challenge besieging Cambodian Small and Medium Enterprises (SMEs) during a recent forum. He highlighted the stark reality that high operational costs severely hinder these enterprises from effectively competing in the market, especially against their neighboring counterparts.

In his address at the "Economic Situation and Real Estate 2024" forum, organized by the Club of Cambodian Journalists, Dr. Sereyvath emphasized that the crux of the problem lies in the exorbitant expenses incurred by SMEs. Despite electricity costs not being a significant contributor, the overall cost structure remains prohibitively high compared to regional competitors.

Moreover, Dr. Sereyvath underscored the reliance on imported raw materials and the necessity to glean production techniques from foreign experts. This reliance exacerbates the struggle for local enterprises to keep pace with international standards. Additionally, Cambodian manufacturers lack familiarity with various chemicals' applications and their potential impacts, relying heavily on neighboring expertise.

To address these challenges, Dr. Sereyvath emphasized the pivotal role of the Ministry of Industry, Science, Technology, and Innovation. He stressed the urgent need for technical training programs tailored to enhance the production capabilities of Cambodian businesses. Such initiatives are deemed essential for fostering competitiveness and sustainability within the SME sector.

Furthermore, Dr. Sereyvath advocated for swift governance reforms to alleviate the burdensome cost structure faced by Cambodian SMEs. He called upon the Royal Government to expedite changes in governance systems to provide the necessary support for these enterprises. Such reforms are imperative to bolstering the resilience and growth prospects of the SME ecosystem in Cambodia.

In summary, Dr. Ky Sereyvath's insights shed light on the formidable challenges confronting Cambodian SMEs. High operational costs, import reliance, and technological disparities pose significant hurdles to their competitiveness. Urgent interventions, including targeted technical training and governance reforms, are essential to nurture a conducive environment for SME growth and innovation in Cambodia.